A recent report from consulting firm Kaufman Hall found hospital inpatient admissions declined heavily from 2010 to 2012, but how should hospitals react?
Kaufman Hall outlined four key discussion items hospitals and health systems must consider if they want to adapt to the new healthcare model.
1. Rightsizing the business. Hospitals know the inpatient business is going down while the outpatient side is trending up. Now is the time for executives to truthfully ask themselves what they expect their inpatient and outpatient figures to look like, and what inpatient volumes within service lines are needed to maintain both quality and financial viability. Kaufman Hall recommended hospital leaders avoid adding new hospital beds, invest in ambulatory settings and hold serious discussions about whether certain services and facilities should be merged or closed.
2. Re-engineering care delivery. Successful hospitals and health systems will combat the admissions decline by helping physicians rethink and reshape care delivery under value-based contracts. These contracts include penalties for unnecessary utilization, encouragement of evidence-based medicine and use of analytics to track goals and trends.
3. Achieving operating sustainability. Hospital executives must consider this: How can the hospital's cost curve be kept below the revenue curve at all times going forward, especially as fee-for-service becomes less emphasized? Aggressive and bold cost structures will help leaders answer that question. For example, hospitals must know what their costs should be to maintain profitability if their inpatient volumes dropped 24 percent in a year, as Kaufman Hall projected for Chicago-area hospitals.
4. Transformative clinical and management teams. Population health management and value-based arrangements are the mantras of today and tomorrow. Consequently, hospital executives must ensure their clinical and administrative leaders have the right skill sets and competencies to carry out the new mission.
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