Healthcare providers continue to face cost and price pressures - Data Trends - Brief Article

Healthcare Financial Management, Dec, 2001

The data at the right indicate that outpatient charges as a percentage of total charges for U.S. healthcare providers held steady in the last two quarters of 2000 and the first two quarters of 2001 (see Exhibit 1). Notably this indicator continues to fall below the levels attained before implementation of the Medicare outpatient prospective payment system. In addition, the supply costs per adjusted discharge have risen steadily overall in the past nine quarters, although in recent quarters, this statistic has varied significantly (see Exhibit 2). The data show that supply costs have held steady so far in 2001.

The data also show that the capital expense ratio continued to decline through the second quarter of 2001 (see Exhibit 3). This finding may indicate that investment in plant and equipment has continued to decline, though additional research is necessary to corroborate this interpretation.

Finally, the upward trend in bad-debt expense for U.S. healthcare providers continued in 2000, accounting for seasonal variation (see Exhibit 4). For 2001, however, it appears that these organizations have been able to reduce bad-debt expense back to 1999 levels.

Data for this analysis were collected from hospitals that submit quarterly financial and operational data to Solucient.

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