Medicare Requirement Drives Increase in HealthStream Earnings

A Nashville-based medical software company is reporting a 10 percent jump in profits for the third quarter. The increase at HealthStream was fueled in part by a requirement in the federal healthcare law.

Hospitals that get Medicare funding are now required to ask patients about the quality of their care. High performers get more money. Low-scoring hospitals can see a cut in their Medicare dollars. Patient satisfaction surveys are one of HealthStream’s biggest products.

CEO Robert Frist says they were also a major factor in his company’s earnings growth, as hospitals rushed to comply with the law.

“For the 3rd quarter of 2012, revenues from our patient survey business increased eight percent over the 3rd quarter of 2011. There’s going to be even more and more attention paid to the scores and the metrics of these patient surveys as we enter into next year.”

Survey questions include “How well was your pain controlled?” and “Did the doctors and nurses treat you with respect?” In all, HealthStream reported $ 28 million in earnings for the third quarter, compared with 20 million the same time last year.

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