From WisPolitics.com/WisBusiness.com …
— The head of the Wisconsin Hospital Association says hospitals’ recent improvement in financial performance “must be viewed with caution” as broader trends threaten the industry.
WHA President and CEO Kyle O’Brien wrote about the path ahead for hospitals and health systems in the Wisconsin Bankers Association’s annual Wisconsin Economic Report, released earlier today. The report includes perspectives from eight business sector leaders in the state.
In the section focused on the health care industry, O’Brien noted its recent “modest” financial improvement with a 2.2% average operating margin for health systems in 2024. That’s the first time the average margin has been positive in the last three years, he said.
But that good news for the sector comes as uncompensated care — including charity care and bad debt — rose nearly 30% from 2023 and 2024. At the same time, labor and supply costs are outstripping rate increases for Medicare and commercial insurance, even as the federal program is making up an increasing share of the payer mix.
Hospitals in the state have seen the number of Medicare patients rise by 6% since 2016, according to O’Brien, matched with a similar decline in the share of patients with commercial insurance. He says each percentage point shift in that direction results in a $200 million revenue hit to Wisconsin hospitals, not including physician and provider services.
“Since 2016, this has resulted in a staggering $1.2 billion reduction in revenue for Wisconsin hospitals, all because patients are retiring onto Medicare and coming off commercial insurance,” he wrote.
Plus, he said insurance companies are “making it more difficult” for providers to get reimbursed while patients are waiting longer for care.
But at the same time, O’Brien notes the last state budget included a Medicaid rate increase through an enhanced state-directed payment program.
“While the program awaits federal approval, this could provide substantial resources targeted to hospitals serving Medicaid patients and offset at least some of their losses,” he wrote.
See the report and find others here.
— Health care topped the list of state policy priorities for Wisconsin employers in the latest Wisconsin Manufacturers & Commerce survey.
The group yesterday released the results of its Wisconsin Employer Survey on the economy and workforce.
It found 43% of respondents said the one thing state government could do to help them is make health care more affordable. That was followed by reducing or reforming regulations with 24% and reducing taxes with 16%.
When asked about their top business concerns, 20% said health care costs, second only to the national economy at 32%. Another 16% said labor availability and 11% said excessive regulation.
“Although we see hints of optimism like increased hiring and a relatively good outlook for the U.S. economy, businesses are still frustrated with high healthcare costs and finding capable employees,” WMC President and CEO Kurt Bauer said in the report.
See more results here and see the release below.
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