Annual Health Care CEO Survey: Cost Control is Top Priority for Hospital Executives
July 11 2018 - 9:00AM
Business Wire
- Advisory Board survey reveals sustained
interest in nontraditional revenue growth, including direct
employer contracting
- Top two areas of concern among health
care CEOs were about reducing costs
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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Advisory BoardPete Simpkinson,
202-266-6645SimpkinP@advisory.com
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