5 Tips for Hospitals to Survive the Sequester

The federal budget is on track for a 2 percent cut to Medicare provider payments April 1, and deeper cuts are planned for the National Institutes of Health and the Centers for Disease Control and Prevention.

Sg2, a Skokie-Ill.-based healthcare consulting group, gives five ways hospitals can weather the storm of sequestration:

1. Develop and refine your revenue and cash flow models for the next five years under a variety of Medicare and commercial payment scenarios.

2. Layer on specific new scenarios related to the evolution of narrow networks, insurance exchanges and Medicaid expansion.

3. Begin the serious work of focusing on pricing strategy in your commercial insurance business. The quality of your earnings has never been more important.

4. Affirm your assumptions on what type of enterprise-wide cost reduction is going to be necessary over the next five years to mage under what will certainly be challenging times for Medicare and Medicaid.

5. Put the rest of your financial house in order — particularly your revenue cycle infrastructure and capital budget.

More Articles on Sequestration:

Senate Dems' Budget Would Repeal SGR, Restore Lost Medicare Payments
General Obligation Bonds: A Matter of Public Support
American Hospital Association: An Update of Healthcare Reform and the Political Climate

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