“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” — The Red Queen in Lewis Carroll’s Through the Looking Glass
Just like hypertension, inflation is the silent killer, the hidden tax on your business, dreams, and desires.
Providers from physicians to ASCs celebrated when CMS’s final fee schedules for 2022 either weren’t cut as deeply as expected (an average reduction of 3.85% for physicians) or were increased slightly (2% for ASCs).
Yet, with 20% of the dollars in circulation having been created in 2020, the inevitable result is quickening inflation, a hidden tax on all concerned.
The general Consumer Price Index jumped up approximately 7% last year. But data from the Bureau of Labor Statistics shows a 50% year over year increase in the cost of gasoline, food prices up 6.3%, and new car prices up close to 12% . . . if you’re lucky.
Unless you were prescient enough to have negotiated CPI increases into your payor agreements, costs may eat you alive while the inflation indexed value of reimbursement shrinks. Combine that with labor shortages in the healthcare industry that are pushing salary expectations, often expressed as take it or leave it demands, many practices and facilities are slipping into the danger zone.
Even if you weren’t that perceptive, renegotiate up what you can now. Don’t let contracts auto-renew. Don’t sign whatever contracts come in the door. Don’t think that going into hospital employment or selling your facility to a hospital is anything more than a short-term solution to a much larger long-term problem.
