August 30, 2017 Comments Off on Weak Hospital Admissions Expected to Continue Through 2018 Views: 300 Healthcare News, National News

Weak Hospital Admissions Expected to Continue Through 2018

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After enjoying a surge of patient demand from the Affordable Care Act, hospital operators are now experiencing weak admissions—a situation that will likely persist for the next 12 to 18 months. Patients are postponing non-emergency and elective surgeries due to concerns about out-of-pocket costs and uncertainty about Obamacare.

Publicly-traded hospital operators, including HCA Healthcare Inc. and Tenet Healthcare Corp., reported unimpressive quarterly results and cut their forecasts for the year. HCA, the largest for-profit health system, is expected to grow at a compound annual rate (CAGR) of 4.8% this year and the next, down from 6.7% over the past three years.

Meanwhile, Tenet’s CAGR is expected to fall off a cliff, from 21% to 0.2%. The operator saw weakness in elective procedures, including orthopedics, according to Tenet’s President of Operations Eric Evans.

Healthcare analysts point to high-deductible health plans as a driver in hospital admissions. These plans, which offer lower monthly premiums in exchange for shifting the bulk of initial medical costs to patients, compel patients to eschew non-emergency surgeries. Participation in high-deductible plans in the five years through January 2016 rose about 76%, according to America’s Health Insurance Plans, a lobbying group.

Historically, the first quarter has been the most active for admissions, but some analysts are predicting the fourth quarter will end up being the strongest for hospital operators. “I think the seasonality is changing, somewhat, where the fourth quarter is really shaping up to be the biggest quarter because of all the people deferring things until their co-pays are deductible,” said J.P. Morgan analyst Gary Taylor.

Read More at Reuters

Connect With J.P. Morgan’s Taylor

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