90% of healthcare leaders view cost cuts as a top priority, 3 other findings
Written by Kelly Gooch |
November 09, 2018 |
As healthcare leaders seek to grow their organizations, cost reduction is increasingly a priority, according to a report from Hammond Hanlon Camp, an independent strategic advisory and investment banking firm, and The Health Management Academy, a network of healthcare executives.
For the report, researchers conducted surveys of senior leaders from some of the nation’s largest health systems, including Salt Lake City-based Intermountain Healthcare, Dallas-based Baylor Scott & White Health and Boston-based Partners HealthCare. Surveys took place from January 2016 through December 2017, and the number of respondents varied by quarter, with 20 to 26 senior leaders — one per health system — responding to each survey.
1. Nearly all respondents (90 percent) said cost reduction is a high priority or very high priority — and 88 percent of respondents said it increased as a priority from 2016 to 2017.
2. Respondents reported an average operating margin of 3.69 percent in 2017, compared to 3.98 percent the year prior.
3. When surveyed last year, nearly half of respondents (47 percent) said they expected their organization’s operating margin to decrease this year, leading 67 percent of respondents to say they anticipated making cost reduction more of a priority this year than last year.
4. Most respondents are focusing on reducing costs in areas such as labor (68 percent), supply chain (42 percent) and pharmacy (42 percent), the report stated. But other areas on their radars include revenue cycle, post-merger integration, medical spend, infrastructure and system/corporate services.
Researchers said respondents indicated they are not focusing cost-reduction efforts as much on existing health IT systems, but nearly all expected to expand their organization’s use of telehealth services.
Access the full report here.
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