An article published last week by Becker’s Hospital Review discussed ten concerns and trends that can be viewed as opportunities and/or threats depending on the hospital’s size, market and other factors. The article is linked below; here’s a high-level summary:
1. Growth of High-Deductible Plans – Patients are looking for lower-cost healthcare options, including urgent care centers and other clinics.
2. Growth of Accountable Care Organizations – An analysis conducted during May identified 626 ACOs covering 20.5 million lives in the country; expect more ACOs led by hospitals and physicians for Medicare, Medicaid and commercial health plans.
3. Intensity of Rivalries – Competition for patients, doctors and payer contracts is intensifying, however, the intensity varies across geographic areas; rivalries are developing not only locally, but also nationally and sometimes even internationally.
4. Reduced Inpatient Procedures – The average inpatient procedure generates revenue that is 600% to 1,000% higher than outpatient procedures; declining numbers of inpatient procedures appear to be occurring across all service lines offered by hospitals.
5. Layoffs – Approximately 100 hospital layoffs have been noted so far this year by Becker’s Hospital Review.
6. Narrow Networks – To attract consumers by offering low premiums, some insurers are selling narrow-network policies through the ACA health insurance exchanges; hospitals in these narrow networks are at risk for decreased revenue due to lower payment rates, which is typically not the case in broader contracts; however, hospitals that avoid these narrow-network contracts are vulnerable to losing market share.
7. Shift to Population Health/Managed Care – Providers are increasingly embracing pay-for-performance models; a study published last month by McKesson found that 81% of hospitals and 90% of payers have signed on to or are currently offering complex reimbursement models that combine fee-for-service and other models.
8. Huge Growth in Health IT Spending – A survey of hospital executives completed this year by the research firm Premier found that almost half of the executives said their largest capital investment this year will be for health information technology.
9. Competition for Physicians – The nation’s aging population will contribute to a shortage of physicians in the US; one study shows a shortage of 130,600 physicians by 2025, and another study shows the need for specialists to care for the elderly will double between 2013 and 2025.
10. Staying Independent – Standalone hospitals with revenue under $300 million will face greater difficulties because of: a) their lack of clout with payers, b) the need to invest large sums in health information technology, and c) the shift to pay-for-performance.
For more details, see Becker’s Hospital Review at: