Hospital margins appear to be stabilizing as 2023 comes to a close and health systems continue working through their turnaround strategies. As hospital margins and overall finances eke back to a healthier footing, health system leaders will be able to spend more time and resources on the growth and transformation of their organizations.
Over the next three years, healthcare leaders expect patients to become the ultimate consumer, as technology evolves to meet the evolving patient experience, access and care demands. Collaboration and partnerships between health systems will also increase as leaders strive to expand services and access to care and provide the right care to the right people when and where they need it.
"We will deliver uber-friendly technology to consumers like companies have delivered for every other part of our lives," Peter Banko, region president of Chicago-based CommonSpirit, told Becker's. "Consumers will access at their fingertips information — care processes, best practices, research, risks, benefits, costs and outcomes — to further their own understanding and ability to impact their care."
More technology and information are expected to drive different collaborative care models that are consistent and regularized, creating improved processes, hand-offs and outcomes as well as greater opportunities for self-diagnosis and self-care.
"For health systems and providers, competition will, as a result, be based less on quality, safety, affordability and value (those are now "table stakes,") and more on the ability to innovate consumer experience and system connectedness," Mr. Banko said.
Automation will become more prominent in areas such as mobile-friendly patient scheduling and check-in, triage and diagnosis of illnesses and real-time monitoring of treatment adherence, all of which will improve access, quality and efficiency for better health and business outcomes.
"Enhancements of care will drive even more care delivery to the outpatient setting leading to higher acuity inpatient care," Michael Young, president and CEO of Philadelphia-based Temple University Health System, told Becker's. "There will be fewer of us remaining systems — as ongoing reimbursement pressures, increasing labor and supply costs, and claim denial challenges make it impossible for smaller hospitals to operate, forcing more closures."
This year, 24 hospitals either closed or filed for bankruptcy as high inflation and the rising costs of labor, drugs and supplies offset revenue gains and stifled recovery efforts. Payer challenges and downward pressure on reimbursements is also a challenge for hospitals and health systems, and is not going away in 2024.
"We will continue to see margin pressure resulting from reimbursement rates not keeping pace with inflationary trends that are escalating staffing and supply chain costs," Cliff Megerian, MD, CEO of Cleveland-based University Hospitals, said. "As a result, you will see health systems optimizing their operations which may include footprint re-evaluation, increasing focus on value-based care, and greater utilization of digital technology, such as remote monitoring and telehealth services."
Health system leaders also expect to see more collaborations and partnerships — as opposed to versus brick-and-mortar acquisitions —- to expand services and increase access to care.
"Innovative thinking is critical for success, and quite frankly survival in our industry, so health systems should already be investing in growing in-house expertise dedicated to ideating new models of care, but in three years, these efforts should be producing tangible returns," Dr. Megerian said.
Hospitals and health systems that financially recover from the last three years will be compelled to reduce services and re-evaluate the scope and breadth of their current services, according to Ronda Lehman, president of Mercy Health-Lima (Ohio).
"I hope that we will see additional alignments where health systems are leveraging not just their own strengths, but also looking to other less likely partners to collaborate with. We need to continue to meet consumers where they are at, and relentlessly continue to strive to incorporate 'health' into people's everyday lives, rather than allowing barriers to obtaining care," Ms. Lehman told Becker's. "I also believe we will see greater risk-based contracting for all health systems, recognizing that this is vital for us to improve the total health of our communities."
The hospitals of tomorrow are being planned today, and the most successful health systems will be able to provide complete care and coverage.
"On the care side, that means having invested in fully integrated care, serving patients beyond acute care settings, and filling in gaps in care to make healthcare easier, more accessible and more affordable," Amy Perry. president of Phoenix-based Banner Health, said. "Coverage, or premium-based revenue, allows health systems to prioritize health outcomes and quality of life. All of this must be fueled and integrated by the smart application of emerging technology. Health systems must accelerate their ability to transform."