Unstable Demand and Cost per Case in Low-Volume Hospitals
About this project
This Findings Brief looks at the effects of year-to-year changes in annual inpatient discharges on costs per Medicare discharge. Low-volume hospitals, regardless of location, experience significantly greater total variability in inpatient demand across years, and greater changes in annual discharges that cannot be forecasted as part of an individual hospitals’ trend over time (see NC RHR & PAC Findings Brief, “Unpredictable Demand and Low-Volume Hospitals”). The current analysis finds that small hospital costs are also more sensitive to volume changes. As a result, average costs per discharge are less stable, making it particularly difficult for these facilities to predict and manage profitability under fixed payment schemes