Hospital productivity trends: Implications for Medicare payment policy

The Affordable Care Act called for CMS to reduce payment updates for inpatient hospital care on the basis of anticipated productivity gains. But since 2014, Medicare margins have been declining and are now in negative territory. However, overall hospital margins have been healthy and stable as the gap between private insurer payment rates and Medicare rates has grown.

On June 25, 2019, the USC-Brookings Schaeffer Initiative for Health Policy hosted a conference on hospital productivity trends and their implications for Medicare policy on hospital payment rate updates. The event consisted of a presentation on the established literature on hospital productivity, followed by two expert reactions, and a panel to discuss the policy implications of these trends and possible changes in policy.

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