This new concept is charge-per-episode and will result in shifting more financial risk to hospitals.
Medicare and Medicaid are still a concern because without funding, the hospital and payers will have to pick up that piece of the cost. Everyone is pulling back in our area due to what’s happening with the economy, and there’s a reduction in demand for inpatient services.
Patient volume. Doctors are having cancellations and empty slots, and our inpatient volumes are off—the first time in five years. So we’re doing a deeper dive into our service lines to understand new sources of changing inpatient volumes. As people’s needs for outpatient services continue to morph, we find this will be a major focus for hospitals in order to maintain market share. We’re putting a performance plan in place to reduce expenses to match our new revenue base due to lower volumes.
Meaningful use. We are really moving on completing our meaningful use requirements, and we’re well-positioned for 2012. We received just shy of $3 million back for it. We will continue to develop our business intelligence platform to reap the benefit of data that meaningful use has provided.
Which area do you anticipate affecting your margins most, and how will you try to offset the impact to your bottom line?
Reimbursements. We had put our merit program on hold, and we hoped to put an increase back in for 2011. We were able to put a modest merit increase of 1.5% this year. However, next year we expect reimbursement changes to affect our margins the most, along with whatever is causing our volumes to drop. We’re looking to get more process standardization and process improvement in place.
What areas are you analyzing for growth opportunities?
Service lines. We do have key service line acquisitions of physician practices. We are also continuing to expand our outside surgeons for general surgery growth. We’d also like to continue to grow our women’s health.
What do you see happening with payer-provider relationships in 2012?
Neutral. We’re rate controlled so it’s not as much of an issue, but we do still negotiate for unregulated business. I don’t see any reasons why things will change for the better or worse next year; I think we’re probably on a neutral outlook.
This article appears in the December 2011 issue of HealthLeaders magazine.