Health Systems Face ‘Perfect Storm' of Financial Challenges

Guidehouse Payer/Provider Sector Leader Rich Bajner discusses financial and operational stresses on hospitals as well as opportunities in the ambulatory space with Modern Healthcare.

Inpatient admissions and emergency department visits are still well below pre-pandemic levels—and patients who are coming into the hospital are staying longer, driving up costs. Even as demand slowly rebounds, providers have been limited by worker shortages that have led to double-digit percentage increases in labor expenses.

Health systems pursued mergers and acquisitions in the physician group and outpatient spaces in an attempt to mitigate the decline in ED-driven inpatient care referrals. “There is more movement to the high-margin ambulatory surgery center market,” said Richard Bajner, partner and payer/provider sector leader at Guidehouse. “The progressive payers have a better value proposition for physician partners, who are getting picked off faster than these health systems recognize. That market is going to be strong for quite some time—the biggest risk taker is a hospital-based health system that doesn’t have an appropriate ambulatory-based strategy to compete for physician loyalty.”

Read the full story in Modern Healthcare.

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