Ferd MitchellLooking ahead into 2014, hospitals face a variety of unknowns that may require major changes in operations.

In particular, it is likely that demands will change and new strategies will be needed in four areas: 

  • Physical facilities
  • Care networks
  • Contractual relationships
  • Economic requirements

Cheryl MitchellAs hospitals evolve from a “place” to a “system of community care,” new issues are developing with respect to where physical facilities should be located, what types of facilities should exist in each location, and how distributed facilities should be linked to one another and to the surrounding community.

Strategies must be developed to manage and economically coordinate multiple locations that complement each another and that all support the larger purpose of the “hospital system.” Management of capital funds must be balanced for this purpose.

New care networks will be required to staff the distributed facilities and meet community expectations. Issues will arise with respect to which types of providers—and which specific providers—will be best suited to each location, and how all care activities will be networked together. Caution is necessary to avoid inefficiencies due to possible overlapping care functions and increased overhead expenses due to multiple sites.

Contractual relationships with insurance companies, providers, and patients will all change as hospitals become community-oriented providers. It will be necessary to renegotiate insurance policies to accommodate distributed care networks, in revise provider contracts to redefine functions and responsibilities across sites, and ensure that patient obligations are clearly defined and accepted.

Management efforts will be needed to guide the development of appropriate contracts and to emphasize their acceptance throughout the system.

Budgeting demands will change with a community orientation. Established budgeting approaches (and software) will need to evolve to accommodate changes in facilities, networks, and contracts.

Hospital managers should get “ahead of the curve” for these changes, and not wait to recognize the needs that evolve and to implement new operational approaches under pressure.

In 2013, the retroactive fixes being attempted for the Affordable Care Act (ACA) illustrate how difficult it is to make corrections “after the fact.”

Healthcare executives would be advised to make “to do” lists for all four of the above areas (and others), and start planning and implementing new strategies before being forced to respond to pressures and becoming mired down in retroactive fixes.

Such strategies should be prepared with full recognition of the ways in which interested groups will likely react to such changes, and with accommodations included to produce the desired results even with these reactions considered. 


Ferd H. Mitchell is an attorney, Mitchell Law Office, Spokane, Wash., and a member of HFMA’s Washington-Alaska Chapter.

Cheryl Mitchell is an attorney, Mitchell Law Office, Spokane, Wash.

Read a new edition of the authors’ book Legal Practice Implications of the Affordable Care Act, Medicare and Medicaid, 2013-2014 for details how organizational reactions to the ACA may be evaluated.

Publication Date: Friday, January 03, 2014