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Healthcare CEOs Expect Flat to Negative Financials in 2014

Philip Betbeze, for HealthLeaders Media, January 31, 2014

Here's the dilemma for hospital and health system leaders: Many feel their reimbursements will ratchet down regardless of whether or not they make the big investments needed to transform their business models.

More than half of hospital and health system CEOs who participated in the 2014 HealthLeaders Industry Survey (61%) expect their organizations to record flat to negative financial results in 2014. Though many expressed a better degree of understanding of how healthcare reform efforts from both public and private actors will affect their margins, the reasons why are myriad.

If you've spent heavily investing in labor, capital and IT to help coordinate care and improve quality, you may see similar negative results to those who have largely ignored the call for reform. The picture isn't pretty for the majority of healthcare organizations regardless of their commitment to value-based care. But expect the margin stories to diverge from here.

Our annual industry survey is a massive effort that produces massive insight. We break out a CEO-only report as well, and I'm annually in charge of writing the analysis.

But I wish I'd gone for a stronger lead this time.

The fact that the majority of hospital leaders think that they will have either flat or negative results for the year is compelling. It suggests that they not only will feel the effects of a ratcheting down of reimbursement and a ratcheting up of risk-based payment, but that they increasingly won't have additional dollars to be able to invest in the labor, data analytics, data capture and coordination of care that will be necessary to perform at a level consistent with a positive margin.

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