Workweek September 29, 2022
Blake Madden

Last week I talked about the dynamics facing hospitals and how the current model and way of thinking is unsustainable.

This week, I’m diving into what changes will likely need to happen in order for health systems to find a sustainable future!

KEY TAKEAWAYS

Here’s my thinking: As mentioned in Part 1, the hospital industrial complex focused on fee-for-service growth and market power will decline as margins shrink and local mergers are killed by antitrust review.

Further, assuming the tough operating environment continues, my guess is that hospitals will move toward risk-based contracting (AKA, revenue diversification), especially as payors build out their clinical service assets (United-Optum, Humana-Centerwell, Elevance-Carelon, and Cigna-Evernorth).

This move toward risk and cost management will ALSO incentivize...

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