Study Shows Hospitals Cut Labor, Operating Costs to Offset Lower Revenue

Hospitals will reduce operating expenses—mostly by cutting labor costs—to make up for reduced Medicare revenues under the Affordable Care Act, according to a study published online in the Oct. 1 issue of the journal Health Services Research.

That finding stemmed from an examination of how hospitals coped with changes in Medicare payments over time.

The ACA permanently slows the growth of Medicare payment rates for inpatient hospital care, which raises concerns that hospitals will raise prices for private payers to offset lower Medicare revenue.

Operating Cost Adjustments.

However, the study found that worry is not necessarily true. On average, the ...