Healthcare Uncertainties to Intensify in 2014
"We aren't suggesting that they unravel, but they have some core economic issues that they are going to have to deal with. So, they are going to have to understand that they are going to have to finance the transition because the commercial markets are not moving aggressively with them as they would like them too."
Bad Debt Rising
Exacerbating the problem, Whelan says, will be an expected rise in bad debt from growing numbers of patients with high-deductible health plans. "People are going to walk in the door where typically they may have had a $1,000 or $2,000 deductible now they have a $5,000 deductible and that is going to stress the system in '14. The bad debt is going to soar. Providers are going to do what they can to mitigate it, but in reality for that patient who used to walk in and have a reasonable deductible, now it's four or five times larger."
Tighter margins will prompt providers to rationalize the care they deliver.
"Health systems try to do everything for everybody but in reality they are going to have to choose those things that ultimately drive the most value for population health," Whelan says. "They are going to have to let niche providers or technology companies fill the gaps on some of these more invasive issues. Hospitals don't rationalize their business portfolios like a regular company does in a consistent manner."
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