PR - HFMA Report Forecasts the Future of Healthcare

Today, healthcare is a highly scrutinized endeavor, with inadequate payment, rising costs, and intense competition. Coping with today’s healthcare environment is more than enough to keep any leader fully occupied. However, to be truly effective, leaders must have a vision for the future and a plan for moving from today’s situation to fulfillment of that future.

"It’s daunting to anticipate the future. Yet maintaining future-focused perspective is vital to ensure resources are available to fulfill the critical mission of health care for the long term," Richard L. Clarke, DHA, FHFMA, president and CEO of HFMA."

The Healthcare Financial Management Association’s (HFMA) Healthcare Finance Outlook 2008-2013 combines forward-looking research and analysis with knowledge from some of the best and brightest in the industry.

HFMA surveyed and interviewed more than 100 of the leading financial executives and industry advisors, and selected thought leaders to forecast major industry movement over the next three to five years in the four areas that drive healthcare business success, volume, cost, pricing/payment and capital. The results include:

Volume

• Physician integration is expected to be the most significant trend in the next 3-5 years, with quality improvement, coordinating care, lining up incentives to reward preventive care and chronic disease management as key topics. There will also be an increasing momentum towards collaboration and an alignment of incentives.

• Another volume issue will be the accelerating shift in healthcare delivery to non-hospital settings. That includes both lower-acuity settings as retail healthcare becomes more prevalent.

Pricing/Payment

• Medicare and Medicaid spending are clearly the predominant concerns regarding payment issues; leaders remain pessimistic about the federal government’s ability to adequately fund Medicare and Medicaid.

• There is some optimism that we are entering a new phase of opportunity to resolve some of the long-standing problems with our healthcare system – political momentum seems to be building on all levels – federal, state, and private.

Cost

• Most significant issue is expected to be the cost of new regulatory burdens, as accelerating regulatory/compliance requirements increase demand for healthcare workers and drive up costs

• Development and marketing of preference items/new technologies will markedly increase supply/pharmaceutical spending

• Quality improvement initiatives will add costs in the short term but help control costs in the long term

Capital

• The cost of capital will increase and will constrain capital spending, especially for hospitals with poor financial performance.

• Charity care/community benefit scrutiny will increasingly threaten health providers’ tax-exempt status.

To meet these anticipated challenges, Healthcare Finance Outlook 2008-2013 recommends hospital financial leaders take the following actions:

Embrace consumerism – Improve the revenue cycle through technology, process, and people; Strive for price and quality transparency; and Develop an effective pricing strategy

Manage financial performance – Ensure revenue capture; Enhance efficiency; Control costs and manage investments; and Implement rigorous strategic financial planning

Focus on physician integration – Assess the range of options for physician integration; Ensure that economic incentives are aligned; Focus on recruitment and retention; and Move rapidly

"Healthcare Finance Outlook 2008-2013 is an important resource to help organizations stay ahead of industry change and make a difference in improving health care for the patients and communities they serve," Clarke said.