What is the business outlook for healthcare in 2007? Three words: consumerism, consumerism, consumerism.
After years of turmoil emanating out of Washington for hospitals, the situation has become eerily quiet, relatively speaking. Although health issues were high on the priority list for Democrats during their successful campaign last year, no one is expecting any seismic changes for healthcare out of the nations capital.
As a result, 2007 may be a good year for hospitals to look inward and prepare for the consumer revolution going on around them.
Commonwealth Fund President Karen Davis says she expects Democrats will make efforts to modify several prominent healthcare programs such as the Medicare prescription drug plan. Democrats might start off the year trying to change the law to allow the government to negotiate prescription drug prices, but getting the presidents signature is a big question, she says. There also could be efforts to expand the State Childrens Health Insurance Program, which comes up for reauthorization this year, and to fund information technology.
Short of legislation though, the rise of consumerism, including the push for pricing transparency, quality measures and pay-for-performance programs are only going to intensify. This interest in information has a lot of broad-based public support, but a lot of people believe it will help to improve care, so I think that will continue, Davis says. Ultimately, she predicts, payment reform will move to an even more global plane, with hospitals receiving reimbursement for episodes of care rather than mere hospital stays. Payers will be scrutinizing re-admission rates and post-acute services, requiring hospitals to align with other providers.
I think the election in general was good for healthcare, Davis says. The newfound attention to consumers also means more attention to the people who provide healthcare, she says.
Still, that doesnt necessarily translate to a glowingly optimistic business outlook for hospitals. While the federal government might have its attention focused elsewhere, state and local governments are putting healthcare at the top of their agendas, grappling with ways to provide universal healthcare even as resources diminish.
We actually think it is going to be a very difficult year ahead because there are a number of financial impacts that were expecting, says Gail Donovan, executive vice president and chief operating officer at four-hospital Continuum Health Partners in New York. Although the situation is perhaps more intensified in New York than in the rest of the country, Continuum is anticipating a very tight state budget year with targeted cuts in Medicaid. At the same time, New York hospitals are anxiously anticipating the implementation of a sweeping series of recommendations that carry the weight of law for restructuring the states outmoded hospital system. Next door in New Jersey, an advisory commission was formed at year-end to analyze the condition of the states hospital system, a precursor, perhaps, to New Yorks reform-minded Commission on Health Care Facilities in the 21st Century.
Preparing for the onslaught of consumerism under the watchful eye of state and local government officials could be a predominant theme for 2007. The following is a look by Modern Healthcares editorial staff at some of the significant trends to watch as we enter the new year.