US Healthcare Reform – The Great Unknown

The much ballyhooed healthcare reform has the potential to affect the way hospitals are built and developed.  Hospital administrators want to anticipate healthcare trends and build accordingly, but trends are difficult to anticipate in a changing political climate.

A cursory review of recent newspaper and journal articles on the topic reveals uncertainty and hesitation on the part of hospitals. If the healthcare reform proceeds as intended, more Americans should become insured, leading to more revenue for the hospitals. At the same time, the reforms will lower Medicare and Medicaid reimbursements, leading to reduced healthcare revenue.

Unemployment rates in the U.S. are currently high, at almost 10 percent.  The healthcare reform demands that everyone be insured.  But those without employer contributions to their insurance packages are likely to purchase insurance plans with very low hospital reimbursement rates.

Adding to the confusion, experts predict a shortage of primary care doctors within the next fifteen years.  Hospitals may find themselves unable to provide needed services because they cannot find doctors to hire.

Furthermore, now that the Republicans have taken control of the House of Representatives, the planned healthcare reforms are likely to undergo adjustments, or even become repealed.  Given the political climate, hospital planners struggle to anticipate healthcare trends within the next five years.

How, then, can hospital CEOs prepare their facilities for the future?

One forecast that will hold true is the demise of physician specialty practices.  I predict that physician payments by insurers will drop to the point that doctors will not be able to maintain financially viable practices.  They will instead turn to hospitals and ask to have their practices linked to, and housed by, the hospitals.  Hospital planners should grow their hospitals with enough flexibility to incorporate physician specialty practices.

Another transformation will be the continued growth of ambulatory procedures.  As overall reimbursements diminish and inpatient care costs increases, providers will be forced to provide even more care on an outpatient basis.  Healthcare has been trending in this direction for the past decade.  What we will see is a drastic effort to change the standards of care so as to allow for further “de-hospitalization” of patients and procedures.

To conclude on a positive note, I foresee an increase in preventive care and “health management” as a proactive means of avoiding the higher costs of “disease management.”  This will include the integration of eastern medicine and holistic practices into the prevention and treatment of diseases.  When designing The Hollings Cancer Center and The Princess Margaret Cancer Center over 10 years ago, we successfully introduced these concepts into the design.  They provide peaceful environments and validate the practice of “Healthy mind, healthy body.”

So what’s a CEO to do?  Build in flexibility, now more than ever, and allow your program to change as your hospital reacts to the changing marketplace.  This isn’t as difficult as it sounds.  The near-term flexibility is in low-tech patient areas, not the changes in high-tech diagnostics and surgical zones that we saw over the past two decades.  This next period of healthcare change, although less predictable, will be far less expensive.  That’s a good thing, since hospitals will have a lot less to spend on their capital projects.

This entry was posted in General and tagged , , . Bookmark the permalink.