Recently, we had an opportunity to review the 2009 and 2010 Medicare Market Share Database from the Centers of Medicare Services. Ordinarily, this might seem like a very tedious assignment, but using some advanced analytics from Stratasan, we were able to look at the data in some new ways. Below are our findings from the data to get you to think about strategies to deal with Medicare today and in the future.
2010/2009 Medicare Market Share Analytics
In one year, there was an average increase of 5.1% in average charge per Medicare patient and 7.6% increase in Total Patient Charges to $594B. How many of you were able to increase your prices by 5.1% last year? I guess not many. More important, Medicare Patients, Charges, and Patient Days all increased. All three categories saw increases. The one area I don’t really understand is Patient Days. I really thought this area would decrease over the past year. Not so, it increased by 7.6% from 2009 to 2010.
What’s really scary is that all areas should see another increase this year. More patients, sicker patients, and slow adoption of HIT will continue to accelerate the price for Medicare patient in the coming years. Put this on top of the massive number of “Boomers” moving through the healthcare system and the trends point to some tough times ahead for Medicare.
The overall number of Medicare patients increased by 2.4% from 2009 to 2010. Charges increased by 7.6% and “Days” increased by .93%. But the raw numbers are really scary. Medicare patients accounted for 21% in 2009. In total, US Hospitals experienced $594,139,209,085 in charges according to CMS. This $594 Billion was spread across 14,929,510 patients and consumed 86,436,835 days of care in our hospitals.The scarcely told story concerns the rapid pace of average hospital expense growth of more than 5.1%. New technologies in imaging, pharmaceuticals, and HIT will accelerate the cost side of the equation at least through 2015. According to SHRM (Society for Human Resource Management), the cost to employers is expected to rise by 8.5% in 2012 compared to 8.0% in 2011.
Of course, it should be noted that our last day on Earth is usually our most expensive. In future blogs, we will discuss the hockey stick curve of healthcare expenses and why Hospitals love the slap shot. In addition, we will cover the psychographics of Medicare.
Sources: 2009 and 2010 Medicare Service Area Files, CMS, SHRM, ESRI 2010 Population Data.