2015 Hospital Market Will Hasten Transition to Value-Based Payment Business Model

The 2015 economic outlook for the hospital industry continues to favor the largest, most geographically diverse health systems in the market, according to a new forecast from BDC Advisors, a national healthcare consulting firm.

The positive outlook for large non-profit hospitals and for-profit companies is due to economies of scale, geographic spread, favorable commercial payment rates and the ability to achieve revenue growth through diversification and addition of new services, according to a BDC Advisors paper released earlier this month.

Looking forward to the 2015 hospital market, the consultants predicted a challenging environment for providers, with pressure on revenue growth and rising expenses due to declining inpatient utilization rates, uneven growth of newly insured gaining coverage through insurance exchanges, the continued decline of the large employer insurance market and costly investments in healthcare IT.

To foster profitability, hospitals and health systems in 2015 will require strategic positioning and investment in change to a larger healthcare system with broad service capabilities, including development of the following:

  • Community-based, consumer-responsive ambulatory services including primary care access points, urgent care and emergency care service, and ambulatory diagnostic centers;

  • Consumer-focused solutions that allow the patient of the future to access care via on line and telemedicine services;

  • EHR and clinical analytics capabilities to manage care across a continuum and facilitate referrals across a health system for patient convenience and efficiency of care;

  • Effective integration of physician practices to a high-performing medical group or clinically integrated networks;

  • Consumer-centered strategy to respond to increasing decision-making and financial responsibility of the individual consumer;

  • Strategy to address price transparency, bundled pricing and retail pricing, and delivery of services.

Source: BDC Advisors, January 5, 2015

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