What Does the Future Hold for Hospitals and Healthcare Providers? 6 Observations & Concerns

From Becker’s Hospital Review,  written by Scott Becker, JD, CPA, and Lindsey Dunn | April 08, 2013

Hospitals and health systems today are confronted by a number of challenges that could ultimately impact how they deliver care. From reduced reimbursement to increased government scrutiny and anticipated provider shortages, we anticipate the future forecast for these providers will be a cloudy one. Here are six observations on the current climate surrounding hospitals and health systems.  

1. Government debt and the need to reduce spending.
No matter how you slice it — and the sequester seems to be the most simple and obvious example of it — there is an increased recognition that the federal government must rein in its spending. Even those on the tax and spend side seem to view it as such. Through Medicare and Medicaid, the government is responsible for around 30-50 percent of the payments healthcare providers receive, and as a result, even small reductions in federal spending could amount to a lot of money coming out of healthcare.

As of April 1 when sequester cuts kicked in, healthcare providers began experiencing an across-the-board 2 percent reduction in Medicare payments, including graduate medical education funding. For this fiscal year, these cuts are estimated to total $9.9 billion.

President Obama and lawmakers are expected to work on a budget when Congress resumes to replace the $1.2 trillion in automatic spending cuts. However, providers should not expect the replacement legislation to be much more favorable to their bottom lines.
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