from today’s WCRI conference
Inpatient hospital costs in MI increased by 13.3% from 02/03 – 04/05. Why?
My guess is this is at least in part due to cost shifting. Michigan’s employment situation has declined significantly over that period. The decline in the insured population in the state over that period has likely led to a rise in the volume of uncompensated care in the state. As hospitals’ costs increase, and revenue sources decrease, smart hospital operators look to maximize revenue from all sources. This can be reflected in changes to charge masters, increased utilization, and more usage of specific types of services for more patients (e.g. MRIs).
Another potential contributing factor, albeit one with a much smaller contribution, may be a decline in the number of lost time cases per hundred employees that has occurred in MI as well as the rest of the nation. This decline is resulting in fewer WC cases treating at facilities, thus reducing a revenue stream from a profitable payer.
