Looking back on 2023, we can identify some key hospital cost accounting trends worth considering as you move forward in 2024. Each year provides an opportunity to learn, grow, and help you improve cost accounting and revenue cycle management to make the best financial decisions for your healthcare organization.
Here’s a roundup of the top 10 hospital cost accounting trends and news items in 2023. We also share how CostFlex can help you leverage these trends for successful outcomes this year and beyond:
#1: The October National Health report of 1300 hospitals has identified an increase in bad debt and charity care.
This is being attributed to some patients being disenrolled from Medicaid. Fewer than 35% are reported to be on a hospital payment plan.
In today’s economy, hospitals are experiencing razor-thin margins. CostFlex clients can utilize PowerBi and Visualization tools to analyze payment trends in their data, providing analytics so that C-level suite executives can take action.
#2: According to an NBC News report, nurses are burned out on overtime, even after the pandemic.
The report highlights the staffing shortage, which has led to an increase in overtime shifts. Some states, including Connecticut and New York, have considered overtime protections for nurses.
At CostFlex, we’ve found that labor accounts for 60 cents of every dollar of costs, on average. If you want to learn more about where your labor costs are by service line, we’re here to help.
#3: As nurse salaries increase, the consensus is that the higher labor costs will eventually be passed on to the patient or the insurer, but hospitals may also bear the burden.
Although the American Nurses Association stated there isn’t a direct correlation, about half of the hospital expenses for inpatient care not involving surgery are directly linked to nursing. Therefore, if the cost of nursing increases, hospitals will have to bear a significant burden of treating patients.
In such a scenario, hospitals will face a difficult situation. They will not only experience a reduction in reimbursement but also must cope with additional patient care challenges. CostFlex is ready to help you with these challenges by providing cost accounting and decision support software to maximize performance and profitability, even in the face of rising labor costs.
#4: Best Buy acquired a remote patient monitoring company in 2021 and is now partnering with 5 hospitals.
Best Buy subsidiary Current Health will use remote patient monitoring to provide care at home for patients with chronic conditions. OSF Healthcare stated that patient monitoring has helped reduce emergency room visits and costs.
To compare your ER costs to those of other CostFlex clients, read more about the CostFlex Cost-Based Hospital Benchmarking Tool.
#5: In its annual outlook report, Fitch Ratings called 2024 a ‘make-or-break year’ for hospitals.
2022 was one of the worst financial years, with 2023 bringing a positive turnaround for some. For hospitals to succeed, they must recruit and retain staff and not rely on contract labor.
On average, we found that labor accounts for around 60 cents of every dollar, making it the highest cost. Learn more about how CostFlex can help you analyze your hospital’s costs to take your profitability to the next level in 2024.
#6: Since September 27, an additional 13 hospitals have dropped Medicare Advantage.
The Nebraska Hospital Association has cited post-acute placement delays and administrative and financial burdens. Scripps’ president said their health system is facing a loss of $75 million this year due to the MA contracts.
What does this mean for your healthcare organization? You can determine if the Medicare Advantage plan covers your contribution margin by combining your costs with your projected allowed amount. Learn more about how to do this with our healthcare cost accounting software.
#7: Medicare Advantage denials have risen to 55.7% of revenue reductions compared to commercial payers denying 20.2%.
The American Hospital Association is asking the CMS to review the coverage rules, citing financial strain and the fact that hospitals must ensure uninterrupted patient care.
Are you being reimbursed enough to cover your costs? CostFlex can help you know for sure.
#8: The American Medical Association is petitioning Congressional Leaders to cancel a 3.37% cut to Medicare. They are requesting that they adopt a bill introduced in the House called the Preserving Seniors’ Access to Physicians Act of 2023, which would cancel the rate cut.
After adjusting for inflation, one family physician group received 26% less for the same services in 2001. Benchmarking your physicians on cost, reimbursement, and charge utilization is one of the benefits CostFlex software clients routinely enjoy.
#9: Cal Matters reported on December 28 that starting January 1, 2024, California is increasing Medicaid coverage to all eligible undocumented individuals, ages 26 to 49; undocumented immigrants may remain ineligible if they make too much money.
California’s Medicaid program, Medi-Cal, first began providing coverage to undocumented children in 2015. At what point can a hospital sustain itself with a specific payer mix? CostFlex can help you calculate your costs with a Medicaid reimbursement structure.
#10: The American Hospital Association wants the Centers for Medicare and Medicaid to enforce violations of the Medicare Advantage coverage rules.
This request was due to denial letters from certain MAOs that are believed to be in violation of the coverage. Additionally, the hospital association aims to address misleading marketing schemes related to Medicare Advantage plans.
Are your costs being covered by your payer contracts? CostFlex is here to deliver the answers and support you need. Let us know if we can help your organization identify and run reports. This way, you have the clearest understanding possible of what your payer contracts cover costs.
Let’s Maximize Your Hospital’s Profit Potential in 2024 and Beyond
No matter what types of hospital cost accounting trends come your way this year, CostFlex has the tools, resources, and expertise to help you. You can be at the forefront of strategic financial management with our support. To learn more about our healthcare cost accounting and payer contract analysis solutions, contact the CostFlex team. You can request a product demonstration.