H-Source Blog


What's Coming in 2019?

by H-Source on 01/31/2019

With the healthcare environment what it is – small margins, rising costs, and plenty of complexity – what will 2019 bring?

The not-so-great news is this probably isn’t going to get any easier. We’ll see more hospital closures due to financial performance. We’ll see some innovation in new services, like telehealth, especially in rural areas, to try to blunt the impact of rising costs and declining reimbursements.

But we can’t “revenue” our way out of financial difficulties. At an estimated average profit margin of 1.8%, it takes $56 in revenue to earn $1 in profit. That’s $5.6M in revenue to earn $100,000 in profit.

As a result, we’re likely to see renewed focus on expenses, particularly supply chain, which is on pace to surpass labor as the number one overall expenditure by next year. We have to find ways to cut back on the amount of wasted inventory and recover costs on old capital equipment.

That leads us to technology. We’re going to see greater adoption of technology that enables collaboration and gives greater visibility into supply chain costs. We need to do a better job of merging data silos for more complete costs analyses that drive better purchasing decisions.

Read the full article, "In 2019 Hospital Groups Must Adapt to Changing Conditions in Order to Thrive" by H-Source CEO John Kupice.