ViewPoints Blog

Over the course of the last several months, we’ve been hearing rumbling from within the payor community that participation in the state exchanges created as part of the ACA may not be a long-term proposition. Last week those rumbles turned into shockwaves when news broke that UnitedHealthcare – the nation’s largest insurer – would exit exchanges in all but a handful of states in 2017.

Market volatility will likely continue in 2016, and this further highlights the importance of measuring opportunity and risk across financial classes, payors, and service lines. For hospital executives, this knowledge is essential to preserving net patient revenue and identifying strategic growth opportunities.

Whether it’s conducting managed care-themed seminars or speaking one-on-one with executives, I receive a lot of questions about the negotiation process. Everyone wants tips and tidbits they can take to their next payor negotiation.

While the calendar may have changed to 2015, much of the uncertainty and adjustment to change that defined last year will persist. This prolonged state of fluctuation only further emphasizes the importance of measuring opportunity and risk across specific payors, service lines, and markets.

Market data is vital for making strategic growth decisions, preserving net revenue and securing better outcomes in payor negotiations.But for hospital executives, getting their hands on this data is easier said than done.

Hospital pricing is back in the news. If you live in California, a new study has found that a simple blood test can run you anywhere from $10 to $10,000. Headlines like this are popping up in news feeds with regular frequency, and pretty soon consumer awareness will transform into action.

Do you know how much a gallon of milk costs? Sure, it's posted right under the product in any grocery store. Does the price change if you go to Kroger, Costco, or Wal-Mart? What if the price listed in the store wasn't actually the price you paid at checkout? And what if Wal-Mart wasn't allowed to know the price at Kroger? What if the price you paid wasn't listed anywhere and depended on some other factors like how many gallons you bought, what else was in your cart, how old you were, the day of the week you bought it, or how much milk your parents bought growing up?

When Paul O'Neill took over Alcoa in 1987, market share had been slipping, profits were down, and the stock price was falling. When he was introduced to the investment community, he was expected to deliver the typical new CEO speech about how he would turn the company around with a focus on increasing profits and reducing costs. Instead, Paul O'Neill announced that his goal was to make Alcoa the safest company in America.