Hospital executives in a survey by Cowen & Co. say they don’t expect any near-term recovery in utilization of medical services for commercial health plan members, and nearly a third of those surveyed believe that this lower-than-average trend may be the “new normal.” To me that’s a sure sign that utilization is about to increase. Executives admit, however, that utilization picked up a bit in the fourth quarter of 2010. The survey notes:
Fewer surveyed hospital executives indicated large reductions in inpatient and outpatient volume in 4Q/10 relative to earlier in the year. Those hospitals witnessing down inpatient volume generally indicated declines in the 1-6% range versus 6%-plus. However, hospitals experiencing outpatient volume strength generally saw rises in the 1-3% range, with fewer indicating a rise of 4%-plus versus 3Q/10. Commercial volume trends in 4Q/10 seemed to consolidate towards an average of flat on both inpatient and outpatient metrics, with fewer extremes (either up or down).
The Cowen survey mirrors those of other Wall Street firms. An analysis by Credit Suisse finds that while hospital utilization volumes remained soft as late as the third-quarter of 2010, “volume trends improved as we moved through the quarter.” Deutsche Bank also finds that declines in MCO inpatient utilization trends appear to be moderating. In July, Deutsche Bank noted that MCO discharges were down 5.7%, compared to a 2.9% decline in September.
Is this the “new normal” or just the end of a downcycle? My guess is it’s the latter.