1. An Economic Perspective
Health Policy Issues
An Economic Perspective
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2. The Future Role of Hospitals
Chapter 16
The Future Role of Hospitals
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3. LEARNING OUTCOME
Examine the changing role of the hospital and developments affecting the hospital’s future role in the delivery of medical services
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4. Lecture From Medicare to the Present
Exhibit 16.1
Exhibit 16.2
Exhibit 16.3
Hospital Costs: The Public and Private Sectors
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5. Lecture (Continued) Hospital Revenues Hospital Utilization
Hospital Payment
Exhibit 16.4
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6. Lecture (Continued) The Current Hospital Outlook
Hospital Consolidation
Expansion of Medicaid and Enrollment on State Health Insurance Exchanges
Changing Payment Systems
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7. Lecture (continued) Hospital Strategies Status Quo Scenario
A New Role For Hospitals
continue to discussion
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8. US Community Hospital Capacity and Utilization, 1975–2012
Exhibit 16.1
US Community Hospital Capacity and Utilization, 1975–2012
return to lecture
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9. Exhibit 16.2
Aggregate Total Margins and Operating Margins for US Hospitals, 1980–2012
return to lecture
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10. Exhibit 16.3
Annual Rate of Increase in Hospital Expenditures, Actual and Trend, GDP Price Deflated, 1961–2012
return to lecture
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11. Sources of Hospital Revenues, by Payer, Selected Years,
Exhibit 16.4
Sources of Hospital Revenues, by Payer, Selected Years,
1965–2012
return to lecture
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12. Discussion
What is the outlook for hospital cost increases? What are the likely economic assumptions hospitals should consider in developing their future strategies?
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13. Summary
Managed care and Medicare DRG payment greatly reduced hospital utilization, created excess capacity, and weakened hospitals’ bargaining power with insurers. Over time, hospital capacity decreased, mergers occurred, managed care broadened its provider networks; hospitals consolidated and raised prices and profitability.
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14. Summary (Continued) The future presents threats and opportunities:
Technological developments have enabled a greater number of complex procedures to be performed in an outpatient setting.
Payment systems have given incentives for performing more services in outpatient settings.
Over time, the ACA will lower hospital rates for Medicare patients.
Growing reliance on government payment is likely to result in a lower growth rate in hospital expenditures.
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15. Summary (continued)
As the number of publicly insured increases, hospital competition for a diminishing pool of privately insured patients will intensify. Changes in payment systems offer the potential for greater revenues, but will also result in disruptive innovations in the delivery of medical services; many hospitals will experience difficulty adjusting.
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16. Summary (continued)
Huge financial rewards are available to those who are able to cut costs while improving patient outcomes and satisfaction. The future of hospitals will be determined by how well they are able to work with physicians and deliver coordinated care while reducing rising medical costs and improving patient outcomes.
Copyright © 2015 Foundation of the American College of Healthcare Executives. Not for sale.