Declining reimbursement will demand innovative delivery methods.

In summary, hospitals will have to find innovative ways to secure market share as federal reimbursement continues to decline and the commercial insurance industry rebels against the cost shifting burden that is being placed on it. Hospitals can also expect increasing pressure to control costs if inflation rates continue to moderate but hospital expenses exceed the current inflation rates. All in all, the reimbursement system will undergo severe "belt tightening," which will force hospitals to change their product mix; accept new payment systems, such as capitation; and reduce expenses in order to achieve profitable operating margins.