tPF Points Hospitals in the Right Direction

Hospitals in the U.S. are aggressively seeking new sources of revenue because their traditional sources of revenue are drying up.  There are a number of potential solutions to the pervasive revenue problem, and tPF is positioned to help hospitals arrive at the right one.  We have developed a readiness assessment tool that will explore the possibilities, including:
  • expand the hospital's service area to increase the size of the pool and dilute risk
  • recruit steering physicians away from nearby, competing hospitals
  • establish partnerships with other hospitals and insurance companies.
Unfortunately, the "do nothing right now" approach doesn't mean things will stay the same.  In fact, chances are good that the do nothing approach will make things worse since even a minimal approach might include some preservation/defensive measures.  For example, if hospital B comes into your hospital's service area and acquires those physicians that normally refer patients to your hospital, your hospital will lose that volume and your problems will intensify.  So in this case, a defensive strategy to retain referring physicians would unquestionably be a prudent move

In addition, healthcare consumption rates are declining due to utilization constraints integrated into commercial insurance plans.  For instance, if your hospital handles a population of 10,000, that population might have consumed 5,000 hospital days in 2001.  If that population remained static in terms of demographic profile, that same population would not consume 5,000 days in 2010.  Too many changes have occurred to drive down the length of stay and admission rates.  As a result, patients (at least those covered under commercial insurance plans) are staying in the hospital for shorter periods of time and some of their hospitalizations have been eliminated altogether by moving them to less expensive settings.

Interestingly, the government's inability to run a business in a prudent manner has actually helped your hospital.  So while the U.S. population continues to get older and transition into Medicare coverage, a greater percentage of the population is included in a program that has done very little to control access and utilization (something the commercial insurance plans started attacking in the '80s).

Returning to the earlier example, if healthcare reform succeeds in bringing access/utilization control provisions into Medicare, that would mean the 10,000 population served by your hospital would see a decline in utilization rates even though your patient population continues to age, which would normally lead to higher consumption of services.  When that happens, the population of 10,000 is no longer sufficient to generate the same consumption of units – i.e., hospital days – as it would if it were not managed.  This hospital then needs to reach out to a larger population to maintain its volume, or figure out a way to cut expenses while hitting aggressive quality targets.

There is no single solution for every hospital.  For most hospitals, the correct approach is a combination of the defensive measures (i.e., retaining the steering physicians currently in place), offensive action (going after steering physicians who are supporting competing hospitals) and developing partnerships with other hospitals and insurance companies.

Don't worry, we make it painless.  We have a readiness assessment tool that we will use in your setting to quickly determine the best direction for your organization.  tPF is ready to help you take action -- NOW.

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