Dive Brief:
- Maintaining profitability is the biggest challenge the healthcare sector in 2014, according to a Fitch Ratings report.
- Hospitals are likely to be at risk indefinitely, given the constant debates over reimbursement under Medicaid and Medicare, according to Fitch.
- To address these threats, hospitals are considering strategies such physician employment, investment in outpatient service lines and joint ventures with other providers in the continuum of care, which require comparatively modest capital investments.
Dive Insight:
Hospitals are in something of a Catch-22 situation here. If they expand their service lines or spend to buy medical practices, Fitch and other agencies may penalize them for the extra risk they're taking. But on the other hand, if federal reimbursement goes down, bad debt rises due to treating patients with high deductibles and care continue to shift to outpatient settings, they're in even worse trouble. Seems that taking some risks on strategies with high upsides may be their only smart choice. At least that way, they're taking control.