The hospital environment in the United States is quickly changing nationally and exponentially more rapidly in Pennsylvania. According to Moody analysts from a Modern Healthcare article by Alex Kacik, hospitals are successfully lowering their operational expenses but not as quickly as their revenue is dropping. The implications of that statement are onerous. There are only so many ways to cut until you reach rock bottom as an organization and the point of no return. Shrinking to greatness is typically not considered a viable option to survival.

The statistics from 2017 are very telling as expense growth was cut by 5.7% but revenue has only grown by 4.6% and that was in spite of the numerous mergers and acquisitions that have taken place. In fact, with 13 M&A transactions, Pennsylvania was the most active merger and acquisition state nationally followed by Georgia and Texas at nine and eight each. In the year 2000, there were approximately 122 independent community hospitals in Pennsylvania and now there are just 36 with several of these hospitals hanging by a proverbial economic thread.

Without getting too deeply into the financial woods, Medicie and Medicaid payments as a percentage of gross hospital revenue increased slightly, but higher paying commercial insurances have gone down by 33.9%. In a financial structure where less than 3% of net patient revenue came from capitated and risk-based contracting in 2017 and 41% from DRG’s (Diagnostic Related Groups), 28% from fee schedules and 17% from the actual charge master or list price, based on a traditional operating model, there is no clear pathway for small and rural hospitals to remain viable.

Add to these economic challenges, the 2868 total number of retail clinics in the United States supported by Minute Clinic, Walgreens, The Little Clinic, Walmart, Target and dozens of other smaller corporations as well as an exponential growth in free-standing surgi-centers and independent physician-based clinics, and hospitals must take additional aggressive steps to change their business model.

In the Modern Healthcare article, Lyndean Bric, President of Advis Group, a healthcare consulting firm, states that hospitals must find ways to grow volumes, be creative, and do things differently than they have by looking to monetize assets and seek out non traditional revenue.

What if your hospital could afford to have its own Innovation Officer, and creativity could be added to your C-suite agenda at every meeting? With experience in the latest “Omics” research, expertise and connectivity in Integrative Medicine, and other cash income producing innovations, we can change the way a community utilizes their local hospital facilities while generating significant financial gains to their bottom line.

Although some of the areas that we may recommend may seem a little like “driving in front of your headlights” to the traditionally trained C-suite executive, each of them comes with a proven track record of success from multiple settings. Ultimately, the hospitals that work with us have experienced new levels of community acceptance and involvement that helps to reposition them as true partners with their patient base on a level that drives increased volumes and patient revenue.

Be it cash paying integrative treatments, pharmacogenomics testing, human longevity, federal and state grant opportunities, new technologies for treating depression, opioid testing labs, the creation of a 501©3 Foundation, mobile imaging, polypharmacy, or just creative supply chain payment methodologies, we hav experience, knowledge, and connectivity in all of these areas and because of that can bring the right people to the table to make “creative things” happen in an economically viable way for you and your organization.

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