You recently completed a survey on the acute care hospital industry. Could you discuss some of the findings?
The industry is facing difficult headwinds in the near term. A weakening economy will push uninsured volumes higher while pricing pressure increases. Hospital admissions are on the decline. Nearly half, or 46.7 percent of [our] contacts, reported lower admissions year-over-year in the fourth quarter of 2008. This is a huge shift from the 48.5 percent of contacts reporting increases in the third quarter of 2008. Only 13.3 percent of hospitals surveyed had higher admissions in the fourth quarter of 2008 compared to the fourth quarter of 2007.
You mention the importance of uninsured patients. Could you expand on that?
Uninsured admissions rose sharply from the third quarter. Approximately three-quarters, or 75.9 percent of hospitals, saw a rise in self-pay patient admissions since the fourth quarter of 2007, a jump from the 59.4 percent reporting increases during the third quarter. Many respondents cited the economic slowdown as one cause for the change. A rise in self-pay volumes was a nationwide phenomenon. Nine out of ten states in our survey reported rising self-pay volumes, with California and Florida representing 41 percent of the hospitals with more self-pay patients.
Do any other issues stand out?
Surgical volumes are falling, even for outpatient procedures. Inpatient surgical growth fell to just 26.7 percent of contacts, which is down from 36.7 percent in our previous survey. More importantly, 40 percent of hospitals reported year-over-year inpatient surgery declines. Growth in outpatient surgeries also fell. This quarter, more contacts, 43.3 percent, reported falling outpatient surgical volumes than ever before.