Take a gander at the health care crystal ball, and what's in store for hospital leaders in 2014 looks like a second dose of what they've already been swallowing the previous 12 months.
I recently spent a few minutes on the phone with Steve Messinger, managing partner of ECG Management Consultants, discussing emerging trends in the field. From what I gather, 2014 is going to be the year of sequels and continuations of recent storylines, rather than a whole bunch of new ones (although I'm sure there will be plenty of surprises).
We've seen a number of unique partnerships form, whether between competing health systems, or hospitals and health plans. Messinger says he expects hospitals and health systems to increasingly forge these types of partnerships next year as a way to gain economies of scale and larger purchasing power, without the headaches of a merger (though he does expect consolidation to continue, too).
"We are seeing more and more organizations thinking about their long-term positioning and looking at alternatives to mergers or consolidation, and trying to think about how they can accomplish scale and critical mass without having to implicate this concept of being self-governing or independent," he says.
Academic medical centers, in particular, are being forced to think differently to maintain their foothold in the marketplace. As health care futurist Ian Morrision explored in his most recent column, everything from precarious financing structures to price transparency are all putting a pinch on the academics. Messinger expects these institutions to continue searching for ways to deliver value not only to patients, but also students who are less and less willing to shoulder hundreds of thousands of dollars in unpaid tuition.
"The amount of debt that these kids are coming out of school with is unsustainable," Messinger says. "We have huge opportunities to refine the way we think about delivering and financing medical education to make it more responsive to the needs of the market and more economical."
Many hospitals are finding themselves stuck in unsustainable compensation models with their employed physicians, which are overfunded compared with the value that doctors are delivering. Leaders will need to find ways to recalibrate those arrangements in 2014, Messinger says. Some are starting to shy away from employing high-paid specialists and are, instead, bumping up their ranks of primary care physicians, and then funneling more patients to the few specialists they have to increase their productivity.
We all know the disruption that health insurance exchanges are likely going to cause to the system next year, but Messinger says that a growing number of hospitals are evaluating how they can become more "insurancelike," whether through forming a partnership with a payer or selling their own insurance product on the exchanges.
Other trends to watch, he says, include the increased consumer focus of the field, with hospitals looking to other industries for inspiration on how to improve the patient experience; continued pursuit of clinical integration to treat the health of entire populations; and aggressive cost-reduction with hospital CFOs wondering whether they cannot just break even, but make money on Medicare. All of it adds up to one big headache for hospital leaders trying to stay ahead of all the change that's going on in the field.
"Boy, hospital CEOs really have something on their hands," Messinger says. "They are trying to figure out: How do I improve my current situation, given the financial incentives, given my relationships with physicians and what's happening in the market, balanced against this concept of long-term positioning where I know the world is changing, and I'm not exactly sure what it's changing to? It's a very nervous time for folks who are in organized medicine."
What are your expectations for 2014? What do you foresee as the biggest trends that will emerge after the calendar rolls over? Share your thoughts in the comment section below.