Ernst & Young has released its 2007 outlook for the U.S. healthcare provider sector. It is necessary for doctors and hospitals to reexamine their business model to deal with growing problems in the healthcare industry, notes E&Y. These are likely to be the major trends for the coming year:
- Cost Recovery: In 2007, expect hospitals to spend more time examining the funding problems created by higher uninsurance rates and lower Medicare and Medicaid reimbursement rates.
- Health IT: The federal government will use legislation to push the healthcare sector--which lags in technology adoption--to further invest in health IT initiatives.
- Transparency: During 2006, employers, managed care plans, trade groups, state governments and federal agencies took a new and aggressive role in bringing pricing and outcomes data to the public, in many cases by posting aggregate hospital and physician data to publicly-accessible websites. Expect the transparency trend to continue into 2007.
- Staffing Challenges: An aging population will place more stress on hospitals than ever before. Issues of cost and how to efficiently increase staff according to demand will receive much more attention from healthcare administrators in 2007.
- Pay for Performance: In the interest of improving quality and reducing costs, healthcare payors, including Medicare, are looking to entice doctors and hospitals based on quality and safety performance.
- Tax-Exempt Status: In 2006 hospitals took a beating on the issue of charity care, and in 2007, not-for-profit hospitals will continue to face a growing burden to demonstrate their value to the community.
- Private Equity (PE) Investment in Healthcare: PE funds--having noticed the opportunity for profit in the healthcare sector--may raise the bar for the competition among health systems.
For more:
- check out this press release