Moody's: Recession still driving down patient admissions

Hospital inpatient admission rates are down sharply this year at facilities across the country, raising some alarm with a prominent analyst at Moody's Investors Service.

"The numbers are eye-opening," said Moody's Associate Managing Director Lisa Goldstein, who presented on Monday at the Healthcare Financial Management Association annual conference in Orlando, Fla.

According to Goldstein, inpatient admissions dropped by as much as 7 percent in Chicago, and as much as 10 percent in New Jersey, predominantly in the northern part of the state that serves as a de facto suburb of New York City.

In a brief interview after her presentation, Goldstein attributed the decline in admissions to the lingering effects of the recession that began in late 2007 and represents the steepest economic decline since the Great Depression. She noted it results from individuals putting off certain procedures due to high out-of-pocket costs, as well as a migration of care to more outpatient settings.

Moreover, hospitals have been reluctant to admit patients directly for shorter stays due to the increased risk of drawing a RAC audit, preferring to place them in observation care instead.

"If hospitals are not reducing expenses, this can present a challenge," Goldstein said of the trend. She later added that observation stays often pay less than half of a typical Medicare inpatient admission.

Goldstein noted the median increase for hospital admissions for the past year has been flat, so there is likelihood some regions would see a decline. "It is very market-specific," she told FierceHealthFinance.

Conversely, hospitals have seen some bumps in patient admission volumes in markets such as Florida and Arizona. Goldstein attributes that to overall improvements in the regions' economies.