Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services
Hospitals and health systems are steadily implementing cost reduction efforts to mitigate the growing costs associated with providing care in today’s healthcare environment. While healthcare spending has continued to grow in recent years, the COVID-19 pandemic intensified the need for providers to reduce costs, as clinical and operational departments were challenged. The American Hospital Association’s October 2021 Cost of Caring report highlights the current trends driving up healthcare services and accordingly, costs. These include: increased use of care as more people have insurance, an aging population needing care, the significant amount of the population diagnosed with chronic conditions, and demand for new technology investments.
In the months ahead, we expect hospitals and health systems to adapt as they always have, by seeking methods to lessen the financial impacts from the pandemic. This will include both traditional methods such as vendor renegotiations and workforce optimization, and creative methods such as asset optimization and ambulatory access. As value-based care becomes more crucial, consolidation within the industry is imminent.
