Summary:
This year B.E. Smith provides its most comprehensive trend analysis as a result of its annual Healthcare Leadership Intelligence Report. This year’s report is significantly expanded, surveying nearly 1,200 healthcare leaders across four topics: Industry Trends, Workforce Recruitment and Retention, Leadership and Career. Through results interpretation, independent research and insights from its Interim Leadership practice, B.E. Smith has distilled 11 impact trends expected to command executive attention in 2016.
Overview:
Overall healthcare spending grew by 5.5% for the year October 2014 to 2015, propelled especially by prescription drug increases.1 This rate is consistent with the CMS forecast of 5.6% average annual spending growth through 2022. Healthcare also realized an increase in job growth in 2015. Year-over-year Industry job growth accelerated 3.3% in the third quarter of 2015, outpacing the average 2% growth since 2013. Hospitals are the main driver of the health sector’s increased hiring, climbing from job losses in 2013 to a gain of more than 60,000 jobs in the third quarter of 2015.3
The desire to contain healthcare spending growth is accelerating the shift from volume-to-value as the dominant reimbursement model. This drive is clearly demonstrated by the Department of Health and Human Services (HHS) push towards greater value-based purchasing. HHS has set a goal to have 30% of Medicare payments in alternative payment models by the end of 2016 and 50% by the end of 2018. These alternative payment models included population-based payment as well as fee-for-service payment which is linked to effective population management or episode of care. Non-profit hospital revenue is expected to grow in the 3.5% to 4.5% range but industry profitability remains pressured: “17% of hospital, system and physician practice providers said they expect a big drop in operating income” from value-based contracting.5 Rural hospitals are especially challenged. A recent estimate places 13% at risk of closure.
B.E. Smith’s intelligence report revealed fully two-thirds of healthcare leaders are optimistic about the overall outlook for the coming year. This is a healthy uptick from last year which showed a split. While optimistic, respondents overwhelmingly count financial pressure (41%) and government regulations (40%) as 2016 potential stumbling blocks on the road to success. Uncertainty regarding the 2016 presidential election is also front and centre for healthcare leaders who monitoring potential policy changes, including tax exemptions and payment cuts.7 Other studies cite organizational barriers to collaboration and physician buy-in as additional disruptors to strategic direction.
