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Health Strategies & Solutions Diagnoses Trends and Implications for Healthcare Industry in 2009 and Beyond
Date:3/4/2009

spiral in 2009, additional effects can be expected on postponable demand such as elective procedures. Overall, an acceleration of the gap between continuing underlying cost inflation and likely relatively modest reimbursement increases will create stress for all.

At its most basic level, HS&S predicts the deteriorating economy will cause a reexamination and redirection of previously crafted strategies and plans for most organizations. "It will undoubtedly precipitate some pruning of marginal or peripheral operations and businesses and greater concentration on the core," Zuckerman adds. Healthcare organizations will be challenged to focus on improving their market positions and increasingly differentiate themselves from the competition in their key service lines.

A secondary effect of the deteriorating economy will be to undermine the continuing viability of many organizations. Already, there have been growing gaps between the "rich" and "poor" which will only accelerate in the emerging environment. A significant effect of escalating financial difficulties will be a new wave of consolidations and failures, rivaling the last wave which swept the industry about 10 years ago. The strong will give consideration to their role in this dynamic situation, and the weak will seek partners while they still have value and negotiating leverage.

With the country's economic circumstances absorbing national attention, it is impossible to tell at this point if healthcare reform will occur in the near future and if so, how sweeping the changes might be. Savvy organizations will deal with the uncertainty of healthcare reform through a two-track strategy: one track predicated on business as usual and the other track on the common elements of the proposed reform initiatives. Only by following a two-track strategy can the uncertainty of this potential major development be addressed appropriately. And, between the two tr
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