Hospital Revenue Sources Reach Dubious Milestone
Fortunately, hospitals and chief executives, by and large, have gotten this message. Several have told me in the past several months that "these are the good old days" and that reimbursements will never again be as relatively high as they are now.
With a few notable exceptions, they're working on the assumption that they need to get their expenses down by about 30% to survive on current Medicare rates. What they don't and can't know, entirely, is whether that will be enough.
How quickly those reimbursement rates will be ratcheted down, and by what means, leads to planning for a rainy day in the dark. It's just not possible to anticipate how far the cutting will go. As a result, many smaller hospitals are getting out of the game. The current high level of consolidation in hospitals is evidence enough for that. After all, there's no more draconian solution to long-term survival than giving up your independence.
In any case, don't look for quick or easy answers on how much will be enough. If recent history surrounding Congressional budget negotiations is any indication, there are none.
Philip Betbeze is senior leadership editor with HealthLeaders Media.
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