Chicago - December 1, 2006 – Consumer-focused health system changes and a rapidly evolving competitive landscape emerged as key themes among the topics that are front-of-mind for healthcare finance leaders for the coming year, according to the Healthcare Financial Management Association’s (HFMA’s) Healthcare Finance Outlook 2007. The report compiles findings of HFMA research and expert commentary on critical healthcare issues for the coming year, as identified by healthcare financial professionals.
In October 2006, HFMA surveyed nearly 2,000 members largely made up of healthcare providers as well as some payers and consultants on what healthcare issues were most critical to them. The survey results showed that revenue cycle improvement and cost containment continue to be top priorities. Issues involving consumer-focused practices, payment trend, and business development also scored high (see highlights below).
“Strategic planning is one area where a leader’s courage is truly tested,” Richard L. Clarke, DHA, FHFMA, HFMA President and CEO, said. “Healthcare Finance Outlook 2007 is designed to help financial leaders understand and prepare for the forces that are shaping the world, from payment trends to the competitive business environment, so that leaders can build a strong bridge between the business side and the human side of health care.”
Healthcare Finance Outlook 2007 Highlights:
- Revenue cycle improvement will continue to be the primary focus of healthcare finance leaders.
- As patient copays and deductibles continue to rise, hospitals face an unprecedented level of credit risk. Payment prediction methods that do not rely on patient-provided information will be a priority area of development for CFOs.
- Embracing consumerism is a business imperative. A broad philosophy of earning patients’ trust can provide a unified framework for the changes that healthcare providers must make.
- The jury is out on the penetration and effectiveness of HSAs and HDHPs, but several constants are emerging:
- The shift of more costs to patients will increase
- Simplified, rational charge systems and transparent pricing has become a nationwide imperative for healthcare providers
- The reporting of quality information must be developed in tandem with price transparency. Quality improvement and reporting are integral to trust, service-purchasing decisions, and reimbursement incentives.
- Payment trends
- Hospitals are preparing for a tougher round of payer contract negotiations as payers consolidate and build bargaining clout.
- In addition to payment rates, topics on the bargaining table will include changes that will allow hospitals to simplify their charge systems and elimination of nondisclosure clauses to facilitate price transparency
- Pay-for-performance initiatives will increase as stakeholders throughout the healthcare system strive to maximize the value of their healthcare dollars as well as eliminate economic disincentives for quality care. We’ll continue to see rapid evolution of quality indicators and reporting mechanisms, despite debate about which care standards to use and how to measure them.
- Competitive environment:
- Starting in 2007, Medicare will start to equalize rates for services provided by hospital outpatient departments and ambulatory surgery centers, significantly changing the competitive landscape for outpatient services. Hospitals will need to vigorously research and assess their outpatient business lines to ensure they can compete.
- Competition between hospitals and physicians will continue to intensify as physicians seek to compensate for ongoing pressure on Medicare payments.
- Conversely, the OIG’s approval of 8 gainsharing arrangements will lead more hospitals to explore carefully crafted gainsharing arrangements that align hospital and physician incentives to improve care and reduce costs while complying with antikickback rules.
To view the full report, go to www.hfma.org.hfo. For more information, contact David Opon, Strategic Communications Manager at dopon@hfma.org.
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About HFMA
HFMA is the nation's leading membership organization for more than 35,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms and insurance companies. Members’ positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant and consultant. HFMA offers members ideas that work, including professional development opportunities, information on key issues, and technical data and networking opportunities, with the ultimate goal of creating a more supportive business environment for members. For more information, visit the Association’s website at www.hfma.org.