Working with input from Hospitals throughout the state, The California Healthcare Association in Sacramento has compiled a document which, based on current trends, predicts the future of the healthcare landscape. While many of the trends may be perceived as threatening to hospitals in general, the consensus is that those hospitals who acknowledge and adapt to the trends listed below will not only survive, but flourish, in the changing healthcare landscape. What follows is a summary of the themes outlined in the Association's document, "California Health Care 1996 to 2005 = A View of the Future."

The key themes in the Association's view of the future, which they believe Hospitals should be aware of, are COMPETITION, CONSOLIDATION, CAPITATION and COLLABORATION.

COMPETITION between health maintenance organizations (HMOs) and provider-organized regional and statewide delivery networks will drive HMO/health plan premiums,and provider reimbursement,down for the next four years. Competition will incorporate quality, not just price. Accountability for performance will be demanded by employers. Health plans and provider-sponsored networks will establish comprehensive data bases, and publicly report outcomes, costs and customer satisfaction.

CONSOLIDATION will result in fewer "stand alone" hospitals. Many hospitals will team together to become part of four to seven integrated delivery networks (IDNs) in most metropolitan areas, some of which will have a statewide presence. Most physicians will join increasingly large group practices and/or regional independent practice associations (IPAs). Many physicians/physician groups will become part of physician practice management companies (PPMs), health plans or broad networks. HMOs and insurers may consolidate down to 12 to 15 plans, including several which will be provider-sponsored.

CAPITATION and related bundled payments will become the dominant form of provider payment for many physicians and hospitals, incentivizing 25-percent to 35-percent reductions in hospital bed days and physician procedures. Bed demand is likely to drop below one occupied bed per 1,000 people, creating a forecasted statewide surplus of nearly 33,000 beds by 2005.

COLLABORATION will be commonplace among providers, extending in some cases to payers, purchasers and others. Joint activities will take many forms, involving integrated partners, networks and network members, non-network providers and even competitors. There will be little, if any, safety-net funding for providers from the federal government. Health reform in California through the year 2000 will be market-led. The state of California will complete the contracting out of much of the Medicaid program to capitated plans and provider networks. Medicare HMOs will enroll more than 50 percent of the senior population in metropolitan areas. In 2000 2005, the access issue may be revived. Continuing improvements in the California economy and tax revenues could encourage the state Legislature to expand Medi-Cal to cover some of California's 6 million uninsured, beginning with children. The federal government's limited assistance for illegal immigrants may add to the burden on California's hospitals, physicians and local governments.

To order a complete copy of the California Healthcare Association's Document, California Health Care 1996 to 2005 = A View of the Future, call the Association at (916) 552-7545.

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