Re­form drives in­dus­try’s shift

Modern Healthcare - - SPECIAL REPORT -

As health­care ex­its a year in which re­form sur­vived ma­jor chal­lenges and en­ters the fi­nal year be­fore mil­lions are ex­pected to gain health in­surance, the in­dus­try’s push to gain greater ef­fi­ciency will con­tinue to trans­form op­er­a­tions, heighten pres­sure on qual­ity ini­tia­tives to de­liver a re­turn and squeeze sup­pli­ers to the na­tion’s hos­pi­tals and doc­tors.

Years of cost con­trol among U.S. hos­pi­tals will force the sec­tor to un­der­take more fun­da­men­tal changes to care de­liv­ery to fur­ther curb ex­penses in the coming year. But that won’t ease pres­sure to squeeze spend­ing on med­i­cal and sur­gi­cal sup­plies, an on­go­ing tar­get for hospi­tal cost-con­trol ef­forts (p. 31). Ini­tia­tives to im­prove qual­ity will be un­der in­creas­ing pres­sure to de­liver a re­turn on in­vest­ment along with bet­ter out­comes (p. 30).

The year ahead will also bring con­tin­ued con­sol­i­da­tion in sev­eral sec­tors.

New pay­ment models, such as ac­count­able care and a coming in­flux of newly in­sured un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act will con­tinue to drive hos­pi­tals to ex­pand their care net­works, in­clud­ing physi­cian prac­tice ac­qui­si­tions (p. 28). For-profit hospi­tal op­er­a­tors will use read­ily avail­able cash and ac­cess to debt to fi­nance more deal­mak­ing (p. 28).

But con­sol­i­da­tion hasn’t been with­out chal­lenges. An­titrust au­thor­i­ties can ex­pect a de­ci­sion this year in one case from the U.S. Supreme Court. Other cases will likely lead to high-pro­file court bat­tles (p. 29).

The threat of sched­uled (and pro­posed) cuts to fed­eral health spend­ing also looms over the coming months.

Medi­care was sched­uled to cut spend­ing by up to 2% in Fe­bru­ary as part of a deficit-re­duc­tion law that trig­gers fed­eral tax in­crease and spend­ing cuts in 2013. Ne­go­ti­a­tions to avert those bud­get mea­sures in­cluded one pro­posal that could raise bor­row­ing costs for not-for-profit hos­pi­tals (p. 27). And could this fi­nally be the year physi­cians see a long-term fix to their Medi­care pay­ments (p. 30)?

Pub­lic hos­pi­tals, mean­while, con­tinue ef­forts to undo cuts to Med­i­caid’s dis­pro­por­tion­ate-share pro­gram (p. 30). For more on th­ese trends, read on.

—Me­lanie Evans

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