GHX, a healthcare technology and services company, predicts that the healthcare market will undergo major change in 2012 that will bring it closer to “long-term sustainable health.”
In a press release, GHX listed the top five trends it sees in the healthcare marketplace in 2012, including:
- Increased provider consolidation
- A "re-pricing" as healthcare delivery organizations move into the requirements of healthcare reform
- The centralization of hospital supply chains to maximize efficiency
- Increased focus on quality in order to achieve cost reduction
- Examination of ways to increase trust, a current inhibitor of healthcare market transformation, by both providers and suppliers
"Healthcare is a complex industry and changing the way business is done to ensure the viability and success of the hospitals and medical suppliers is a daunting challenge," said Bruce Johnson, president and CEO of GHX, in the press release. "Never before has the industry been on the brink of such change, planning for the bold moves needed to achieve long-term fiscal health so it can continue delivering high-quality care and products to patients.”
The first trend, consolidation, GHX says, will enable single, although larger, organizations to deliver a broader range of care in more locations, from the doctor's office, to the operating room, to the retail clinic and even to the patient's home or place of work. GHX says that some industry analysts predict the number of independent organizations could decrease by two-thirds over the next 10 years. And telemedicine will make remote care more feasible in under-served parts of the world.
GHX’s second prediction is thathospitals are now going to have to survive on what Medicare, which currently only covers about 87 percent of the actual cost of care and is declining, pays them under healthcare reform. How does a 20-to-30 percent reduction in the average hospital’s cost structure sound? That’s what many experts and industry analysts predict the overall impact of healthcare reform will usher in.
Healthcare facilities are also incurring great expense to “install and demonstrate meaningful use of electronic health records (EHRs),” according to the press release. The federal government has promised to reward those who achieve meaningful use within specific timeframes, but many experts say it’s highly unlikely the bonuses will come anywhere close to the real cost of implementation. And those who don’t move to EHRs in time will be penalized.
Thirdly, GHX says, hospitals will focus on ways to reduce direct and indirect costs — “like error-ridden manual processes, discrepant data, logistics and inventory carrying costs” – not just by paying less for products. The supply chain represents the second largest and fastest growing operating expense for most hospitals, GHX says.
According to the GHX press release, Gartner Research said, “The supply chain represents 40-to-45 percent of hospital or healthcare system operating expense and these organizations can reduce those costs by five to fifteen percent if they better analyze, plan and control the purchase and use of goods and services.”
The fourth trend 4 GHX sees in 2012 is a focus on quality while at the same time reducing costs, all of which can be achieved, says GHX, through “better operational performance.” But don’t forget: quality patient care can also serve to reduce costs. GHX quotes Dale Locklair, vice president Supply Chain and Construction, McLeod Health, "When I focus on quality, I can reduce costs. The reverse is not necessarily true."
Sad but true, research has found that the quality of care delivered in regions of the U.S. where healthcare spending is higher per capita is not necessarily better. GHX suggests that healthcare providers need data on what treatments work best and at what financial cost in order to improve bottom lines.
Finally, GHX said, “A lack of trust between hospitals and suppliers has historically hampered the industry's ability to lower the cost of doing business and, in turn, the cost of healthcare.” But both hospitals and suppliers are actually on the same side: “having more difficulty growing revenue.”
With today’s lower reimbursements a challenge, hospitals can’t pay more for products, “unless they can be proven to lower hospital-acquired infections, readmissions and other factors influencing reimbursement levels.” All healthcare providers and suppliers will need to work together to meet the bumpy road of the future in medicine, concludes GHX.
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Deborah DiSesa Hirsch is an award-winning health and technology writer who has worked for newspapers, magazines and IBM in her 20-year career. To read more of her articles, please visit her columnist page.Edited by
Rich Steeves
