A recent survey of hospital/health system CEOs by a national healthcare consulting company reported that cost control is their top priority. CEOs responding to the survey noted “innovative approaches to expense reduction” as the second leading priority. The survey results supported an April report from Moody’s Investors Service that the median operating cash flow […]
Veralon Views Blog
The Veralon Views blog is an extension of our partnership with leaders who are transforming the healthcare industry. Here, we share expert perspectives from our nationally recognized senior consulting team on issues that are key to the success of your organization.
Hospitals/systems may be considering the pro’s and con’s of growing their service lines, even as they grapple with cost reduction strategies. Experts have noted the many benefits including increased patient volumes, improved health outcomes, increased market share and improved physician loyalty. If hospitals/systems focus on high-value service lines, a key benefit would be a significant […]
As hospitals and health systems build their employed medical practices, a large emphasis is often put on compensation arrangements, and little attention is paid to engaging physicians in the successful management of these practices. At the same time, hospitals are experiencing significant operating losses for their employed practices. Losses vary, but hospital-owned practices typically lose […]
Through Congressional direction and previous Administration initiatives, Medicare has implemented incentives to reduce hospital readmissions. One example is the Hospital Readmissions Reduction Program (HRRP), which financially penalizes hospitals with relatively high rates of Medicare readmissions. One of the criticisms of the program has been the anticipation of an increase in the number of observation […]
We’re continuing the summary of the Moody’s Investors Service report on integrated planning and financial viability. Last week we covered investments in off-campus sites while maintaining high-margin inpatient services. Today we focus on the remaining components of integrated planning: digitalization, investment in talent and operational and funding flexibility. Digitalization Information technology investments […]
Evolving industry pressures will require hospitals/systems to focus on their business strategies and prudent allocation of limited capital and financial resources. Financial viability and competitiveness will require expanded patient access, digital efficiencies, top talent and financial flexibility. Moody’s Investors Service analyzed each of the above components in its recent Sector-in-Depth, Flexibility, integrated planning key […]
Balance sheet strength, measured on both an absolute and relative basis, as well as liquidity, significantly drives not-for-profit and public hospitals’ credit quality. Stock market growth over the last several years has been impressive. However, in keeping with historic trends, volatility—temporary market fluctuations or a short-term downturn—will trouble institutional investors in the near term, according […]
Moody’s Investors Service recently released its preliminary medians for 2017. The results show a continuing decline in not-for-profit and public hospitals’ profitability metrics. Margins hit 10-year lows—falling below levels seen during the last recession. Profitability margins mark 10-year low. The median operating cash flow margin dipped to 8.1% as expense growth outpaced revenue growth […]
This week we feature excerpts of a discussion with Marian Jennings of M. Jennings Consulting and an iProtean, now part of Veralon expert. Marian covers the importance of “doing more with less” and the most effective approaches to reducing costs. iProtean, now part of Veralon: Why should we be focusing so much attention […]
Capital markets, which have been relatively stable over the last several years, have begun a slow but consistent rise in interest rates. This means healthcare organizations should prepare for a higher cost of capital. The outlook becomes confusing, however, because of “recent significant policy developments” from the current congress and administration, notes the author […]