Financial Forecast Follies
What does HealthLeaders Media's 2013 Industry Survey reveal about healthcare organizations' financial prospects? Our newly released report, with 823 respondents who form a representative sample of healthcare leaders from a cross-section of organizations across the United States, shows big concerns about reimbursements, specific plans to fuel financial growth, and maybe a touch of overconfidence about the bottom line in the coming year.
Healthcare executives are overwhelmingly concerned about reduced reimbursements in 2013: 92% say it's the top threat to their organizations. Medicare and Medicaid payment rates are scheduled to decrease this year.
Though the effect on individual organizations will depend on their patient mix, the overall effect on the healthcare sector will be negative now that the number of Medicare and Medicaid enrollees exceeds the number of full-time private-sector workers. With readmissions penalties also taking hold, the coming year could be bracing.
Where will the shortfalls be made up? Healthcare executives tell us they will try a range of tactics. To begin with, they plan to look for adjacencies to their existing business. The top option in the Industry Survey for fueling financial growth over the next five years is to expand outpatient services, chosen by 57% of respondents.
HealthLeaders has written about hospitals' competitive moves against outpatient centers, which leaders see as "skimming" patients and revenue for profitable services.
In a similar vein, the next most popular move to create financial growth is starting or increasing promising businesses or facilities (chosen by 43% of respondents). Service line expansion comes to mind. Healthcare leaders also say they need to do a better job of marketing—both their organizations' existing offerings (chosen by 43% of survey respondents) and new businesses (30%).