Today’s Managing Health Care Costs Indicator is 200
That’s how many job cuts three hospital systems in Massachusetts
Moody’s just announced a “ negative outlook” for the nonprofit hospital sector, predicting ”weaker financial performance ahead due to a sluggish economic recovery, growing levels of uncompensated care, and flat volume trend.” Moody’s analyst notes that “hospitals that can execute deeper levels of expense management through fundamental changes in their operations will be positioned better to navigate the next couple of years.
Moody’s earlier noted that Medicare cuts would cost the nonprofit hospital industry $440 million in the next year.
This is certainly contrary to Christine Roemer’s statement 6 months ago that “health care will remain a large source of job growth in the labor market.” At the time, I worried that increased health care employment meant that we would not get a grip on health care inflation.
Bad news: Many hospital workers are unemployed, at a time when the job outlook is dim. Further, for every job lost, there are multiple jobs that are not created.
Good news: This means we’re finally going to see a lower rate of medical inflation
Bad news: Health care is an engine of economic growth, representing 12% of all employment in the country (15% in Massachusetts US
Cutting the rate of health care cost increases is critical to our economic future, and health care costs increasing at a rate 2-4% higher than overall economic growth is not sustainable. Cutting this cost growth is not going to be painless, though.
