This Industry Outlook is a portion of the 2019-2020 Arizona CFO Spotlight Survey Report
Levels of Optimism: Moderate
In the years since we first conducted the Arizona CFO Spotlight Survey in late 2016, outlooks and optimism for the healthcare industry in Arizona have been mixed. About one-third of leaders anticipate less revenue in 2019 as they grapple with staffing shortages, regulatory costs and changing payer reimbursement models. Specialty health care services have more optimism, including mental health and orthopedic therapy providers. These providers report that health care insurance payers are beginning to cover services not covered in the past. Patients are also choosing to pay out-of-pocket for emerging treatments that aren’t covered by insurance, including therapies that can be alternatives to surgery.
There are signs of increasing mergers and alliances between health care providers that, when successful, allow for more negotiating power with payers and more diverse, ancillary services.
According to health care M&A consultancy Irving Levin Associates, 2018 saw a record number of publicly announced transactions, primarily in skilled nursing and senior housing properties. Deal value, however, was dominated by hospital mergers and long-term care facilities, according to a Q3 deal report by PriceWaterhouseCoopers (PwC).
“The biggest opportunity for us is automation: patients can check in before they show up, follow a link and answer health questions and make automated payments. That way, you just come in and see the doctor, and the follow-up communication and patient surveys are automated, too.”
Health Care CFO, Tucson, 2019
Changes in healthcare practices, delivery, billing and reimbursements have created uncertainty among CFOs and other health care leaders. One major shift is from a fee-for-service model to a fee-for-value model with payments based on the entire continuum of care. This shift demands an increase in collaboration among differing practices, including the need to hire specialty practitioners. In this environment, health care leaders anticipate an average growth rate of 11 percent in 2019, similar to this sector’s growth in 2018.
To offset talent shortages and regulatory costs, health care providers are investing in productivity technologies that include ERP systems and patient point-of-contact systems. They hope these investments will create efficiencies such as automating scheduling and streamlining follow-up care processes. Health care leaders express a common challenge with finding enough talent to fill positions for patient intake and follow-up scheduling, which these technologies may alleviate.
For example, a Phoenix-based Accountable Care Organization (ACO) called Arizona Care Network launched a blockchain wallet solution for mobile devices that can help physicians and patients streamline benefits administration and appointment scheduling. Leaders are carefully watching solutions like these to determine the best fit for their organizations. Due to regulatory concerns, they must be careful with how and when they adopt new technologies for patient care, such as remote telemedicine solutions.
Reputation management is a high concern, with the increase in online reviews influencing patient choice of health care providers. Statistics from reputation management solutions providers cite that, on average, 60 – 80 percent of patients pay attention to online reviews when considering their health care providers. In response to this as well as outcome-based care requirements, providers are investing in patient follow-up improvements, surveys and other digital reputation management tools to track patient satisfaction through the continuum of care.