Hospital Operating Income Falls for Two-Thirds of Health Systems

by Glenn Krauss, BBA, RHIA, CCS, CCS-P, CPUR, FCS, PCS, CCDS, C-CDI, C-CDAM


Hospital systems continue to face significant economic operational challenges with strong headwinds for a number of reasons. Some key takeaway points:

1) Decreasing reimbursement from government payers while expenses continue to outpace revenue. Hospital expenses increased three percentage points faster than hospital revenue from 2015 to 2017.

2) Hospital revenue growth slowed during the period because demand went down for key hospital services, like surgery and inpatient admissions, Navigant explained. More services are being performed in the outpatient setting migrating away from more costly inpatient setting.

3) Continued reduction in Medicare updates from ACA and the sequester- as a result hospital losses in treating Medicare patients rose from $20.1 billion in 2010 to $48.8 billion in 2016, according to American Hospital Association analyses,”

Word to the wise for CDI with less inpatient admissions, we must capitalize upon the value proposition we bring to the table, focusing on the return we bring to the organization in light of the expenses in running a program. This requires partnering with case management, utilization review and our physician advisors to improve the communication of patient care beyond present models with focus upon gross patient revenue versus net patient revenue. Aside from reimbursement, we must not forget our duty to the patient given that quality of care directly correlates with quality of documentation and communication.With expenses continuing to increase trailing revenue increases and more services moving to the outpatient setting, the creation of a perfect storm where CDI must rethink its current model and develop a strategic initiative to drive CDI operational excellence and value should be a top priority. Business as usual is simply not an option, there is just no substitute for a CDI cultural change moving ahead, recognizing that operating in a silo is counterproductive and counter-intuitive approach to affecting positive improvement in documentation quality.

About the Author

Glenn Krauss is a longtime Revenue Cycle Professional with progressive hands one experience in all facets of the revenue cycle. He possesses a high energy level and passion for clinical documentation improvement initiatives that drive physician engagement in truly wanting to learn and acquire best practice standards of clinical documentation supporting communication of patient care.  He is the creator and founder of Core-CDI.com.