IN THE HEALTH CARE INDUSTRY, 2007 could be a watershed year. Consumer-driven health care is taking root, incentives to use health savings accounts and their brethren are growing, and initiatives at the state and national level are calling for coverage for all. Professional services firm Ernst & Young took a peek at the outlook for 2007 and determined that "the convergence of market pressures, public policy developments and cost recovery concerns ... will drive momentum for wider adoption of electronic records, improved efficiencies, greater transparency and new metrics for quality care."
Ernst & Young sees the following issues as key to shaping the health care provider industry this year:
- Cost recovery: States are facing pressure from the increased number of uninsured, which puts more pressure on the federal government. E&Y says that while resolution is unlikely, the dialogue surrounding the problems is likely to escalate.
- Technology catch up: Sen.Ted Kennedy, D-Mass., has said one of his top priorities will be passing health IT legislation. This will address the industry's tech lag and follow up on bills passed late last year as the 109th Congress wrapped up its business.
- Transparency: As consumers are handed more of the responsibility for their health care costs, increasing cost and quality transparency take on added importance. In August last year, President George W. Bush signed an executive order requiring such transparency. Maybe 2007 will see more movement on the topic.
- Professional staffing:Two things are going to collide here. One, labor costs at hospitals and skilled nursing facilities are rising faster than inflation. Two, by 2010 there will be a need for 5.3 million additional health care workers, according to the Department of Labor. Finding enough workers and the money to pay them all will be an issue that receives attention this year.
The Ernst & Young report lists pay for performance and gainsharing, community benefit and tax-exempt status, and private equity investment in health care as other issues that need to be addressed in 2007. For more information, visit www.ey.com.
