By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    physical health
    5 Ways Playing Games Can Improve Neural and Physical Health
    September 9, 2022
    Reasons For Hair Loss and Its Treatment
    Reasons For Hair Loss and Its Treatment
    February 16, 2022
    healthcare organization
    5 Actionable Strategies For Healthcare Organizations
    August 15, 2022
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    4 Reasons Chris Cornell’s Death Raises Medical Ethics Questions
    December 19, 2018
    What If You Could Sell Your Vote?
    August 24, 2017
    The Sleepy American
    September 12, 2017
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Medicare Cuts: Hospitals Don’t Make It Up on Volume
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Medicare Cuts: Hospitals Don’t Make It Up on Volume
BusinessFinanceHealth ReformHospital AdministrationPolicy & LawPublic Health

Medicare Cuts: Hospitals Don’t Make It Up on Volume

DavidEWilliams
DavidEWilliams
Share
4 Min Read
Medicare costs and the ACA
SHARE

Medicare costs and the ACAThe Affordable Care Act purports to reduce the deficit, yet critics expect (or at least claim to expect) that it will actually be a budget buster. A Health Affairs article (When Medicare Cuts Hospital Prices, Seniors Use Less Inpatient Care) comes down on the side of those expecting big savings.

Medicare costs and the ACAThe Affordable Care Act purports to reduce the deficit, yet critics expect (or at least claim to expect) that it will actually be a budget buster. A Health Affairs article (When Medicare Cuts Hospital Prices, Seniors Use Less Inpatient Care) comes down on the side of those expecting big savings. The researchers, Chapin White of the Center for Studying Health System Change and Tracy Yee of Truven Health Analytics study the historical relationship between Medicare price trends and the volume of inpatient care provided.

The Affordable Care Act cuts Medicare price growth. But if hospitals respond by increasing the amount of care provided – by treating patients more intensely or hospitalizing more of them – the potential cost savings from price restraint may be lost. And if they raise prices in the commercial market the burden will simply shift from the public to the private sector.

Here’s what the authors found:

More Read

Rick Perry Needs To Make Up His Mind
The Outcomes That Matter to Patients
Big Data = Big Savings in Healthcare
Order Workflows
MGMA 2012 Annual Conference – Small Steps, Big Changes

Our analysis revealed an important relationship between Medicare prices and the volume of inpatient services. Although some analysts worry that price cuts will lead hospitals to “make it up on volume,” our results suggest the opposite:Medicare price cuts lead to a reduction in volume…

Medicare price cuts lead hospitals to reduce capacity and provide fewer services to the elderly. Hospitals do not appear to leave beds empty in response to Medicare price cuts. Instead, they appear to reduce their scale of operations by shutting down beds…

Hospital volume responses might not even reflect conscious decisions. Instead, they may occur gradually, through evolving clinical norms.

If historical patterns hold true, that means the Affordable Care Act will save more on hospital costs than projected. In addition, it turns out that hospitals generally are not able to get commercial payers to make up for lost Medicare revenues. Instead, lower Medicare prices are associated with lower commercial rates. That’s probably because private health plans use Medicare rates as the baseline for negotiation.

There are a couple things that are different this time around: the emphasis on measuring and paying for quality and the emergence of risk-based payment models such as Accountable Care Organizations. If anything, the price pressures from traditional fee-for-service may encourage a more rapid shift toward the new models as providers look for ways to avoid the unit price squeeze. That’s a good thing as long as ACOs realize at least some of their potential.

Like all good researchers, these authors conclude with a call for further research, so we should expect to read more on this front in the future!

(Medicare / shutterstock)

TAGGED:Medicare
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025
engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025

You Might also Like

Image
Medical Education

Failing Grade for Health IT in Medical School?

October 21, 2013

The 15 Most-Watched Medical-Device Stocks

August 10, 2011

The Secret to Healthcare Marketing ROI: Focus, Focus, Focus (Part 1)

January 29, 2014

Open Enrollment – Gangnam Style

May 6, 2013
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?