Becker's Hospital Review

8 in 2014 as systems look to refine their existing operations. 2013 was marked by a great deal of merger and acquisition activity in the sector. Within the for-profit space, Dallas-based Tenet Healthcare Corp. acquired Nashville, Tenn.-based Vanguard Health Systems, and Community Health Systems announced the acquisition of Health Management Associates in Na- ples, Fla. On the nonprofit side, Livonia, Mich.-based Trinity Health merged with Catholic Health East in Newtown Square, Pa. to create the third largest Catholic system in the country. Baylor Health Care System in Dallas merged with Scott & White Health in Temple to form the largest nonprofit system in Texas; and Mount Sinai Medical Center and Continuum Health Partners came together, forming the largest private health system in New York City. In 2014, however, we expect some slowing of true transaction activity as health systems acutely focus on lowering costs and improving quality in preparation for new payment models and the proliferation of consumer- driven healthcare. Health systems that do acquire or merge will be even more selective about which organizations they bring into their fold. Others will enter into nonownership collaborative agreements to achieve economies of scale while protecting governance. 4. Hospitals will again need to retarget their efforts away from an "everything for everyone" mentality and instead focus efforts on the core areas and partnerships that drive profitability. Many hospitals are struggling to keep up with their objective of "being everything to everyone." Due to reimbursement and other pressures, hospitals will need to identify their strongest service lines or other strengths and align strategy around growing these services. Among regional systems, 2014's focus on im- proving operational efficiency could mean a restructuring of services (for example, consolidating cardiovascular services to two of four hospitals). 5. there will be a great deal more small hospital bankruptcies, and a few decent-sized system bankruptcies, in 2014. Hospitals and small systems that struggle with their financial situations may look to bankruptcy protection as a solution to their ongoing financial woes this year. Reimbursement pressures are expected only to increase throughout the year, and hospitals looking for partners to improve their situations will find their pool of potential partners pickier than ever, and with more suitors knocking at their doors. 6. there will continue to be a huge shortfall of it talent needed to help healthcare organizations manage their operations, opti- mize EHRs and make use of big data. In 2014, healthcare organiza- tion's IT staff will be forced to deal with a number of competing priorities: preparing the organization for ICD-10, continued work toward meaning- ful use requirements and implementing IT tools required for risk-based payment and population health management. At a time when hospitals need more IT talent than ever, they're more challenged than ever to find the workers they need. A 2013 survey by the Society of Actuaries found a vast majority (84 percent) of all respondents, and 79 percent of provider respondents, report difficulty finding employees with training in advanced data analytics. Additionally, one-third of healthcare provider organizations say they have placed a major IT project on hold due to a lack of qualified IT workers on staff, according Healthcare Information Management Systems Society survey. Organizations may need to prioritize IT recruiting, or set aside funds for significant outsourced work, to be able to complete their planned IT projects for the year. 7. while urgent care profitability will decrease as payers get tougher on reimbursement, there will be continued proliferation of urgent care as consumers seek convenient care. Consumers, increasingly, will seek providers that offer convenient access to care. Retail health and urgent care facilities have made finding same-day care easier than ever, and many physician groups have expanded hours into the evening and weekend in response. A survey by health website Vitals found that adults un- der 30 are now more likely to seek care at an urgent care facility than through a primary care provider. Roughly 60 percent of all urgent care centers have a wait time of less than 15 minutes to see a physician or mid-level provider, and 65 percent have a physician on-site at all times. Hospitals and health systems that do not yet have an urgent care strategy will need to consider taking steps to "win" some of this market in 2014. Worth noting, the urgent care center market is highly fragmented. Most operators own fewer than three centers and don't have a dominant market presence, according to HealthCare Appraisers, making the market ripe for consolidation. 8. overall, growth in the ambulatory surgery sector will slow. Growth in overall centers and in same-store growth has greatly slowed over the past few years. Here, the slowdown in growth is due to reductions in available centers and decreases in reimbursement. While ASCs and chains will continue to attempt to improve centers through recruiting physicians, adding higher-acuity cases and managing supply expenses, profit growth will be somewhat tepid. ASC chains will keep looking at other avenues to raise revenues and increase profits (e.g., more work with hospital systems and of- fering or adding other types of services). 2014 Annual Meeting – Register today! Registration is now open for the 5th Annual Becker's Hospital Review Meeting, which will take place on May 15-17, 2014, at the Swissôtel Chicago. The exclusive event will feature 100+ sessions and 190+ speakers, including keynote speakers Major League Baseball legend Joe Torre; Delos "Toby" Cosgrove, MD, president and CEO of Cleveland Clinic; Forrest Sawyer, former television news anchor for ABC, CBS and MSNBC; and Chuck Lauer, former publisher of Modern Healthcare. Register before April 1 and save $100 on the registration fee. To learn more about the event and register, visit: http://www.beckershospit- alreview.com/conference/ 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 Becker's Hospital Review 5th Annual Meeting May 15-17, 2014 Swissôtel • Chicago, Illinois For more information visit, www.BeckersHospitalReview.com and click on "Conferences." Co-Chaired by Chuck Lauer and Scott Becker 100+ sessions and 190+ speakers Register by April 1 for Early Registration Discounts

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