Healthcare Providers' Capital Spending Growth Expected to Dip in 2014

, November 25, 2013

From the uncertainty surrounding health insurance exchanges and the anticipated influx of newly insured patients to RAC audits and the controversial two-midnight rule, providers are feeling the financial squeeze from all sides right now.


Area of largest capital investment by healthcare providers

Source: Premier online survey for Economic Outlook, Fall 2013

As healthcare providers brace for the impact of new payment models, many hospitals and health systems are curtailing capital spending plans for 2014.

So says the Premier healthcare alliance in its Fall 2013 Economic Outlook for which it surveyed 426 respondents, primarily C-suite executives and materials and practice area managers. The report finds that growth in health system capital spending in 2014 is expected to be below 2010 levels. Only 36.8% are projecting an increase in capital spending next year, down from 42% in fall 2010, while 42.2% anticipate a decrease, up from 26% in fall 2011.

"We've been helping our member hospitals prepare for this type of environment for some time now, so these results come as little surprise to us," says Durral Gilbert, Premier's president of supply chain services. "For providers, the key is ensuring they use the right product, with the right patients, in the right way, to get the right outcomes."

These survey results don't seem unexpected to me either. As I speak with CFOs and finance executives from healthcare providers around the country, I hear all kinds of reasons why hospitals and health systems might want to hold back on their spending plans, at least in the short term.


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