Last Friday, the FEHBlog mentioned a Wall Street Journal article on rising hospital prices. Modern Healthcare notes that
The Altarum Institute's Center for Sustainable Health Spending estimated that spending on hospital care jumped 9% from February 2014 to February 2015. That's a “giant” increase, said Paul Hughes-Cromwick, a senior health economist at Altarum. By contrast, hospital spending climbed only 3.1% from February 2013 to February 2014.
On Friday, the Centers for Medicare and Medicaid Services released its proposed rule governing Medicare Part A's inpatient prospective pricing system for FY 2015. (Medicare Part A operates on a federal government fiscal year while Part B operates on a calendar year basis.) "The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is 1.1 percent." The CPI-U decreased by .1 per cent comparing March 2015 against March 2014, halfway through the Medicare Part A fiscal year. (Interesting statistic when you consider that Congress is consider adjusting the FEHBP government contribution based on this metric.) Nevertheless, according to the AHA News, “Today’s rule implements numerous congressionally-mandated policies and provisions in the context of the existing payment system,” said AHA Executive Vice President Rick Pollack. “These very modest increases will make it even more challenging for hospitals to deliver care patients and communities expect.” When Medicare pressures providers, prices go up for private sector payers like the FEHBP.