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What Hospitals Must Do to Thrive -- Not Just Survive -- on Medicare Margins
Date:12/1/2011

WASHINGTON, Dec. 1, 2011 /PRNewswire/ -- Over the next decade, U.S. hospitals and health systems will face significant changes in the operating environment that, left unchecked, could negatively impact their financial outlook.  However, according to research and analysis from The Advisory Board Company, proactive leaders can position their health systems to thrive in the new environment by creating road maps for balanced margin enhancement.

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"Hospital leaders understand two immutable truths about the decade ahead: No one can repeal the aging of the Boomers onto the Medicare rolls, and caring for this population means tackling the rising costs of chronic medical conditions," says Tom Cassels, Executive Director of Research and Insights for The Advisory Board Company, a research, consulting, and technology services firm serving a membership of more than 2,900 of the world's leading health care organizations. 

"In the face of these challenges, you cannot simply cut your way to financial sustainability," Mr Cassels adds.  "Rather, hospital leaders need comprehensive plans to ensure financial strength, to continue investing in clinical excellence, and to sustain their commitments to the communities they serve."

Analysis from The Advisory Board Company's flagship research program, the Health Care Advisory Board®, suggests that through rigorous efforts to bend their own internal expense growth curves, best-in-class hospitals and health systems can achieve significant margin improvement to offset the impact of downward pressure on price, supply cost inflation, payer mix shift, and case mix shift.  

Yet focusing narrowly on cost cutting as a means of maintaining profitability will not be nearly enough, achieving just half of the margin improvem
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SOURCE The Advisory Board Company
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