News

'Two midnights' rule dims Pardee's fiscal picture

By Bill Moss, Published: December 20, 2013

A survey of 100 hospital by the Citibank's research arm showed that hospital inpatient admissions in November dipped to their weakest level in more than 10 years and that in October and November combined admissions were 4-5 percent lower than the same period of 2012.
"And in November, just 5 percent of respondents reported year-over-year growth in inpatient admissions, the lowest number in the 11 years that Citi has performed the survey," the CitiResearch report said.
Hospitals attribute the drop in admissions to the so-called "two midnights" rule, which requires hospitals to treat patient stays lasting less than "two midnights" as an inpatient — and thus less expensive — visit. Changing physician practice payment models and the botched rollout of the Affordable Care Act have also created stiff headwinds for the hospital industry.
"It could be that if that (weak financial trend) continues, we and all hospitals are going to have to think through how we deal with that reduction ins admissions and reduction in revenue," House said.
In a report on the books for 2012-13, CPA Steve Stang, of the CliftonLarsonAllen firm, reported that Pardee's days of cash on hand, a common measure of a hospital's ability to meet operating costs, had risen by one day, to 135 days.
"Some of us remember when our goal was 60 days and we were wondering if we were going to get there," chairman Bill Moyer said.
Stang said Pardee's cash reserve was better than most.
"A lot of hospitals stuggle to maintain 75 days," he said.