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Reimbursement: These Are the Good Old Days

Philip Betbeze, for HealthLeaders Media, June 11, 2010

What this tells me is that we're at an inflection point in healthcare payment. The feds hold the line on what they'll pay you, so your only option as a provider has been to raise rates on the commercial sector. As I've mentioned, that's not working anymore. Cross-subsidization, the practice of having the commercially insured pay the freight for government underpayments and the uninsured, is failing miserably, and will continue to do so.

"The capacity to pass costs into the system without resistance is going to be very difficult especially in those states that have high unemployment and lower disposable income," Bardis says.

That means hospitals and health systems are going to have to "lean out" the clinical workflow like never before. Among CEOs who attended MedAssets' conference, Bardis says that "in the longer view, the hospital has to play a much more direct role in the health and wellness of the community beyond the acutely ill."

Leadership will be what sets apart the winners and losers as health reform and other unstoppable business trends take hold. I've heard repeatedly about the "haves and have-nots" in healthcare since I started covering it 10 years ago. I've always tried to figure out why that divide exists. The reasons had been myriad. Bad payer mix. Large uninsured population. Poor insurance negotiation skills. Low market penetration. But sometimes, those good reasons for lack of competitiveness can also become excuses. I've seen that some hospital CEOs, usually not the ones profiled in the pages of HealthLeaders magazine or on this web site, see their role as more of a public service appointment than as leaders who are responsible for making the business actually work. We still have the haves and have nots. Some hospitals are in serious trouble, while others are nowhere near in trouble.

Hospitals have long tried to be all things to all people. It might behoove you to specialize rather than consolidate, for example.

"In a tighter reimbursement environment, CEOs will have to make harder decisions. They'll have to cut service lines that don't make money," says Bardis.

A mantra might be helpful as you try to position your hospital or system for success in the coming years. Just keep humming that fade-out of Anticipation. It's hard to get out of your head.

"These are the good old days . . ."


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Philip Betbeze is senior leadership editor with HealthLeaders Media.
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