How Big, How Soon?

This article appears in the January 2012 issue of HealthLeaders magazine.

Hospitals and health systems are rapidly transitioning their businesses to deal with some of the known truths about healthcare reform. For one, reimbursement is going down, so they'll be looking to do more with less. Two, the acute care hospital will not be the engine of growth. Outpatient services will. But amid these generally accepted facts, perhaps the greatest unknown is service capacity. Will they be ready for an influx of patients as more people become insured?

Hospital leaders can make educated guesses about what services and facilities the newly insured may need, but committing real dollars to building them requires insight and practicality. Further, reimbursement for these patients is expected to rival Medicaid levels, not commercial payer levels, so caution is required when allocating capital to deal with the expected influx.

In a recent HealthLeaders Media Intelligence Report, Better Care and the Bottom Line, some 69% of healthcare leaders surveyed said that they are ready to handle the projected addition of millions of insured patients into their healthcare systems over the next two decades. But how can they be so sure when even experts can't predict the scope of the surge of patients or in what setting they will likely present. Many of the advisors in the report, hospital executives themselves, expressed skepticism that their peers could be so sure about their readiness.

Regardless, capital investment is by nature long-term, so hospitals and health systems are struggling with how best to invest that capital to ensure not only that they're providing the best care for their community, but that they are positioned to take advantage of the best possible reimbursement when providing that care, which will increasingly shift to outpatient facilities.