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Four Key Takeaways from SHSMD Connections Conference 2014

Posted October 29, 2014

My colleague Justin Pawlak and I recently attended the 2014 Society for Healthcare Strategy and Market Development (SHSMD) Connections conference in San Diego. SHSMD is comprised of healthcare executives who are actively involved in strategic planning for their organizations, which is a prime focus of NexCore Group’s. The location, design, and programming of the outpatient facilities we develop are always driven by our client’s business and strategic objectives.

Key Takeaways

Here are my four key takeaways from the conference:

  • This is a time of great uncertainty. Providers are definitely going to get paid less and will need to spend lots of capital to prove their value.
  • The current environment is one of experimenting with concepts to lower costs and provide greater value. No one knows what will work, but sticking with the status quo is not an option. Health systems must be innovative.
  • Health system capital is in demand more than ever, and re-engineering is expensive. New healthcare IT, employing and managing physicians, and starting up insurance products are expensive, especially in an environment with shrinking inpatient utilization and pressure on rates for all services.
  • Hospital executives are under pressure for their time, as these new initiatives are consuming their management bandwidth.

Other Topics and Concerns

  • Much of the content of this year’s program was about population management, although the collective concern was that this term was not particularly useful because it can have so many different meanings.
  • Another issue many were talking about was the transition from fee-for-service payment to value-based reimbursement, but no one was sure about when or how this would occur.  Speakers at the “Running Towards Risk” session acknowledged that their CFOs were hanging on for dear life to existing reimbursement mechanisms.
  • There was much talk about the prevalence of ACOs (650 currently exist, and new ones are forming daily), but ACOs are just getting started with sharing risk involving significant revenue. The general consensus was that post-acute care (PAC) will be important for ACOs to manage, as the dollars involved are substantial. For example, one speaker said that in 2012 PAC was 16% of Medicare total spending.
  • Everyone was talking about the decline of inpatient revenue and the growth of the outpatient business, and how they were planning to redistribute their facilities to extend their footprint into retail environments.
  • Bundled payment concepts were also a popular topic, but most speakers cautioned listeners that the promise of increased volume and market share gains were hard to get, and there was no doubt that reimbursement would be lower.
  • Walgreens spoke about opening a new store every 17 hours, and how they now had a store within 5 miles of 75% of the US population. Some wondered if Walgreens was friend or foe, and if their intention was to compete more with healthcare systems.
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Author:

Tim Oliver

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