Health Care Trends and Issues For 2012

Health Care

January 04, 2012

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2012 and the rest of this decade will likely be the most interesting and challenging period in the history of health care delivery and financing. This is because it will be within this period that the health care cost curve may actually bend. The reason we believe this is quite simple: it has to. The current trajectory of the cost curve is unsustainable and has caused the financial oxygen to be virtually sucked out of discretionary spending. Fortunately, enough key stakeholders (providers, payers, employers, and the government, etc.) acknowledge and embrace that reality. Health care financing remains a zero sum game—one stakeholder’s revenue (e.g., provider) is another’s expense (e.g., payer, employer). So bending the cost curve will certainly carry with it significant financial implications, which is why, for example, we have been assisting our hospital clients in developing and implementing strategic financial plans to ensure the sustainability of their operations presuming they will receive Medicare reimbursement rates for their entire revenue stream.

While the future of the Patient Protection and Affordable Care Act (PPACA or “Affordable Care Act”) and the states’ various responses to it will be important, we believe the health reform legislation train has clearly left the station and it isn’t coming back any time soon. As it has to date, reform will remain largely local and market-specific.

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