*/
I’ve never been a happy consumer of those articles written in the month of January that predict healthcare trends for the forthcoming year.
While they can be interesting to read, they always seem a bit too broad to truly provide any concrete, actionable information. From the diverse perspectives of healthcare providers at various sites and at multiple size facilities, can such predictions be of any practical use?
Of course, stereotypes of all sorts practically beg to be demolished.
To whit, I recently came across a 2011 preview that dealt less in generalizations, such as “Expect political gridlock,” and focused more on the specific challenges and opportunities facing U.S. hospitals – and not just hospitals broadly, but hospitals categorized by organizational type.
The preview in question was not created by a journalist, but by a strategic and financial consulting firm whose clients are those very hospitals and health systems trying to make sense of a post-recession, post-reform world in 2011.
The brain trust at Skokie, Ill.-based Kaufman, Hall & Associates knows, like most healthcare industry observers, that economic change and reform are creating new business models for hospitals, but that these changes will affect facilities in divergent ways.
For instance, in its 2011 “preview,” Kaufman Hall describes the very distinct challenges faced by critical access hospitals and massive regional health systems when it comes to healthcare reform.
The firm notes that critical access hospitals (CAHs) are essential healthcare access points for their communities and hence usually have strong political support. Unlike other facilities, they can also count on cost-based reimbursement. However, in a new era where quality may be the key to revenue, there are questions whether CAHs have the ability to compete with larger players on quality issues. Their lack of scale means that, at a minimum, CAHs “require effective clinical partnerships to provide appropriate patient access and referral management.”
In contrast, most regional healthcare “superpowers” (Kaufman Hall’s term) have a very scalable business model, powerful market influence and favorable access to capital. These health systems began repositioning for payment and delivery system reform years ago, and so are better positioned for change than the small CAHs.
However, the regional superpowers must successfully manage enterprise risk and resource allocation, maintain the consistency of products and services across large geographic areas and provider categories and manage their investment portfolios tightly.
This sort of analytical breakdown is much more useful than a generic assessment of socio-economic trends impacting the industry.
Kaufman Hall’s analysis doesn’t end with a look at the largest and smallest of hospitals. It gets even more specific.
Similar to the regional superpowers are academic medical centers, Kaufman Hall notes. Indeed, these teaching institutions “maintain all of the key elements of an integrated delivery system,” and some AMCs eventually evolve into “superpowers.”
Yet like the dominant regional systems, AMCs will be challenged in 2011 to manage their enterprise risk. Even more daunting may be the slow moving institutional decision-making process common at academic centers, the difficulty in moving to a team orientation in care delivery and the need to increase the clinical productivity of their physicians.
Just as AMCs have opportunities and challenges in 2011 that owe to their academic structure, Kaufman Hall says faith-based healthcare systems have their own distinct strengths on which to build value under health reform.
Most faith-based systems have a well-defined mission, sophisticated managerial resources and strong capital access. Yet will these systems be able to develop economically viable partnerships with other provider organizations, given their mission? And management of their investment portfolios can prove especially challenging to faith-based systems, where the culture is not typically “bottom-line driven.”
But 2011 may be most challenging for those hospital categories that have always been greatly challenged: community and public hospitals.
Public, or safety-net, hospitals may be skilled at delivering care to defined populations on fixed budgets, but they will have difficulty maintaining their funding support and will likely be faced with increased competition from private hospitals and health systems, according to Kaufman Hall.
And as for community hospitals, their lack of scale and access to capital, as well as concerns about their ability to manage risk, have many observers thinking 2011 could be a year of hospital consolidation, as small facilities are gobbled up by regional behemoths.
So, what does 2011 hold for U.S. healthcare, specifically U.S. hospitals? As Kaufman Hall’s analysis reveals, it really depends on what kind of facility you’re talking about, its location and the population it serves.
Not so simple, eh?