Service Lines and Bottom Lines
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This article appears in the May 2014 issue of HealthLeaders magazine.
In our December Intelligence Report, more than one-third of healthcare leaders (36%) said it is likely they would drop clinical services as a way to cut costs or enhance margin. What do those results suggest generally, and how is your organization handling its clinical services?
Baldwin Area Medical Center
Healthcare needs to change, and it will change. The biggest challenge for healthcare organizations is going to be riding the transition to a future reimbursement model based on value, and how do you reduce costs and increase quality while designing the delivery system of the future?
How do you move from our current world in which all the revenue is based on face-to-face visits and admissions to a world where revenue is based on effective management of total cost of care? Right now if we do a group visit or health coaching, we don't get paid for that. These things are a great way to reduce costs, so the challenge is going to be moving to the new care delivery model incrementally in a way that allows you to keep your margins steady.
There are a lot of services that we offer that we don't make money on, and we are going to have to evaluate which of those we can continue to offer or other ways that we can reduce costs. We are a critical access hospital, so closing services means people have to travel further. You want to offer services that meet the needs of the people who live in your region, but you also have to have a black bottom line.
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