Publications predict a negative outlook for not-for-profit hospitals in 2018 due to a continued downward trend in operating cash flow. This is mostly due to slowing revenue growth and high expenses. The following circumstances also lend credence to the unfavorable outlook for not-for-profits in 2018:
High expense growth (also contributing to the negative outlook) is attributed to:
There are immediate actions that not-for-profit hospitals can employ to move forward in this time of uncertainty, as well as strategies that can increase cash flow and generate revenue.
In the short-term, not-for-profit hospitals should look at the contracts and rates of their top commercial managed care plans. Analysis of reimbursement and subsequent renegotiations with plans, particularly for high-cost, high-volume services, will increase reimbursement. Defining provider “value” and implementing value-based payment models will add revenue.
Not to be overlooked, are revenue cycle improvements to address missed opportunities in pricing, charge capture, managing HDHPs, claim denials and bad debt. Revenue cycle improvements can also improve efficiencies and help manage expenses.
Not-for-profit hospitals should look into ways to secure and grow their market share; this may encompass building a continuum of care. There are multiple strategies a hospital can take to start increasing their market share:
Yes, 2018 will have its challenges, but there are strategic options for not-for-profit hospitals. Healthcare specialists such as Baker Tilly’s healthcare team can assist in redefining your challenges and turning them into opportunities and timely responses.
For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.