Cost control is top of mind for healthcare CEOs in 2018
The No. 1 concern for healthcare executives is cost control, according to Advisory Board’s Annual Health Care CEO Survey. The response was a marked change from previous surveys, marking the first time cost control topped the rankings.
“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,” Christopher Kerns, executive director, research at Advisory Board, said in a statement.
The survey, which is conducted annually to identify top strategic issues among Advisory Board’s hospital and health system members, gathered responses from 146 C-suite executives from December 2017 to March 2018.
The top five “areas of extreme interest” to executives identified in 2018 were:
- Preparing the enterprise for sustainable cost control (62 percent)
- Innovative approaches to expense reduction (56 percent)
- Exploring diversified, innovative revenue streams (56 percent)
- Boosting outpatient procedural market share (50 percent)
- Meeting rising consumer demands for service (50 percent)
Cost control was ranked as the top concern among 33 topics in the survey by 62 percent of executives—more than any topic in the last four years and 5 percent more than any topic in 2017.
Increased competition from outside entities, such as Amazon, is adding to cost control anxieties, the survey found.
“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,” Kerns said.
The top five areas of interest in 2018 replaced the top five for 2016, while “meeting rising consumer demands for service” was one of the fastest-rising responses, moving from No. 10 in 2017 to No. 5 in 2018. Revenue streams and market share have consistently remained near the top for the past two years in the rankings.
The Advisory Board is research, technology and consulting business of health services company Optum.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."