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Sign up for Becker's Orthopedic, Spine Business & Pain Management E-Weeklies at www.BeckersOrthopedicandSpine.com or call (800) 417-2035 7 Publisher's Letter 5 Key Trends for 2013 It has been a fascinating first half of the year in the healthcare industry. This letter briefly outlines what we think are five of the biggest issues facing hospitals and healthcare systems, surgery centers and physician practices this year. 1. High-Deductible Health Plans. The shifting focus to high deductible insurance plans by private employers is likely to seriously impact healthcare provider margins. As implementation of the Accountable Care Act begins, it is becoming clear that many employers will begin to move towards high-deductible health plans to keep their insurance costs down and avoid the so-called Cadillac tax, which imposes fees on employers who offer their employees high-end health plans. In fact, the New York Times reported on May 27, 2013 that in the last couple of years there has been a 6 percent jump in employers changing their plans due to the impending Cadillac tax. Moreover, it appears that many employers are considering or switching to high-deductible health plans. High-deductible health plans are likely to impact the healthcare industry by slowing consumer use of healthcare resources. While consumers do not yet have the tools or transparency to begin price shopping for their health services in the immediate future, high-deductible health plans will likely lead to more caution in consumer spending over time. For a great synopsis of the impact of highdeductible plans on spending, see "High Deductible Health Plan Study: Five Takeaways," California Healthcare Foundation. 2. Healthcare Exchanges. The development of healthcare exchanges is moving more slowly than expected. However, this slower pace in becoming operational may be good news for providers, as the healthcare exchanges will likely pay providers at lower rates for their services. Thus, the predicted migration of business from commercial payers to healthcare exchanges is an issue of great concern to providers. For additional information on healthcare exchanges, please see "Health Insurance – Exchanges Clarity Needed to Gauge Impact," Fitch Ratings in which Fitch Ratings notes that hospitals are likely to be paid lower amounts under healthcare exchanges than they receive from commercial insurance. 3. Healthcare Consolidation. While a number of independent hospitals remain steadfast in retaining their independence, we continue to see independent hospitals entering into discussions regarding mergers and affiliations with larger partners. Many hospitals remain very concerned about their ability to stay independent long-term in a changing environment where future reimbursement is uncertain. However, independent hospitals that can (1) be dominant in their independent market, (2) be operated in a very lean way, and/or (3) excel in a specific area may be able to stay independent for a long time. For a different view of healthcare consolidation, please see "Healthcare Consolidation May Bend to Cost Curve the Wrong Way," by Mitchell Brooks, March 16, 2012 at KevinMD.com. 4. Surgery Centers Remain a Good Business. There continues to be erosion of two key factors that comprise and drive revenue for surgery centers. Specifically, there continues to be a decline in physician cases and reimbursement rates. Essentially, there are a limited number of independent physicians available to invest in ASCs and reimbursement for surgery centers is not improving. In contrast, one positive development for surgery centers is that independent YOU CANNOT AFFORD TO LOSE MORE REVENUE! Call the Expert in Revenue Optimization Billing | Coding Coding Reviews Managed Care Contracting Revenue Cycle Audits Fee Schedule Analysis Providing Custom Solutions Experts in Customized Revenue Optimization www.smpsd.com | 605.444.8207 | info@smpsd.com