Hospital CEOs focus on revenue growth over cost containment, according to new survey

Revenue growth has surpassed cost containment as the top strategic priority for health executives in 2019, according to the latest survey from the Health Care Advisory Board.

In fact, whereas cost control was the leading concern for these hospital and health system executives in 2018, the Advisory Board Research Annual Health Care CEO Survey of 90 C-suite leaders found them more focused on areas of business expansion this year.

WHY THIS MATTERS

For hospital and health system executives, increasing ambulatory access -- adjusting facilities and processes to boost access to outpatient care and capture maximum revenue -- was at the top of a list of 29 health care topics, with 57 percent saying it was an area of "extreme interest." Other concerns included minimizing unwarranted clinical variation (53 percent), which can help cut costs, and strengthening primary care alignment (53 percent), which can drive growth. Rounding out the top five were redesigning health system services for population health (52 percent) and innovative approaches to expense reduction (51 percent).

Elsewhere, 21 percent of respondents identified revenue growth as their single top priority, followed by population health and Accountable Care Organization strategy (20 percent). Cost containment, physician network alignment and systemness were tied for third place with 13 percent each.

THE LARGER TREND

The Advisory Board survey supports other recent analyses pointing to a growing emphasis on outpatient care, the importance of improving the hospital-physician relationship, and deepening interest in population health.

And taken together, the last few CEO Surveys reveal the shifting sands on which hospital executives stand. Only one of the top five areas of interest from 2018 ranked among the top five this year (innovative approaches to expense reduction). Last year's leading concern, "preparing the enterprise for sustainable cost control," fell to number 11 out of the 29 topics included in 2019. Meanwhile, the number one strategic focus, increasing ambulatory access, topped the list in 2017 and again this year.

ON THE RECORD

"Health systems have not given up their keen eye on improving cost control, and yet C-suite executives recognize the need for comprehensive margin management strategies that include revenue growth," said Christopher Kerns, executive director, Research at Advisory Board. "Balanced strategies are the key to achieving financial viability and securing the strategic flexibility necessary to respond to new market entrants and disruptors."

Deirdre Fulton is communications professional and freelancer based in Maine.
On Twitter: @deirdrefulton