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How hospitals are taking action now for healthcare reform

“Organizations that position themselves to provide solid, integrated care — regardless of what happens with the health care reform law — will do better,” Tom Dennison, a Syracuse University professor and health care expert. Truer words cannot have been spoken, especially as the Supreme Court just heard oral arguments defending and denouncing the constitutionality of the Affordable Care Act. While there are concerns involving the minimum coverage requirement and Medicaid expansion items, hospitals not taking any form of action now will have a very difficult time surviving.

Hospitals and systems are at more financial risk than ever for care costs and quality due to the Affordable Care Act.  Should healthcare reform pass, an influx of Americans, 7 million by conservative estimates, will be insured creating more demand for hospitals to streamline services and critically analyze the cost effectiveness of new initiatives. Those hospitals and health systems taking steps now to adjust are not only preparing for the potential future, but improving quality of care, efficiency, and the overall health system in America.

The current and traditional fee-for-service model is one of the reasons why America spends more money on health care than any other industrialized country. The Affordable Care Act’s far reaching goals are there precisely to find alternative ways to reward hospitals not for services performed, but for quality of care. All of this is helpful for patients and hospitals alike as it enforces a personalized patient-centric hospital experience while boosting the bottom line by being rewarded incentive payments for high patient satisfaction scores and not wasting money duplicating processes and services.

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Hospitals taking action now are striving to provide reliable, exceptional quality-care to improve health outcomes and an important aspect is forming new relationships with health organizations. When asked how health reform impacted his organization, John Kelly, chief of staff and chief patient safety officer of Abington Memorial Hospital said, “Our approach has been to look for all the necessary partnerships within our community of providers to come to a better rationalization of care.”

Healthcare partnerships can come in many forms, from Accountable Care Organizations to Value Based Purchasing, but what’s important is maintaining the health of the patient across the continuum of care. From hospital admission, to follow-up services performed, to at-home care, hospitals are tracking patients through each cycle in their care to reduce costly avoidable readmissions and to make the patient healthier and happier.

From a medial real estate perspective hospitals are already acquiring physician practices to help smooth coordination and focus on outpatient care. In 2011, there were 107 physician group merger and acquisition deals, up from 67 in 2010, according to Irving Levin Associates, Inc. Likewise, according to the ASHE 2011 Construction Survey, 16% of hospital executives indicate future projects for them are outpatient facilities in neighborhood settings. The need for cost effective high quality care is greater than ever and hospitals and health systems embracing this need will benefit no matter how the Supreme Court rules on health reform.



James Ellis, CEO, Health Care Realty Development Company, is a nationally recognized successful real estate investor and developer of medical office properties with a comprehensive knowledge of sophisticated real estate transactions, cost effective designs, and efficient property management.


Aaron Razavi is Associate Marketing Director at Health Care Realty Development.



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