Payer mix: Hospitals face challenges when they seek savings

Hospitals optimally want to have some control over their payer mix, but the matter is often out of their hands.

The location of the hospital plays a big part in its payer mix, as well as other circumstances that drive patients into its beds, according to Healthcare Finance News,

"A north Dallas hospital probably wouldn't care about Medicaid," David Dyke, vice president of RelayHealth, told Healthcare Finance News. However, "a facility that's 80 percent Medicaid by volume is living and dying by those reimbursement levels. It's a reality of something you have to deal may be very difficult to get the patients who have higher yield, but I've got to figure out how to get them to come to me, or go to them."

Hospitals are already under significant pressure to maintain their patient base, let alone expand it. Inpatient volumes turned slightly positive in 2014 for the first time in many years, aggravated by the Great Recession and the decision by many patients to put off elective procedures. And many providers have to make tough decisions regarding how many Medicare patients they take on in the wake of various mandated population health initiatives.

The Temple University Health System in Philadelphia has tried to take a very challenging payer mix--46 percent are covered by medical assistance programs--by focusing on tertiary services such as cardiac, pulmonary and organ transplants. That has helped the system increase its local market share, according to the article. 

Hospitals that have a more traditional payer mix and want to make changes may have success with increasing its share of commercial business or negotiating better contracts, experts told Healthcare Finance News.

To learn more:
- read the Healthcare Finance News article