3 unexpected stories in 2013

For more than a dozen years The Godbey Group has been proud to help hospitals and healthcare systems contract for the revenue they need to care for patients and improve the health of the communities they serve. During 2013 we observed three unexpected stories in the field of healthcare.

Fewer inpatient admissions
The trend towards fewer hospital inpatient admissions that began with Medicare patients seems to have jumped over into commercially insured populations as well during 2013. Combined with marginally lower Medicare rates, the emphasis on the elimination of unnecessary readmissions has reduced hospital revenue. As a result hospital efforts to cut operating costs are chasing a steadily diminishing line of revenue from Medicare and commercial sources. Given that CMS plans eight more years of Medicare rate reductions this trend may not end anytime soon.

Return of narrow networks
Health plans reintroduced narrow networks to cope with the tidal wave of utilization that might be unleashed by the new health insurance marketplaces. But politicians and providers alike did not expect narrow networks and were caught off guard by the implications. In some markets health plans walked past leading hospitals and even physicians to contract networks. Physicians in particular were startled to be left out of networks. Commercial plans in some states have taken the opportunity to reintroduce narrow networks to their commercially insured clientele, as well.

Troubled rollout of insurance marketplaces on-line
With all the time and money available to CMS it’s startling how the federal government frittered away its opportunity to introduce the new health insurance marketplaces online this year. All the more so because such diverse states as Kentucky and California among others have been so successful in launching their own state-controlled insurance marketplaces. Even the tardy and costly repair work to the sloppy federal sites raises legitimate concerns about the viability of the on-line approach to matching consumers with health plans. These and other fundamental concerns about the purpose and tactics of healthcare reform began to bubble to the top of media and public awareness in the closing days of 2013.

In our next post we will focus on The Godbey Group predictions for 2014. Happy Holidays to all.



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Neil Godbey is President of The Godbey Group, Irving, Texas. Since 1999 The Godbey Group has been helping leading hospitals and healthcare systems negotiate favorable managed care and value-based contracts.