Skip to main content

For Strategists: 15 Key Factors Affecting Hospitals' Longer-Term Outlook

"Never make predictions, especially about the future." (Casey Stengel)

From Becker's Hospital Review, here's 15 Key Factors Affecting Hospitals' Longer-Term Outlook. (The parenthetical comments are mine.)
  • Promise fades for more paying patients. (You were expecting otherwise?)
  • Reimbursements lag further behind inflation. (Ditto.)
  • Number of paying patients in long-term decline. (Mega Ditto.)
  • Overcapacity of beds in some areas. ("But ours are shiny and new!")
  • Negotiating strength moves to insurers. (BOHICA)
  • Insurers may not need to be tough negotiators. (Yeah, but it's a tough habit to break.)
  • Patients continue shifting to high-deductible plans. (Get ready for "What's your price for an EKG?")
  • Hospitals forced to become more efficient. (As competition transitions to price and value.)
  • Payors move to bundled reimbursements. (Allocating the bundle among hospitals and physicians is, of course, the sticky wicket.)
  • Providers coalesce into integrated systems. (Deals hastily assembled by CEOs and painstakingly taken apart by attorneys.)
  • Physicians fall in with hospitals. (Sleeping with the enemy looks better than sleeping with the fishes.)
  • Small hospitals seek shelter with larger ones. (Small hospital CEOs: Be careful what you wish for.)
  • Capital needed for IT introductions. (Needed even more: a business case.)
  • Non-profits' debts stay comparatively small. (Compared to what?)
  • Discounts for construction become available. (Until the next bubble.)
So what's a strategist to do with a list like this? Lists abound and it's certainly possible to take issue with or refine each prediction. Still, when the arguments abate and in the spirit of "it's better to be roughly right than precisely wrong" smart planners use such forecasts to spark scenario-based discussions with leadership teams.

What if...? Why not...?

What if...the authors are right and small hospitals seek shelter with larger ones? Why not...offer smaller hospitals value-added services to improve their prospects while preserving their independence? Can we spread our overhead by offering our high-priced skills and talent to smaller hospitals on an as-needed basis?

And in the spirit of "We're not alone. These trends affect us and our competitors more or less equally." it's important to remember that the winners are those organizations responding most flexibly and aggressively. THAT'S a forecast not open to debate.

Time to thrive. Let me know if you agree.


Popular posts from this blog

Being Disrupted Ain't Fun. Deal With It.

Articles about disrupting healthcare, particularly those analogizing, say, Tesla's example with healthcare's current state, are frequently met with a chorus of (paraphrasing here) "Irrelevant! Cars are easy, healthcare is hard." You know, patients and doctors as examples of "information asymmetry" and all that. Well, let me ask you this: assuming you drive a car with a traditional internal combustion engine, how much do you know about the metallurgy in your car's engine block? I'll bet the answer is: virtually nothing. In fact it's probably less than you know about your own body's GI tract. Yet somehow, every day, us (allegedly) ignorant people buy and drive cars without help from a cadre of experts. Most of us do so and live happily ever after (at least until the warranty expires. Warranties...another thing healthcare could learn from Tesla.) Now, us free range dummies - impatient with information asymmetry - are storming healthcar…

Becoming Consumer Friendly In Five Easy Steps...Or Not

An article at offers hospitals 5 steps to becoming more consumer friendly.

If you still think there's a secret sauce to your hospital becoming more "consumer friendly," these 5 steps are as good a place to start as any.  Unfortunately, it's a little like that old Steve Martin comedy bit where he says he'll teach you how to be rich. The first step is to go find a million dollars.

Step 1 from the article is realizing that "...a Medicare beneficiary with chronic conditions is different from a young mom who brings her kids in for an annual check-up." This is market segmentation for beginners, and, yes, one size decidedly does not fit all. I'm sure your marketing team's been saying this for a while.

Steps 2-5: have a strategy, metrics, a champion and resources. OK. Hard to argue with any of those.

But those things, alone or together, won't overcome culture. They're important components to be sure, but insufficient without a …

My Take On Anthem-Cigna, Big Dumb Companies and the Executives Who Run Them

After last Friday's Appeals Court decision, Anthem's hostile takeover of, er, merger with Cigna has but a faint pulse. Good. Unplug the respirator. Cigna's figured it out but Anthem is like that late-late horror show where the corpse refuses to die. Meanwhile, 150 McKinsey consultants are on standby for post-merger "integration" support. I guess "no deal, no paycheck..." is powerfully motivating to keep the patient alive a while longer.

In court, Anthem argued that assembling a $54 billion behemoth is a necessary precondition to sparking all manner of wondrous innovations and delivering $2.4 billion in efficiencies. The basic argument appears to be "We need to double in size to grow a brain. And just imagine all those savings translating directly into lower premiums for employers and consumers." 

Stop. Read that paragraph again. Ignore the dubious "lower premiums" argument and focus on the deal's savings.

$2.4 billion saved from a p…