There are some interesting trends that will impact career management strategies over the next five to seven years.
If you are someone who isn’t comfortable with change, now is the time to recalibrate your perspective and begin to prepare yourself for an entirely different career track.
Consider these developments.
- More than 1,2o0 hospitals have merged since 1994
- Between 2010 and 2014, there have been more than 457 hospital mergers. That number will continue to expand as hospital executives attempt to find a safe harbor and spread the perceived risks
- Consolidation has reached a point in some markets — now dominated by two or three organizations — that the drumbeat for spreading risks and protecting profit margins will drive mega mergers. This will further exacerbate the consumer price issues and reduce the number of potential executive positions, assuming the Federal Trade Commission (FTC) does not continue with its increasingly aggressive anti-merger profile
- There has been a 32 percent increase in the number of physicians who are now employed by hospitals. That number will continue to grow exponentially as insurers move away from fee-for-service payment models
- Reduced competition in metropolitan markets produces higher prices for consumers and fewer jobs for executives
- Consolidation tends to negatively impact innovation and improvements in quality of care, patient safety and consumer satisfaction
When you analyze the market conditions, the drivers of this consolidation appear to be:
- For hospitals – enhanced bargaining power for negotiations with insurers
- For physicians – a move away from fee-for-service, the advent of bundled payments and the expanding realization that hospital employment is the protection for financial security
The historical fact is we have all been down this road before. The lofty predictions of hospital executives and board members promoting the value of these consolidations rarely produce the results they tout. Bigger is not always better. Small and nimble is sometimes a better way to ride out the market uncertainty and even prosper in turbulent times.
Wishing that things will return to the old days is not even remotely a realistic career management strategy. Healthcare executives need to look to the future, to anticipate the skill sets they will need in an environment of value-based reimbursement, community medicine and population health management.
The the traditional job security of brick and mortar organizations will not be so secure.
By the way, when it comes to making critical career choices, I wouldn’t depend on the FTC to be your patron saint.