Healthcare reimbursement represents an increasing percentage of federal and state budgets and governments will continue to place downward pressure on reimbursement for medical services. The healthcare industry has become increasingly visible as a percentage of U.S. Gross Domestic Product, which will continue to drive more regulation, increased enforcement, and higher compliance risks/costs. Healthcare Reform will provide increased access to medical care for millions, increasing both demand and utilization.
A growing and aging population will also drive significantly increased demand for medical services. These and other factors make it even more difficult for hospitals and physicians to remain in their traditional service silos. We believe these changes in healthcare are irreversible. As the resulting consolidation spreads, there will be fewer independent medical providers, employed physicians will increasingly dominate medical staffs and competitive lines will be drawn and rarely crossed. Independent providers that try to remain neutral will be marginalized by larger integrated healthcare delivery systems wherein patient referrals are directed in order to leverage payer negotiations, to generate capital, to share risk and to coordinate care.