Here are five report findings.
1. Lower acuity admissions. Acute care hospitals with facilities in rural and smaller suburban markets will continue to see poor results mimicking those of the second quarter of 2016. However, more hospital systems may begin investing in their outpatient capabilities as they consider long-term growth. For example, Dallas-based Tenet Healthcare has greatly expanded its outpatient presence in recent years to adjust to the overall shift in the industry. It acquired Chicago-based United Surgical Partners earlier this year.
2. Health insurance consolidation. Fitch argued payer consolidation is not likely to have a blanket affect on U.S. healthcare markets because rate negotiations are highly regional. Insurer consolidation in the marketplace may even prove to be beneficial as competitive public insurance markets begin to support less and less uninsured patients due to ACA reforms, which will increase cash flow in the long-term.
3. Medicare reimbursement programs. According to Fitch, Medicare bundling initiatives will be much more lucrative for post-acute care providers long-term by providing better provider relationships and referral sources. “Initiatives like the Comprehensive Care for Joint Replacement (CJR) model will differentiate post-acute care providers by how well they reduce financial risk for acute care hospitals under bundled payments,” said Megan Neuburger, managing director of U.S. Corporates. “The wheat will separate from the chaff along the lines of which PACs have the best physician and referral relationships in place.”
4. Generic drug pricing. The generic pharmaceuticals market will remain highly competitive, given the number of new suppliers entering the market to accommodate abbreviated new drug applications, according to Fitch.
5. The opioid addiction epidemic. Efforts to reduce opioid addiction have altered the way opioids are manufactured, marketed and prescribed. According to Fitch, pricing has proved to be an effective tool in obtaining market share. Specialty pharmaceutical companies will feel competitive and regulatory pressures to make strategic deals and pharmaceutical development important components of their company strategy going forward.
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