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Healthcare CEOs Focusing on the Now

 |  By Philip Betbeze  
   February 12, 2010

Here's a statement that should get your attention: CEOs are less concerned about quality and patient safety this year than last year. Actually, that broad conclusion is tough to draw from the data contained in the HealthLeaders Media Industry Survey 2010, which went live on our site yesterday. But what's clear is that long-term goals are dropping in importance in favor of initiatives that can bring near-immediate returns.

Without a doubt, CEOs are spending more of their intellectual capital this year on patient experience/satisfaction as well as cost reduction, according to the survey.

CEOs, obviously, drive their organizations, so what they say about their priorities carries a lot of weight. We actually asked CEOs to rank their top three priorities for the next three years, and what came back showed us that CEOs, perhaps in light of the turbulent economic times, are trimming back the importance they give to quality and patient safety (only 39.5% selected it this year, compared with 69% in 2009) while patient experience/satisfaction (33.98% vs. 25%) as well as cost reduction (35.36% vs. 19%) recorded big increases.

Interestingly, physician recruitment and retention dropped from 43% in 2009 to 35.36% for 2010. So what conclusions can we draw from this data? Perhaps CEOs feel like after years of concentration, their quality levels don't need as much attention. Perhaps more of them have achieved their short- and medium-term goals with physician recruitment.

But in the bigger picture, quality still leads the herd, and physician recruitment isn't far behind. They just have much less of a commanding lead than they did before. I think some areas simply have improved so much that they aren't highest priority anymore, at least at the top levels of the organization. That certainly seems true for revenue cycle, for example, which only 7.73% of CEOs ranked as among their top three priorities for 2010, compared with 23% in 2009.

But I think there's something else at work here. Short-term thinking has invaded the decisions emanating from the C-suite.

On first glance, that seems myopic. But it's not necessarily a bad thing: Sometimes a crisis requires you to dramatically shift your priorities, and if 2009 wasn't a crisis year with the recession and healthcare reform looming on the horizon, I don't know what would qualify. For example, physician recruitment is a long-term investment in a single human being. Improving quality also takes time, and while it generates an ROI, its ROI doesn't flow directly to the bottom line.

Banner Health, for example, spent big bucks on driving quality at their organization. They don't regret it. In fact, their quality scores in the obstetrics department recently meant they could reduce their reserves for malpractice to near zero for 2010. But it took at least three years of low or no claims to make the actuarial team comfortable with reducing those reserves and letting them flow to the bottom line.

CEOs in 2010 don't necessarily have that luxury of waiting for results, no matter how impressive they might eventually be. And that's the key for CEOs in 2010. They want to expend their energy on initiatives that bring immediate or near-immediate return because frankly their jobs, the jobs of others in the organization, and in some cases, their hospital's existence, are on the line.

Obviously, this is just very narrow snapshot of the wealth of information available in our survey. I encourage you to spend a half-hour on it in the next week or so. We've broken the results down by pillar, meaning there's one for CEOs, one for quality, one for CFOs, etc.

I've focused here on one question from the CEO pillar and have been able to draw several conclusions from it. But there's a story behind every question and knowledge to be gleaned from every pillar. Delve into the survey's findings now. You won't be sorry.

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Philip Betbeze is the senior leadership editor at HealthLeaders.

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