We may not be able to fully predict how future changes to the Affordable Care Act (ACA) will affect the healthcare system, but AAFCPAs advises healthcare clients to position themselves for change. AAFCPAs’ Matt Hutt reflects on last week’s healthcare reform news, and shares insight into what providers may expect:
- Healthcare providers must position themselves for change, and focus on short and long-term Strategic Planning. Providers should now: assess the profitability of programs & services, watch expenses, contain costs, and control risks.
- Providers should consider discontinuing/outsourcing services that are not a loss leader, and that cost the organization, for example: Lab and Social Service Programs. Providers may consider adding more profitable programs/services, such as Pharmacy.
- Healthcare providers should re-evaluate their necessary levels of financial reserves. This should be incorporated into their cash management and investing strategies.
- Providers must be careful now of investments and growth plans while there is so much uncertainly with healthcare reimbursements. Some of the really big providers are now struggling with their fiscal health, arguably because they grew too big too fast by expanding their footprint and service offerings.
- Providers should evaluate the benefits of forming strategic alliances (healthcare collaboratives) with complementary providers, such as: a Community Health Center providing outpatient/primary care services aligning with a Hospital to provide inpatient services, or aligning with a Human & Social Services agency for Behavioral Health services. Alliances may offer meaningful benefits, including: shared revenue & costs, enhanced geographic footprint, and perhaps most significant: access to a more diversified patient group. When it comes to the reimbursement landscape, the more diversified your patient group, the more safeguarded providers are from risks. AAFCPAs has advised clients in forming mergers and strategic alliances, helping them to optimize and leverage each other’s strengths.
- Providers may be able to improve quality and outcomes, and provide services as part of an integrated delivery system by participating in an Accountable Care Organization (ACO) model. We have advised behavioral health agencies on the implementation of community partnership programs and the financial impact that these can have on the agencies’ operations.
Now more than ever, the healthcare industry has myriad rules and regulations, and today’s providers are navigating significant changes in the way they conduct business and care for their patients. Providers must quickly adapt to the changing regulatory environment, and capitalize on emerging opportunities to reduce costs, streamline efficiency, and achieve more coordinated and integrated forms of healthcare delivery.