Hospital Spending Increases the Least of All Major Categories According to Altarum Center for Value in Health Care, national health spending increased 4.6% during 2018 to $3.73 trillion. Hospital spending was $1.217 trillion, a 4.4% increase from 2017, which was the smallest increase among health spending categories. Hospital spending had the largest share of all spending, or 32%; followed by physician and clinical services, 20%; other health spending, 15%; remaining personal health care, 11%; prescription drugs, 10%; nursing home care, 5%; and home health care, 3%. Because the American Hospital Association changed how it classified hospitals for its 2017 census, there were 6,210 total hospitals in the US during 2017, which included 931,203 staffed beds and 36.5 million total admissions.

Physicians Generate Millions in Hospital Revenues According to the latest survey from Merritt Hawkins, a Dallas- based physician recruiting firm, physicians accounted for an average of $2.38 million in net revenues for their hospitals, a 52% increase from the firm’s last survey of 2016. An increase in outpatient visits, higher costs per hospital stay and more ill patients because of the aging population were drivers of the revenue increase, with cardiovascular surgeons generating the largest average, or $3.7 million. According to Medscape’s Hospitalist Compensation Report 2018, however, anesthesiologists were paid the most of all specialties measured, or $351,000. 53% of hospitalists thought they should earn 11% to 25% more.

Factors Forcing Improvements in Hospital Efficiencies With hospital spending increasing the least at hospitals, they are facing other financial challenges, including the recent merger of CVS and Aetna, as the new company implements new programs to reduce ER visits and hospital readmissions. As of January 1, 2019, hospitals are now required to post their prices online, which is known as “chargemasters”; however, these lists include thousands of often confusing entries and very seldom match what appears on final bills. Recently, many horror stories of what people are being charged for ER visits have appeared in the media. The facility fee, or the cost of ER facilities and personnel on standby to serve patients, is one of the major drivers of larger-than-expected ER bills.

Medicaid Changes Could Be Costly for Hospitals The implementation of the federal government mandate that would require “able-bodied” Medicare patients to work could cost hospitals $2.5 billion to $3.7 billion in uncompensated care costs during 2019. By having to bear the burden of ER and/or regular hospital services for those with the lowest income, hospitals may have to cut overall services and staff, which not only affects insured patients, but also negatively affects the wider community. Arkansas was the first state to impose the work requirement during June 2018, and expanded it during January 2019. After the first four months, 8,500 people lost their Medicaid coverage, which could increase to 50,000, eventually.

More Rural Hospitals in Grave Danger of Closing Rural America has been experiencing significant changes, such as a loss of agricultural and manufacturing jobs and an older population, which are some of the factors putting rural hospitals in 34 states at high financial risk – and many are Southern states. Since 2010, 95 rural hospitals in 26 states have closed, and when this occurs, per capita income in the area decreases 4% and the unemployment rate increases 1.6%. According to Navigant’s Rural Hospital Sustainability Report (February 2019), 64% or 277 rural hospitals at high financial risks in 31 states are considered essential.

Urgent Care Centers Serve Important Populations According to the Urgent Care Association, there were 8,774 urgent care centers (UCCs) in the US as of November 2018, an 8% increase from 2017. Millennials are primarily responsible for the increase, as 45% don’t have a primary- care physician. The 89 million patients who visited an UCC during 2018 represented 29% of all primary care visits and almost 15% of all outpatient physician visits. The association also states in its 2018 Benchmarking Report that 98% of UCC patients receive the appropriate care while just 2% are sent to ERs. In addition, 85% of patients waited less than 60 minutes, 94% less than 30 minutes and 70% less than 20 minutes.

Advertising Strategies Hospitals can generate more trust and transparency by announcing/highlighting the posting of their prices online, providing a brief explanation of how the prices are displayed and directing consumers to their Websites or social media for an in-depth explanation. With so many rural hospitals at risk of closing, those with a solid financial footing can emphasize in their marketing messages that they will continue to serve the community. Any hospital that is an IBM Watson™ 100 Top Hospitals can feature this distinction in their marketing and advertising and share the specific performance criteria on page 4 of the Profiler to distinguish themselves from their competition.

New Media Strategies Now that hospitals are required to post their prices online, it provides them with an opportunity to create a series of short videos for their Websites and social media pages to provide a guide for reading and understanding the price entries. Since many Millennials consider urgent care centers (UCCs) as their primary source of health services, UCCs will want to use Instagram and Snapchat for most of their social media posts with short videos about their services, wait times, etc. Many hospitals and UCCs actively participate in their communities, with educational and outreach programs, which are excellent sources of content and stories for social media.