World News: 14:00 GMT Wednesday 11th July 2018. [Optum via Businesswire via SPi World News]
Cost control has eclipsed revenue growth as the top priority among health system CEOs, according to Advisory Board’s Annual Health Care CEO Survey. While interest in revenue growth remains high, both of the top areas of concern were related to cost structure and management.
The new No. 1 concern for hospital executives is preparing the enterprise for sustainable cost control, according to the nationwide survey of 146 C-suite executives conducted between December 2017 and March 2018. This top concern made its CEO Survey debut this year, and 62 percent of executives said they were extremely interested – more than for any topic in at least four years and 5 percent more than for any topic in 2017.
C-Suite executives voted innovative approaches to expense reduction as the No. 2 topic for the second year in a row.
“Health system CEOs recognize that any effective growth or financial-sustainability strategy must be built on a competitive cost structure in order for their enterprises to deliver high-quality, cost-effective care to the patients they serve,” said Christopher Kerns, executive director, Research at Advisory Board. “The entrance of nontraditional health care providers, such as retailers and consumer-focused imaging and surgery centers, adds to the urgency of health systems improving cost structures, sometimes radically so, such as redesigning staffing models, rationalizing service lines across their market, and even transforming their facility footprint.”
The survey asked executives about their level of concern for 33 topics, including building an agile enterprise, strengthening primary care alignment and developing a robust cybersecurity strategy. The Top 5 areas of extreme interest to hospital and health system executives are:
1. Preparing the enterprise for sustainable cost control (62 percent)
2. Innovative approaches to expense reduction (56 percent)
3. Exploring diversified, innovative revenue streams (56 percent)
4. Boosting outpatient procedural market share (50 percent)
5. Meeting rising consumer demands for service (50 percent)
None of the Top 5 areas of interest from 2016 ranked among the Top 5 for 2018. One of the fastest-rising topics was meeting rising consumer demands for service, which surged from No. 10 in 2017 to No. 5 this year.
The number 3 and 4 areas of extreme interest for 2018 have ranked near the top for the past two years, showing CEOs’ sustained commitment to hospital and health system growth, albeit in new directions.
“Health systems and community hospitals alike have expanded their ambitions for growth to now include nontraditional sources of revenue growth, such as contracting directly with employers, commercializing intellectual property and launching innovation hubs,” said Rob Lazerow, managing director, Research at Advisory Board. “This interest contrasts with relying solely on conventional channels for securing market share, such as competing for referrals from independent physicians.”
Advisory Board’s membership includes many of the largest and most progressive hospitals and health systems in the United States. Survey questions are based on Advisory Board’s more than 10,000 annual research interviews with health care executives.
For further insight into the topics of greatest interest to hospital and health system leaders, visit the Advisory Board’s At the Helm blog. Health Care Advisory Board members who could not attend the 2017-18 National Meeting Series can view a webconference recapping insights on top concerns for health system C-suite executives.
About Advisory Board
Advisory Board is a best practices firm that uses a combination of research, technology, and consulting to improve the performance of 4,400+ health care organizations. An Optum business, Advisory Board forges and finds the best new ideas and proven practices from its network of thousands of leaders, then customizes and hardwires them into every level of member organizations, creating enduring value. For more information, visit www.advisory.com.
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Business Wire: 14:00 GMT Wednesday 11th July 2018
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