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Study finds safety-net hospitals need to adapt for survival

August 15, 2012
Uncategorized By LW Consulting Inc.

Earlier this week, a study released by The Commonwealth Fund found that safety-net hospitals that currently rely on politically negotiated funding are set to face drastic financial reversals if they don't change certain business practices under the Patient Protection and Affordable Care Act (PPACA). In addition, monetary reversals can happen due to deficit reduction programs and a weak economy.

Professor Nancy Kane, one of the study's authors and educator at Harvard School of Public Health, said that five years worth of financial data was gathered from 150 urban, safety-net hospitals across the country. Each one adhered to at least one of three criteria: a 2007 membership in the National Association of Public Hospitals and Health Systems, a threshold percentage of Medicaid discharges or a percentage of minority discharges.

Kane told Healthcare Finance News that the problem is that a majority of these hospitals have not focused on things that attract insured patients, such as effective management, cost control or quality improvement. This will, in all likelihood, cause many of these facilities to undergo intense financial pressure that threatens their very survival.

"These hospitals are going to have to be very careful in the ways in which they transition," Kane said. "It has to be very monitored at a local level so the funding isn't pulled out too quickly. There needs to be an investment in these safety-net hospitals, like attracting good physicians, so that they can compete with other hospitals because if they can't, they won't survive."

Medical facilities of all types would be wise to undergo healthcare strategic planning to ensure that the transition process runs as smoothly as possible. Working with a hospital consultant will allow everything from e-prescriptions to EMRs to be properly woven into the organization's daily routine.