2018 outlook for healthcare
Written by Chuck Coder, chief financial officer, Novant Health UVA Health System
Recently, I ran across an interesting article online written by Jeff Byers called, “Why hospitals will face greater cost containment efforts in 2018.” The article, published by Healthcare Dive, highlights how 2017 was a challenging year for hospitals. Patient admissions were soft. Rising deductibles and copays presented pressures on the revenue side, while the costs associated with care significantly exceeded inflation rates. 2018 doesn’t look to be much different. Lower volumes, lower reimbursements and higher costs don’t paint a pretty picture for the future. Novant Health UVA Health System faces these same challenges. Byers states that “providers are rethinking their business strategies to realize efficiencies.” He says hospitals need to focus on the following:
- Clinical variation reduction – standardizing care paths and supply utilization, which creates savings.
- Labor management – optimizing the workforce. With labor being the single largest expense, all components need to be scrutinized at the granular level, including overtime.
- Revenue cycle management – increased focus on minimizing denials.
While everyone knows that an organization cannot save its way to prosperity, until the uncertainty surrounding the healthcare industry works itself out, the focus on cost containment looks to be the new norm.