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Industry Survey

HealthLeaders Media Staff, February 13, 2011
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Concerns about healthcare reform legislation dominated the 2011 HealthLeaders Media Industry Survey. In the annual survey, the top leaders of healthcare organizations nationwide shared their opinions about the challenges they face in the upcoming years in the era of healthcare reform.

One of the keys to understanding the mood of senior hospital leaders comes from examining an important disconnect that perhaps to some degree mirrors the lack of understanding among voters about what the Patient Protection and Affordable Care Act will and will not do. Leaders at the nation’s hospitals and health systems certainly are a more sophisticated lot than rank-and-file voters who do not have a deep understanding of healthcare’s challenges in cost escalation, overutilization, and uneven quality.

However, that does not mean healthcare leaders aren’t susceptible to distorted views about the industry or their institution’s role in it. In fact, the survey results suggest their opinions reflect a certain level of perception inflation.

What that means is that senior leaders overwhelmingly think their organization is on the right track toward achieving the goals that health reform sets out to meet, but they are more than a little skeptical about where their peers are on the problem-solving continuum.

“I do think that’s fascinating,” says Deborah Zastocki, president and CEO of 245-staffed-bed Chilton Hospital in Pompton Plains, NJ. “Their organization is okay, but they’re not sure about the rest of the country.”

Part of that disconnect could stem from familiarity, she says. “Perhaps it’s saying, ‘I have a strategic plan, and I’m maintaining flexibility and adaptability to the changing healthcare landscape.’”

Similarly, top leaders in healthcare organizations seem ambivalent about the role accountable care organizations are going to play in the new environment as it evolves. For instance, 41% of CEOs and other top executives answered “neutral” when asked how ACOs will affect these executives and their organizations over the next three years. Still, 45% said they thought ACOs would have a positive or strongly positive effect on their organization. However, much still needs to be made clear about how ACOs should best be constructed. “Everyone thinks they know what a unicorn looks like but no one’s ever seen one,” Zastocki quips. With ACOs, “it’s hard to know if you’re on the right track.”

The message about doing more with less in the future is one that isn’t lost on the majority of CEOs who participated in the survey, however. That’s borne out in that cost reduction was the top focus of senior leaders, with quality and patient safety second, reimbursement third, and patient experience and satisfaction a close fourth.

“What is so clear to us is that no matter what happens with healthcare reform, there has been a fundamental change in the business model,” Zastocki says. “How we go about adapting will be the challenge going forward.”

Tomorrow’s priorities

Quality leaders: Quality and patient safety still are cited as the No. 1 priority, but this year just 58% of quality leaders ranked it among their top three priorities, down from 65% in the 2010 survey and 84% in the 2009 survey.

Finance leaders: Cost-cutting is the top priority for 2011 and beyond, thanks in part to the fact that 59% of finance leaders say the reform act will have a weakening effect on their financial position.

Technology leaders: IT staff and budgets are two areas that seem unaffected by the recent poor economy; technology leaders project continued growth.

Nurse leaders: Nurse executives’ top priorities are their organization’s patient experience and satisfaction along with quality and patient safety.

Community and rural leaders: Physician recruitment and retention continues to be among the top three priorities for rural providers, though less so than last year when 44% cited it compared to 30% in the 2011 survey.

Physician leaders: As a group, they expressed general enthusiasm about the ACO concept, with 49% saying that ACOs would have a positive or strongly positive impact on their organization. About 15% were negative or strongly negative; 35% were neutral.

—Philip Betbeze
 

Leadership: A Disconnect in Perceptions

A big disconnect exists between the way top healthcare leaders view themselves and their organization compared to the rest of healthcare. Perhaps it shouldn’t be surprising that senior leaders don’t blame themselves or the people they work with for healthcare’s myriad problems with cost escalation, overutilization, or poor-quality services. That kind of thinking is human nature. But the width of the divide is troubling for an industry that threatens the long-term stability of the very economy on which we all depend. 

In the annual 2011 HealthLeaders Media Industry Survey, the top leaders of healthcare organizations nationwide shared their opinions about the challenges they face in the upcoming years.

As an example of the perception inflation, 75% of respondents said their organization was on the right track, while just 23% say the healthcare industry itself is on the right track. Meanwhile, some 81% of senior executives thought their organization’s medical quality was strong or very strong, which may indicate that senior leaders are getting a dose of realism, at least in how they view themselves; in last year’s survey, more than 91% of senior executives said their medical quality was strong or very strong. 

“This is likely an overestimate of strength,” says Mark Laney, MD, president and CEO of Heartland Health, an integrated delivery system in St. Joseph, MO. “Everyone can’t be in the top quartile. Are they truly confronting the brutal facts around their own organization, or is there some denial?”

Laney suggests some respondents are deluding themselves if they think their quality and safety is that great. “When you look at the numbers, are you in the top decile?” he asks rhetorically.

“The fact is most organizations don’t have top-decile quality and safety, most are not anywhere close to being prepared to launch an ACO, and the healthcare world is going to change because the current trajectory is simply unsustainable.” 

Other answers reflect a passive attitude about health reform, Laney says, and he was frustrated by a 41% neutral score on a question that asked how ACOs will affect these executives and their organizations in the next three years. He says many respondents are in denial in that they probably believe the Patient Protection and Affordable Care Act will be delayed or overturned, so waiting is viewed as the prudent option over investment in goals that are not yet finalized.

“This represents a major denial of how significant ACOs will really be and the lack of ability for many organizations to actually create an ACO.”

The message about doing more with less in the future is one lesson that isn’t lost on the majority of senior leaders who answered the survey, however. When looking at a list of organizational priorities to rank, cost reduction was ranked the highest priority with 35% picking it as one of their top three
priorities. That’s the same percentage as in last year’s survey, when cost reduction was ranked third overall, edged out by quality/patient safety and physician recruitment/retention. For the 2011 survey, quality/patient safety ran a close second, at 33% (down from 40% who cited it as a top-three priority last year). Patient experience/satisfaction was third at 27% (down from 34% last year, but up from the fourth-place ranking).

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