Year in Review: 7 Healthcare Trends in 2022 You Might Have Missed

As a healthcare provider, hospitals must worry about rising costs and increased expenses regarding supplies and labor. Adding to that inflation and supply chain issues, along with Medicare changes and other factors, hospitals face many challenges in ensuring they can provide the highest quality care to their patients while also making a profit.

As a leader in cost accounting software for hospitals and other healthcare providers, CostFlex offers a year in review of seven healthcare trends in 2022 that you might have missed. Read on and discover recent developments that may affect hospitals and how to respond to these challenges and come out on top.

1. Inflation’s Effect on Healthcare Costs

In 2022, the Consumer Price Index rose 8.6%, making it one of the fastest increases in more than 40 years. Additionally, 2022 saw a considerable disparity between revenue and cost inflation, with hospitals’ total costs rising nearly 10% higher than their revenue.

2. Rising Supply and Labor Costs

By March 2022, hospitals’ labor costs rose by more than 33% from pre-pandemic levels. Contract labor accounted for 11% of hospitals’ total labor expenses, an increase of 9% from 2019. Moreover, the median hourly wage for nurses rose an astounding 106% during the same period.

3. Supply Chain Issues

The pandemic caused alarming delays in many supply chains, including those for healthcare. However, as restrictions have been lifted, the chain has been slow to catch up. Experts don’t expect disruptions to lessen any time soon due to other issues, such as medication back-orders and challenges maintaining non-medical stock. Furthermore, inflation has greatly affected supply costs, and medication/product recalls and other public health concerns, such as monkeypox, have also added to the problems.

4. Price Transparency Regulations

The No Surprises Act enacted in January 2022 created many challenges for hospitals to provide accurate patient estimates. Along with the difficulties of simply determining the information accurately, hospitals also face challenges regarding the technological and personnel investments they must make to publish the information online and accept online payments. To comply, many hospitals had to turn to outside vendors, incurring costs they weren’t expecting to pay.

5. Medicare Changes

Changes to Medicare in 2022 and upcoming changes in 2023 will create considerable challenges for hospitals, particularly rural emergency hospitals (REH) and critical access hospitals (CAH). For one, Medicare will reduce payments to Medicare physicians by 4.5%, and impacts may vary from one area of specialty to the next. However, REH’s may receive 5% add-ons to their standard outpatient rate from Medicare for covered outpatient services. CAHs and non-emergency rural hospitals with fewer than 50 beds and no acute care inpatient services may convert to REH in 2023.

6. Rural Hospitals

In 2022, many rural hospitals had to close their doors. Issues such as staffing shortages, low reimbursement, regulatory barriers, and low patient volume were more than they could bear. In addition, the COVID-19 pandemic proved to be the proverbial nail in the coffin for some. Rural hospitals account for around 35% of all hospitals nationwide and provide much-needed medical services in isolated areas. However, extending programs such as Medicare-Dependent Hospital (MDH) and Low-Volume Adjustment (LVA) can help offset financial problems.

7. ED E/M Code Updates

Additionally, E/M visit codes and some documentation policies will change, including Telehealth and behavioral health coverages. The AMA has released its preview of 2023 CPT Documentation Guidelines for E/M that will affect approximately 85% of relevant value units (RVUs) for members.

CostFlex is Here to Help

As hospitals review these healthcare trends in 2022 and gain insight into the coming changes, they will likely have many questions about how they will impact the organization. Financial professionals are also concerned with how they will implement regulations and accurately assess their cost-to-profit ratio so they manage their resources effectively and provide top-quality care to their patients while remaining profitable.

CostFlex’s line of Cost Accounting and Payer Contract Analyzer products for hospitals can help calculate actual patient treatment costs so informed decisions can be made about the facility’s operations. Our system allows for easy entry and changes to charge codes and activities to stay on top of fluctuating expenses. Additionally, hospitals can accurately track rising labor and supply costs and customize the system to deliver even more pinpointed metrics.

With CostFlex’s system, hospitals can quickly pull and analyze large amounts of data to make important, timely decisions to thrive in today’s uncertain and demanding market.