When pursuing an online Master of Business Administration with a focus on health care, you’ll find yourself learning more about trends in health care and hospital finance. Understanding the financial side of health care is essential if you plan to have a career in its management and administration. This includes knowing about past financial trends in health care, as it may help you better understand how to handle current and future financial matters in the industry.
Health care is constantly evolving, and sometimes changes happen very quickly. These changes can directly impact the financial side of care delivery. The best way for health care professionals to ensure that these changes don’t have a negative effect on a facility’s bottom line is to pay strict attention to where health care finance has come from — and where it’s going. This includes the examination of past, present, and future financial hospital trends.
Past Trends in Health Care Finance
One past example of the volatility in health care finance is the implementation of the Affordable Care Act (ACA), which was enacted in 2010. In the years following the ACA’s implementation, health care finance professionals were faced with a host of economic challenges directly associated with a proliferation of overdue and unpaid health care bills and high deductibles among select patients. This created a ripple effect that led to secondary issues, such as health care providers raising their fees and an increase in the number of patients asking for charity-based care.
While the ACA may be the most visible piece of legislation directly impacting health care facilities’ bottom line, it wasn’t the only one. Legislative changes such as the Electronic Health Record Incentive Program, the Bipartisan Budget Act of 2015, and updates to the World Health Organization’s classification of diseases had a direct impact on medical billing and finance systems.
While these components affected facility finances, savvy health care financial professionals who paid attention to these trends could build financial strategies that minimized their overall impact. By doing so, they could’ve also helped facilities adhere to the health care trends associated with these pieces of legislation with greater efficiency.
Current and Future Hospital Trends
Past trends in health and hospital finance still shape health care today. They combine with emerging and projected trends to create a unique financial landscape that requires individuals with deep financial knowledge and a keen sense of business operations to help navigate facilities through the industry’s financial challenges.
Ongoing Tech Adaptation
The health care industry continues to push toward tech-driven innovations, and they show no signs of slowing down. For instance, the publication Healthcare IT News predicts that hospital spending on electronic health record (EHR) tech will reach $9.9 billion by 2024. Additionally, the move toward tech innovations like telehealth systems can also strongly impact health care finance, although establishing such systems may prove to be cost-effective in the long run.
Increased Drug Prices
Increases in spending on prescription drugs remain an ongoing issue for hospital finance. According to a report released by GoodRx, 67 brand-name drugs increased their price by an average of 3.6% from January to July 2020. GoodRx also reported in 2020 that drug prices had increased by 33% since 2014, outpacing any other commodity or service during that time.
Medications are already a huge percentage of overall health spending, and this percentage is expected to grow in the coming years. As both generic and specialty pharmaceutical drugs continue to rise in price, these increases will continue presenting major financial challenges to hospitals in 2021 and beyond.
The Aftermath of COVID-19
The impact of the coronavirus pandemic will likely resonate within the health care industry for years after the immediate effects of the pandemic subside. COVID-19 disrupted hospital finances severely, causing estimated aggregate losses of $323.1 billion in 2020, according to a report from the American Hospital Association (AHA). The consequences of the virus touched several operational aspects of health care, such as the impact of delayed care and neglected preventive care, declines in insurance enrollment due to increased unemployment, and delays in elective surgeries.
Answering the Call for Hospital Finance
Health care spending will always pose challenges that can be tough to overcome if a facility isn’t financially prepared. A skilled health care finance professional can be vital to helping a facility prepare for these inevitable fluctuations and can help the facility provide optimal patient care regardless of the circumstances.
The George Washington University online Healthcare Master of Business Administration (MBA) program can give you the skills and education needed to be such a professional. The program’s coursework features both business and health subjects to help you gain administrative and leadership expertise in a health care context. Discover how GW can help you toward professional success in health care and hospital finance.