Should community health systems rely on independent medical practice as a durable and reliable “strategic partner” into the future?
Community health care institutions remain to be critical in the health care system in the United States. The modern healthcare environment embraces the integration of health care practices as a way of increasing efficiency and reducing costs of operation. The incorporation of independent medical practices in community healthcare is desirable in the sense that there is a significant drop in costs of operation for independent medical operators. The independent operators make use of the assets present in the community health care institutions to provide medical assistance to people in the respective communities. However, the backlog of costs of operation still comes back to the government, raising questions of whether the exercise could be sustainable.
“Is clinical integration sufficient, or is economic integration an imperative?”
Clinical integration is part of the consolidation of efforts in the US healthcare sector. These efforts are meant to enhance efficiency in the management of financial resources in the sector. However, several factors surround clinical integration, making it hard to bring about synergy in the healthcare system. Clinical integration is part of the enhancement of vertical integration in the healthcare system. According to experienced leaders in the healthcare system, the alignment of the values that define the culture of medical operators enhances shared accountability in the sector, thereby boosting efficiency in the sector. The embrace of values helps in the rationalization of economic issues that affect the sector.
“Can community health systems remove from 15% – 20% of operating costs from the clinical and business models without fundamental structural, programmatic and business model reconfigurations?”
Reduction of the operational costs of the community health systems can only be attained through the restructuring of the entire healthcare system. The complexity of the healthcare sector and the operation of the community health care systems that operate on a no-profit-making basis are affected by the product-line process of delivery of tools and equipment. Reducing operational costs in community health systems by 50 percent implies a lot of changes in the entire healthcare sector as the means for offsetting the reduction in costs are sought. This can have serious impacts on health care economics in the sense that even private players will have to play a role in offsetting that cost.
“How long can we expect 36% – 42% profit margins from our largest commercial payers to compensate for losses on governmental payers?”
The support of community healthcare in the United States is based on the money that is raised from commercial payers. Community health systems often operate on deficits and rely upon support from the government. The strategy of sourcing for funds from commercial payers is likely to result in a standstill as more commercial payers seek means of reducing their expenditure to match the contemporary economic pressures. The commercial payers struggle to make profits and the profits in the contemporary economic environment. This implies a reduction in the amount of money that can be given to support the deficits of government payers.
“To whom will we send our bill for mission costs?”
The United States healthcare system has broader and admirable objectives that are stipulated in the broader healthcare department mission. The objectives of the healthcare sector denote the inclination of health care services in such a way that the health care needs of each individual in the United States are fully met. However, the fulfillment of these objectives remains to be a mystery due to the financial implications attached. The main means through which the objectives can be met is by increasing taxes to raise the money. This, in itself, has a negative connotation on the ability of individuals to cater to their needs, including healthcare needs.
“Should the provider-side expect the payer to fund its required business and clinical model transformations?”
The models of increasing efficiency and delivery of healthcare in the United States depend on the ability of the government and private healthcare providers to raise funds for restructuring the sector. Any activity that is geared towards the improvement of healthcare productivity relies on the availability of funds to fund the changes in the sector. Healthcare is a basic need and the model of delivery that is embraced in healthcare does not entail the competitiveness of the players. This could result in a reduction in health care costs. Payers are bound to keep financing the healthcare improvements as far as the financial rationalization is being done in the sector.
“Are we ready for integration and related revenue and asset reconfigurations?”
It is expected that integrating the healthcare system will result in improved services. However, numerous issues come with the integration of services in the sector. These issues revolve around revenue generation by healthcare providers in the United States. While the federal government works hard to ensure that community healthcare systems can provide services, the private healthcare providers, on the other hand, also work hard to ensure that they maintain sustainable levels of revenues.
“Are conventional methods, metrics, and standards of the financial health of health systems sufficient?”
The development of conventional methods and financial standards in the health care system seem cannot work well due to the fragmentation of practices within the healthcare sector. There are different players in the healthcare sector; those who aim to make a profit and those who are centralized in the sense that they are mere facilitators of healthcare, like the community healthcare systems. There is also a lot of dynamism in the healthcare market. These call for strategic responses from each player in the industry. This means that each player structures the financial goals depending on the healthcare market dynamics.
“How will strategic capital be allocated?”
Allocation of the proposed strategic capital in the US healthcare industry ought to be done based on the critical relevance of the department. Looking at the healthcare system, what comes out is that each of the departments or operational segments is highly dependent on each other. This implies the need to boost each segment if results are to be equalized. As is with the rate of income inequality in the United States, there is a need to ensure that more capital is allocated to services that are used by most people. The assumption here is that the rich can afford private medical services from private providers.
“What is the epidemiology telling us?”
The trends in the healthcare industry denote a rise in the number of complex diseases in the United States. These range from cardiovascular disease to heart-related conditions and cancer. These diseases are now reported across the United States population, unlike in the past where the diseases were only reported among the high-class population. The implication here is that a lot of financial resources have to be diverted from primary healthcare to the management of these diseases. Clinical care amendments calling for innovation will keep imposing challenges on healthcare providers and increase the levels of revenue for managing such diseases.
What is the optimized “value equation” in the road ahead?
There is a common agreement by the leaders in the United States health care sector that the healthcare costs in the United States are a burden to the citizens and that the costs need to be reduced significantly. However, optimization of activities in healthcare is a complex exercise basing on the fact that functions in the healthcare sector are highly fragmented and affected by the economic factors and interests of the diverse players in the sector. Leaders in the United States healthcare sector need to come together and plan how to rationalize the interplay of economic forces and interests to formulate a scale on which costs can be reduced, while still ensuring that the quality of services in the sector is not watered down.