Revenue Can't Fix Bad Metrics; Only Strategy Can
Low interest rates coupled with expense reduction and waste elimination strategies have also allowed the bold to chase acquisition and fund outpatient growth strategies that may have previously been cost-prohibitive. But expense reduction and balance sheet improvement have their limits, and interest rates won't always be this low, say analysts from Moody's.
"With expected flat revenue growth and many low-hanging expenses already removed from operating structures, management teams and hospital boards will seek deep process changes to reshape their model of healthcare delivery and create greater efficiencies," the report argues.
If you're delaying this type of deep systematic change for any reason, you won't be able to hide much longer.
Because time appears to be growing short for those who have failed to articulate a strategy of how to survive independently in a much more complicated financial milieu for hospitals and health systems, and because some of the reasons for upgrades noted above have a limited degree of sustainability, you should be aware and be ready to adjust your strategy quickly.
The time for watchful waiting on strategy appears to be over.
Philip Betbeze is senior leadership editor with HealthLeaders Media.
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