Becker's Hospital Review

8 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 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 physicians in key specialties such as orthopedics, gastroenterology and ophthalmology are not becoming employed by hospitals as quickly as originally expected or as quickly as other specialists. However, there are not as many new specialists today establishing large independent practices as there have been over the last 20 years. Furthermore, in many areas the surgery center market is relatively saturated and there are a limited number of independent physicians available to be owners in third-party ventures or buy in to surgery centers because a large number of independent physicians already have ownership interests in other centers or are employed by a health system which prevents them from becoming owners in third-party ventures. Surgery centers are also facing the same reimbursement challenges that hospitals and health systems are facing, including the movement toward high-deductible health plans and healthcare exchanges.     declines over time due to changes in Medicare and the development of healthcare exchanges and high-deductible health plans. 5. Independent practices and physician trends. Many independent physician practices, like independent hospitals, seem intent on remaining independent. However, practices seem to gravitate quickly toward hospital employment when their professional income decreases by even relatively small amounts. That stated, if an independent practice wishes to remain independent, it needs to: 1) have such a dominant position in its marketplace that is hard for payers to build a network without it, 2) be run very lean as to be able to survive with the unknown changes and reductions in reimbursement, and/or 3) be so extraordinary in a specific area, i.e., so great at its core specialty or by reputation, that it stands out in terms of patient need or payer need. Physician practices are also facing challenges with respect to specialist recruitment, as there remain shortages and surpluses of specialists depending on the market — some markets still have far more specialists than needed. In addition, it will be fascinating to see whether hospital-employed specialists' compensation continues to remain at the lofty levels it is now in the future, or whether hospitals will reduce employed specialists' compensation as reimbursement for hospital services To learn more or register for the event, visit: http://www.beckershospitalreview.com/beckers-hospital-review-ceo-strategy-roundtable-2013.html. How Much Should We Expect Healthcare to Mimic Other Industries? (continued from page 1) These analogies hold weight, but only to a point. As maddening as it may be to frame healthcare as an industry unique from all others, there are some dynamics that make this valid. Healthcare is essentially the one service that, when withheld or denied, could potentially result in death. That may be the largest differentiator of any. Yet despite such inherent idiosyncrasies, healthcare is not exempt from consumers' expectations, which are two-sided. Consumers either want healthcare to behave more like other industries or remain immune from other industrial norms and trends. In many ways, hospitals are being pulled in two different directions. Like any retail experience, patients want to know the price tag of their treatments before they get a bill in the mail. They also want to eat tasty food and have a satisfactory hospital stay — something they may soon evaluate with star-ratings, CEO Strategy Roundtable – Nov. 14, 2013 The Becker's Hospital Review CEO Strategy Roundtable will take place Thursday, Nov. 14, 2013 in Chicago at the Ritz Carlton Hotel at Water Tower Place. The day-long event features three tracks, 23 sessions, 50 speakers and 24 hospital and health system CEOs as speakers. Sample sessions include: • ow to Assess Strategy in a Changing World: Thinking 5 Months and H 5 Years Into the Future • ACOs: Current Trends and Issues • Creating an ACO for Your Own Employees • ospital Leadership: What Are the Biggest Opportunities for and H Threats to Hospitals? • he Road to Population Health: Key Enablers in Implementing ValT ue-Based Approaches Should you have any questions or if I can be of help in any manner, please do not hesitate to contact me at sbecker@beckershealthcare.com. I can also be reached at (800) 417-2035. Very truly yours, Scott Becker just as they would hotels. But there are also norms from other industries that don't hold up in healthcare, such as the ease with which nonprofit hospitals can discuss profits. Here are five ways healthcare differs from other industries and why, along with commentary from healthcare experts on how each distinction may take shape in the years to come. "Profitability" is a dirty word in healthcare There is a considerable amount of sensitivity surrounding business concepts in healthcare. Most physicians resist the idea of calling patients "consumers," where many other businesses pride themselves on mastering customer service. Although billing and collections is a business necessity, hospitals have been reluctant about their practices, as aggressive collections can result in public outcry and regulatory violations. Conversations grow especially contentious when profits come up, particularly those of nonprofit hospitals and health systems. Nonprofit healthcare has long been centered around altruistic principles, such as charity care and charitable missions. These values are predominant in healthcare, as approximately 60 percent of U.S. hospitals are nonprofit and about 15 percent are for-profit, the remainder being government-owned or public. Due to this composition, there is considerable reluctance around the idea of nonprofit hospitals profiting from patients and tax exemptions. Healthcare is unique in this way, as qualms about discussing company costs, profits and revenue aren't prevalent in many other industries. "In general, most service-based industries are based on a solid business model where you are looking for a hefty return for your service," says J.V. Maganti, president and CEO of Guava Group, a management consulting firm in Chicago. "However, in healthcare, the majority of providers are nonprofit and have traditionally been dependent on tax breaks from federal, state and local governments, as well as other charitable contributions and grants."

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