The End of Hospital Cost Shifting?

Medicare is cutting reimbursement to hospitals.  Austin Frakt (HSR 2013) gives some highlights findings from a CMS report: [The ACA] will permanently reduce the Medicare payments hospitals would otherwise receive. Its ‘productivity adjustment’ will scale payments downward by the average rate at which private nonfarm businesses’ productivity increases. That rate has been estimated to be…

How Health Reform will affect Hospital’s Business Strategy

For many years, fee for service payment was the status quo. FFS model encourages hospitals to adopt the following strategies to maximize market share and profits: Centered on short-term acute care Focused on specialist alignment Driven by a volume-based service-line strategy Using expensive medical equipment purchases to encourage physician referrals Attracting patients with new construction…

Calculating Multifactor Productivity

What is multifactor productivity? Multifactor productivity (MFP) is a measure of real output per combined unit of labor and capital, reflecting the contributions of all factors of production.  A change in multifactor productivity reflects the change in output that cannot be accounted for by the change in combined inputs. As a result, multifactor productivity measures…