Becker's Hospital Review

28 CFO / FINANCE Why Growing Worker Productivity Could Be Bad for Hospitals' Medicare Rates By Kelly Gooch H ospitals could face increased financial pressure from adjusted Medicare reimbursement rates under the ACA, reports The Wall Street Journal. Here are five things to know. 1. The ACA helped roughly 20 million Americans gain insurance coverage. This means hospitals saw more insured patients who could cover medical expenses. 2. But the ACA also includes adjusted Medicare reimbursement rates. Medi- care reimbursement rates are adjusted based on productivity, "or what a typ- ical worker produces in a typical hour. That means that reimbursement pay- ments fall as productivity in the broader economy grows," the report states. 3. The Congressional Budget Office estimates these adjustments will re- duce annual reimbursement rate growth by an average of about 0.8 percent through 2025. 4. Due to these adjusted Medicare reimbursement rates, hospitals could end up losing a significant amount of revenue, WSJ notes. Various hospitals in re- cent years have already cited decreased Medicare reimbursement as a factor in their financial struggles. 5. Republicans have revived efforts to dismantle the ACA. In early September Republicans revealed their latest ACA repeal bill prior to the Sept. 30 budget reconciliation deadline. WSJ notes a new reimbursement formula could come into play if the ACA is repealed. n Healthcare Spending Growth Drops Below 4% for First Time Since 2014 By Morgan Haefner F or the first time since quarter one of 2014, healthcare spending growth fell below 4 percent in the second quarter of 2017, according to an anal- ysis out of the Altarum Institute. The Health Sector Trend Report from Altarum's Center for Sustainable Health Spending comprises data from the center's Health Sector Economic Indicators and the U.S. Census Bureau's Quarterly Services Survey. Here are four additional findings from the report. 1. The Altarum Center estimates healthcare spending growth will be 4.4 per- cent for the first half of 2017. This is compared to 4.6 percent growth for all of 2016. 2. Healthcare services spending fell to 3.5 percent in the second quarter of 2017, compared to slightly more than 5 percent in the same quarter of 2016. 3. Hospital spending growth grew at 1.3 percent in the second quarter of 2017. 4. Prescription drug spending grew at 5.2 percent in the second quarter of 2017. However, this does not include changes in rebates. n Long-Term Funding Uncertain for Teaching Health Centers in Underserved Areas: 5 Things to Know By Kelly Gooch L ong-term funding is uncertain for teaching health centers aimed at pro- viding primary care physicians in med- ically underserved areas, according to a Cali- fornia Healthline report. Here are five things to know. 1. Teaching health centers were created by the ACA and offer community-based prima- ry care training. 2. Currently, there are 57 funded THCs with 722 primary care residents nationwide, ac- cording to the American Association of Teaching Health Centers. e THCs are across 27 states and the District of Columbia. 3. Experts argue THCs have produced pos- itive results, as their residents generally stay in medically underserved areas, according to the report. 4. Short-term funding for THCs was secured when President Donald Trump recently signed a temporary extension to fund them through the end of 2017, reports California Healthline. 5. e federal government has not taken ac- tion regarding long-term funding. However, U.S. lawmakers are likely to take up a pro- posed funding measure in October accord- ing to the report. e proposal would extend funding for THCs three more years and up the annual funding cost per student by 65 percent compared to current funding, the report states. n

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