Health Strategies & Solutions Diagnoses Trends and Implications for Healthcare Industry in 2009 and Beyond

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Health Strategies & Solutions, Inc., (HS&S), the nation's leading healthcare strategy firm, is announcing its forecast for the health care industry in 2009. Provoked by the deteriorating economy and the prospect of significant federal health care reform, substantial changes will affect the future for both patients and providers.

Reform legislation is likely to call for expanded coverage of the uninsured, a new or expanded federally sponsored insurance plan, greater use of information systems by providers, enhanced preventive services, and increased payment incentives for better and safer care

Health Strategies & Solutions, Inc., (HS&S), the nation's leading healthcare strategy firm, is announcing its forecast for the healthcare industry in 2009. Provoked by the deteriorating economy and the prospect of significant federal health care reform, substantial changes will affect the future for both patients and providers.

With health care as a major element of domestic policy for the new president and a high priority for congressional leaders, major reform lies just on the horizon. "Reform legislation is likely to call for expanded coverage of the uninsured, a new or expanded federally sponsored insurance plan, greater use of information systems by providers, enhanced preventive services, and increased payment incentives for better and safer care," states Alan Zuckerman, nationally recognized healthcare consultant and president of the Philadelphia-based firm, HS&S. "Less clear, however, is how reform will be financed and whether it will be positioned initially as part of an economic stimulus package or funded by raising taxes and through savings generated by various efficiencies."

Zuckerman says the effects of the deteriorating economy are already being felt throughout the industry. As the economy continues its downward spiral in 2009, additional effects can be expected on postponable demand such as elective procedures. Overall, an acceleration of the gap between continuing underlying cost inflation and likely relatively modest reimbursement increases will create stress for all.

At its most basic level, HS&S predicts the deteriorating economy will cause a reexamination and redirection of previously crafted strategies and plans for most organizations. "It will undoubtedly precipitate some pruning of marginal or peripheral operations and businesses and greater concentration on the core," Zuckerman adds. Healthcare organizations will be challenged to focus on improving their market positions and increasingly differentiate themselves from the competition in their key service lines.

A secondary effect of the deteriorating economy will be to undermine the continuing viability of many organizations. Already, there have been growing gaps between the "rich" and "poor" which will only accelerate in the emerging environment. A significant effect of escalating financial difficulties will be a new wave of consolidations and failures, rivaling the last wave which swept the industry about 10 years ago. The strong will give consideration to their role in this dynamic situation, and the weak will seek partners while they still have value and negotiating leverage.

With the country's economic circumstances absorbing national attention, it is impossible to tell at this point if healthcare reform will occur in the near future and if so, how sweeping the changes might be. Savvy organizations will deal with the uncertainty of healthcare reform through a two-track strategy: one track predicated on business as usual and the other track on the common elements of the proposed reform initiatives. Only by following a two-track strategy can the uncertainty of this potential major development be addressed appropriately. And, between the two tracks there is much common ground, including the likelihood of escalating financial pressures and the inevitability of greater consolidation.

About Health Strategies & Solutions, Inc.
Health Strategies & Solutions, Inc., is the nation's leading healthcare strategy firm. From their corporate headquarters in Philadelphia and regional offices in New York, Virginia, Florida, Michigan, Colorado, and California, they have served more than 300 academic medical centers, community hospitals, multihospital systems, physician groups, and specialty organizations across the country. For more information, please visit hss-inc.com.

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