How U.S. Hospitals and Health Systems Can Reverse Their Sliding Financial Performance

Since the beginning of 2016, the financial performance of hospitals and health systems in the United States has significantly worsened. This deterioration is striking because it is occurring at the top of an economic cycle with, as yet, no funding cuts from the Republican Congress.The root cause is twofold: a mismatch between organizations’ strategies and actual market demand and a lack of operational discipline. To be financially sustainable, hospitals and health systems must revamp their strategies and insist that their investments in new payment models and physician employees generate solid returns. Three areas demand special attention: the management of the movement toward population-based payment, the regular Medicare and commercial business, and physician employees.