Flat Patient Volume Adds to Fiscal Concerns for 2012

Karen Minich-Pourshadi, for HealthLeaders Media , December 28, 2011
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Which area do you anticipate affecting your margins most and how will you try to offset the impact to your bottom line? Patient volume. We’ve suffered through periods of time when payment trends didn’t keep up with appropriate care, but I’ve never experienced flat volume and zero increases from Medicare and Medicaid at the same time. We can’t let the margins decline because it will impact our ability to reinvest, so it has to be made up in other ways. We have to go back through the supply chain and find more places we can be more efficient.

What areas are you analyzing for growth opportunities?
Ambulatory surgery centers. We’re looking ambulatory; with pay-for-performance, outpatient services will continue to increase.

What do you see happening with payer-provider relationships in 2012?
Partnerships. The opportunity here is in getting all those involved from the beginning, middle, and end to work together to become more efficient. I see providers contracting directly with employers or engaging in partnerships with insurers. If you look at the insurance and the employer processes, it’s redundant and inefficient. Hospitals and insurance companies will develop partnerships and eliminate these redundancies—that can benefit everyone.

Lisa M. Carlson
Corporate CFO
Sanford Health, Fargo, ND,
and Sioux Falls, SD

Total net revenue 2011:
$2.313 billion
Total net revenue 2010:
$2.076 billion
Total number of licensed beds:
1,133 in PPS hospitals,
plus 16 critical access locations

What are the key areas you believe will affect your health system in 2012?
Payment reform. There’s the payer payment system redesign and the federal Medicaid changes. With the commercial payers, there’s at least the potential for a stable payment system, though I think that one could be positive and negative.

Federal budget deficit. The impact of the federal deficit situation is going to be negative. Although a positive coming from this is the ongoing low interest rates. So if you can manage through the financial uncertainty, it’s a great time to invest in your business, perhaps expansion or a deferred project.

Which area do you anticipate affecting your margins most, and how will you try to offset the impact to your bottom line?

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