Healthcare execs put HIT first on list of what they plan to spend money on in 2014

Move over MRs and CTs, surgical robots and new facilities. According to Premier Inc.’s spring 2014 Economic Outlook C-suite survey, this year’s top investment priority for the healthcare C-suite crowd is healthcare information technology (HIT).

Premier surveys executives within its alliance of 3,000 U.S. hospitals and 110,000 other healthcare providers on a quarterly basis to identify emerging economic and industry trends. A total of 127 executives — primarily CEOs, chief financial officers and chief operating officers — from 112 hospitals and health systems of various sizes and types across 32 states participated in the latest survey, representing a 5 percent response rate.

Nearly half of the 127 executives indicated that they plan to spend the largest amount of their capital improvement budgets on HIT in the coming year. This includes investments in electronic health records (EHRs), advanced data analytics and telecommunications. A little less than a quarter (22 percent) said they planned to make their largest investments in clinical equipment (surgical, imaging and laboratory).

“Hospitals are making necessary investments in infrastructure to meet the demands of this new generation of healthcare,” noted Michael J. Alkire, Premier’s chief operating officer, in a press release. “These investments are targeting HIT to provide more connected and efficient patient care, and modern clinical equipment that can deliver improved outcomes.”

However, the survey also indicated that the drive to invest in HIT may be because executives believe they must invest in this area, and not because they are genuinely excited about the types of HIT products currently on the market. Among the survey respondents 41 percent indicated that they were either dissatisfied or indifferent in regards to their current EHR systems. 

“What we are hearing increasingly from healthcare leaders is dissatisfaction with their existing EHR systems, often citing cost and difficulty of use,” Alkire stated. “Providers need a solution that integrates clinical, financial and operational data across their hospitals and health systems; the majority of EHR systems cannot do that.”

The survey also showed that payment cuts and increasing labor costs were big concerns for healthcare executives. Of the executives surveyed, 42 percent said labor was the biggest driver of costs in their organizations and 34 percent said that healthcare legislation and mandates was the biggest driver of costs.

In addition, the executives seemed to be waking up to the fact that it will likely be a long time before HIT is advanced enough to create the types of efficiencies that will reduce labor and regulatory costs. Instead, significantly more respondents (27 percent in the spring 2014 survey vs. 17 percent in the fall 2013 survey) now list HIT as the biggest driver of costs in their organizations.

Finally, the national shortage of clinicians was an oft-cited concern. Three out of four providers reported experiencing physician or nurse shortages, with 42 percent experiencing shortages in more than one practice area. Among those experiencing shortages:

• Almost four out of five executives had primary care physician shortages.
• 47 percent of respondents had specialty physician shortages.
• 28 percent of respondents had nurse shortages.

An additional trend the report identified included the drive to reduce costs through standardization of the products stocked across systems, with fewer similar products by different suppliers, fewer physician preference items and a reduction in the total number of supply vendors the organization would deal with as a whole. A full 42 percent reported putting resources into this type of supply chain standardization effort.

Concern about what will happen with uninsured patients also grew as government help with these costs will begin to dry up in 2019 as the Affordable Care Act is rolled out and more patients gain either private insurance or become Medicaid eligible. In the spring survey, the percentage of executives citing uncompensated care increased for the first time in two years.

Finally, compared to the spring Premier survey two years ago, twice as many executives listed provider consolidation as a trend that was impacting them.