Opportunities and Threats Facing Hospitals and Health Systems

Published by Becker’s Hospital Review

Leveraging VMG Health’s expertise as a leading provider of transaction health care valuation services, this article examines seven key issues facing Hospitals and Health Systems in 2017 and into 2018.

Shift to Outpatient Sites of Care

A higher percentage of low-acuity care is being provided in lower-cost, outpatient settings (i.e., ASCs, Urgent Care, Primary Care, etc.) This trend is primarily driven by an increase in consumer cost-sharing and improving patient navigation to relevant access points within the healthcare system.

CMS is further leading the push to outpatient facilities in an effort to reduce national healthcare expenditures and improve the overall efficiency of the U.S. healthcare environment. Additionally, many ASC and urgent care platforms are owned/operated by large corporate entities and private equity groups with better access to capital to aid in marketing efforts to steer patients to these outpatient settings, and out of the higher cost hospital setting.

Hospitals and health systems that acquire, form joint ventures with, partner with, or develop, their own outpatient infrastructure will be well suited to take advantage of this trend.

The Rise of Consumerism

Patients are increasingly taking an active role in the decision making behind their health care needs. The cost of care, quality of care, and ease of care, are crucial factors in the patient-driven decision making process.

Brand awareness is an important catalyst in driving patient volume. Larger marketing budgets result in the ability to take advantage of the consumerism trend by educating patients on portfolio of service offerings, price concerns, and quality of care offered by a hospital operator or other healthcare provider. Additionally, competition in the outpatient site of service (for example, urgent care chains), increases the need for a higher focus on marketing, and brand awareness, for hospitals and health systems.

Hospitals and health systems that allow consumers to choose among a variety of inpatient and outpatient settings and compare costs, quality, and access to physicians of different healthcare organizations will enhance the consumer experience and engage the consumer base.

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