Cost-cutting is a reality for health care institutions around the area next year as they deal with projected cuts in Medicare funding on the federal and state levels, Diamond said.

The state of Indiana said it will cut Medicaid funding to hospitals because of lower-than-projected revenue intake, and health care legislation in Congress is expected to cut Medicare funding by $500 billion over the next several years, Diamond said. The only ways to react to the situation is not expanding program offerings and reducing spending to only what is necessary. The impact of the health care legislation won't be felt until 2013, Diamond said.

"We have no choice," he said. "We have to reduce our costs. There are more people who are demanding services from us, and there are fewer dollars to go around."

Tough economic conditions have dampened his 2010 outlook, but Diamond said he's encouraged about the potential for advances in science and technology to bring new treatments and medical approaches to communities.