Becker's Hospital Review

7 1. The existing slowdown in growth of healthcare inflation and spending is largely due to the slow growth of the u.s. economy. CMS recently released a report, which found that in 2012, national health spending growth remained slow for the fourth consecutive year. According to the report, which was published in Health Affairs, national health spending in 2012 increased by 3.7 percent to $2.8 trillion, compared with a 3.6 percent increase to $2.7 trillion in 2011. Since 2009, annual growth in national health spending has remained between 3.6 percent and 3.8 percent, which is lower than years prior. In 2007, for example, the annual growth rate for healthcare came in at 7.6 percent. Spending growth in 2012, compared to 2011, was just 0.4 percentage points higher, which represents the lowest rate increase since 1960. Despite the White House's attempts to tie the slowdown to the Patient Protection and Affordable Care Act, CMS analysts found the law had little effect on growth rates. Instead, the authors argue the growth reflects the reverberating effects of the economic woes that began in 2008. According to the CMS report: "This pattern [of slowing growth] is consistent with historical experience when health spending as a share of GDP often stabilizes approximately two to three years after the end of a recession and then increases when the economy significantly improves. Recently, however, the question has arisen about whether a more fundamental change is occurring within the health sector and whether this stability will endure. From our perspective, more historical evidence is needed before concluding that we have observed a structural break in the historical relationship between the health sector and the overall economy." 2. Healthcare inflation will continue to experience lower-than- usual growth due to the increased use of high-deductible health plans and the migration toward lower-paying payers. When dollars are tight, such is the case during an economic downturn, consumers are un- surprisingly hesitant to spend money on elective healthcare. This hesitancy is compounded by the fact that consumers are taking on more financial re- sponsibility for their health coverage — a trend that is expected to increase. A study by the National Business Group on Health found more than one in five U.S. employers (22 percent) plan to offer only HDHPs to their employees in 2013 as a way to rein in the costs of providing health coverage. This year, these plans have a minimum deductible of $1,250, though many employers opt for higher deductibles in their benefit plan design. In 2012, for example, 14 percent of U.S. workers had health plans with a deductible of $2,000 or more, according to the Kaiser Family Foundation. When patients feel the costs of healthcare directly, they consume services more cautiously. They also begin to demand more information on cost and quality to help them make more informed purchasing decisions. Addition- ally, when healthcare spending is scrutinized by patients, providers are less likely to increase prices — which will likely play a role in what we expect will be a sustained leveling off of healthcare inflation growth. Additionally, the introduction of health plans purchased through exchanges is expected to shift more beneficiaries into lower-paying plans. As expected, many new marketplace plans' reimbursement rates are significantly lower than traditional employer-sponsored plans. If more Americans use these marketplaces to find coverage, as is expected, an increasing number of healthcare services will be paid at lower reimbursement rates. While this cer- tainly will create major challenges for providers, the net result will be lower spending growth. 3. Health systems' acquisition of smaller hospitals, the merger of chains and practice acquisitions will slow down somewhat Publisher's Letter 8 Thoughts on the State of Healthcare; 2014 Annual Meeting Our Hospital-Physician Joint Ventures: Often Copied, Never Duplicated. The advantages are plentiful . So are the pit falls. W hich means you need skilled hands as well as industry expertise to make your joint venture surgery center work. ASCOA provides leadership f rom MDs as well as MB As and was founded by three surgeons. No other company has the breadth of clinical and business experience. Learn today about the joint venture model everyone else emulates and the specif ic things to consider before embarking on a hospital-physician surgery center. Visit ascoa .com and get results no one else can match. ASCOA.COM 866-98ASCOA AMBULATORY SURGICAL CENTERS of AMERICA SM

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