Health spending overall has slowed, the report also noted.
The slowdown in U.S. health spending has been evident in federal budget projections, which have shaved tens of billions of dollars off Medicare's projected costs as sluggish health spending growth persists. That has raised questions among policymakers and the industry about the source of the drag and how long it may last.
Fitch Senior Director Megan Neuburger said several factors may contribute to continued slow growth in hospital admissions. Patients increasingly pay a larger share of their medical bills, she said. New federal policies have sought to curb repeat hospital visits or have led to more patients being held for observation, rather than admitted to the hospital. And hospitals face increasing pressure from private insurers to treat patients in low-cost settings other than the hospital.
Hospitals will also see a shift away from fee-for-service payments toward insurance contracts that increasingly put providers on the financial hook for patients' medical costs, she said. Such contracts among for-profits have so far “been around the edges,” but are expected to increase in coming years.
Among the hospital operators rated by Fitch, admissions dropped an average of 3.8% during the first quarter compared with the same period the prior year, but up to half of the drop was because of an early Easter and last year's Leap Day, the report said.
Follow Melanie Evans on Twitter: @MHmevans