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Predictions for 2014! Will They Be the New Reality?

Predictions for 2014! Will They Be the New Reality?

As enumerated in our first blog of 2014, posted on January 6th, most of our predictions for health care changes in 2013 became reality. Even one of the most provocative blogs entitled, “I Have a Dream: Acute Hospitals Are No Longer Necessary”, seems to have increasing credibility with numerous healthcare leaders. One such person is Dr. Robert Pearl who published a recent article in Forbes Magazine entitled, “Hospitals May Be Disappearing in the Era of Health Care Reform.”

So, based on our track record, the Royer-Maddox-Herron partners will make the following predictions for 2014, many of which will be expanded upon in upcoming blogs:

1. Rapid changes will continue to occur in all components of the healthcare arena regardless of the degree of success of the Accountable Care Act/Obamacare. Most everyone agrees the healthcare product must become safer, guarantee a more consistent and predictable higher quality, be more accessible, and be affordable to all.

2. Growth of the revenue line will become almost impossible. The slim revenue growth that may occur will only be in hospitals or health systems in organically growing markets, where the quality is so high that they can steal market share, or where a new service line can be added that people will want to buy.

3. Integration will continue, both with hospitals and physicians. At present there are about 4900 hospitals. Just 25 years ago there were over 7000 hospitals. People are realizing that hospitals that provide easy access, but with little volume, might be contributing to poorer quality of care. And hospitals and physicians realize that if high quality and lower cost care is to occur, they must work more collaboratively together as partners. Various physician integration models are being designed and implemented in the U.S.

4. Inpatient volumes will continue to decline. Technology and evidenced-based medical protocols will continue to permit more of the care of patients to be rendered in out-patient settings, including clinics, ambulatory surgery centers, hospice, palliative care, and hospitals-at-home. Telemedicine will grow and contribute to this expansion, and the continued pressure to reduce hospital readmissions, decrease unnecessary procedures and tests, and implement successful care management programs will further add, in a positive way, to the declining number of patients requiring hospitalization.

5. Primary care access will continue to be a problem. The ongoing lack of primary care physicians will result in the continued inappropriate use of Emergency Departments, where volumes will continue to rise between 5% and 10%. This will also: (6.)propel the growth and use of mid-level providers; and (7.)the growth of free standing urgent and convenient care centers. In addition, this will foster (8.) an increase in the services provided by the “new rebar” expanders of healthcare services they provide……Walmart, Target, Walgreens, and CVS….to name a few.

9. Supply and labor costs will need to be reduced even further….less than 60% of expenses. We have been recommending to our clients that they must strive to make money using the Medicare payment schedules, since we believe this will be the level of payment for all payers in the future. To accomplish this, we will see an increase use of (10.) Lean (to enhance speed and decrease waste) and Six Sigma (to increase accuracy and predictability).

11. The call for more transparency of outcome data will increase. And if providers do not come forth, the insurance companies and the government will continue to fill the void and make value/purchasing decisions based on data they have, valid or not.

12. Innovative programs to foster health and wellness, population management, and the increased use of complementary medical protocols for certain diseases will increase and gain national attention. The movement to health management rather than disease management as the primary role of health care providers is gaining traction and will result in some significant changes and further reduce volumes particularly, in inpatient settings!

13. New and enhanced leadership competencies will continue to evolve. Health Management Masters Programs for both future physician executives and Administrators will continue to be accredited on demonstrated competencies that their students develop. Boards will be struggling to hire the right CEOS or invent the present leadership teams to develop the new competencies required to be successful in this rapidly changing environment. As a result of this pressure, the high turnover of CEOs experienced in 2013 will continue.

14. Because of the level of uncertainty that still exits, Boards and Leadership Teams will allocate significant time to strategic planning and future thinking. There is no better time to focus on the future when you are significantly challenged by the present!

These are some of our thoughts for 2014. We would love to hear your reactions , which can be sent to us through our “Contact Section” of our Web Page atv And hopefully, as you continue to reflect on our blogs, these predictions will make even more sense as this year’s journey in healthcare continues. And of course, we will pause in January of next year to ask the all important question, “Did what we predict, become reality?”