Beacon Partners study uncovers how healthcare organizations impacted by economy

Healthcare management consulting firm Beacon Partners recently conducted a study of healthcare executives nationwide resulting in over 200 responding to a survey uncovering how their healthcare organizations have been impacted by the economy.

“The survey results show that at a time when IT infrastructure investments are needed, the unstable economy has made it challenging for healthcare organizations to make those investments”

The survey revealed 50% of the participating healthcare organizations have had to cut back on IT investments due to the sour economic climate and reduced access to credit markets for financing.

"The survey results show that at a time when IT infrastructure investments are needed, the unstable economy has made it challenging for healthcare organizations to make those investments," said Ralph P. Fargnoli, Jr., president and CEO of Beacon Partners. "It's ironic that these organizations first have to spend money they don't have in order to receive future ARRA incentives, which, once received, won't cover their full investment. On top of this, healthcare reform legislation changes are expected down the line. Many healthcare organizations are uncertain as to how to make it all come together in time."

In fact, to make their budgets work, 80% of respondents have reduced capital expenditures and more than 40% have cut costs by reducing staff. As a result, employee turnover has increased by almost 38% due to the many negative moves the participating healthcare organizations have had to make as a result of economic pressures.

The study also found that over 80% of the healthcare organizations surveyed have completed strategic plans within the previous 18 months.

Not surprisingly, the disproportionate amount of uncompensated care was the single biggest ongoing problem that participating healthcare organizations are confronted with.

"It's interesting that while healthcare reform is on the one hand fueling the need to have strategic plans in place, it's also something that, if successful, should have a major impact on uncompensated care, thus positively affecting a hospital's ability to execute their strategic plans by freeing up available capital," continues Fargnoli.

Other highlights from Beacon Partners' study include:

• Three out of every four healthcare organizations surveyed are actively recruiting new doctors, and 40% claimed this was the single most significant organizational improvement they are undertaking to improve financial performance.
• 80% of the participating healthcare organizations have implemented service excellence initiatives.
• Just under 50% of respondents agreed that they will not see immediate benefits from the financial adjustments they've made due to the economy, but should start to within 1-3 years. 38% believe they will start to reap the benefits of their actions within the next 12 months.
• Just under 50% of the healthcare organizations are connected to private practice physicians, most being connected via portals. Two-thirds of respondents believe this connectivity with the greater healthcare community gives them a competitive edge.
• 51% of respondents feel that the issue of hospital/physician alignment strategies is the single most important initiative to improve their organization's long-term success.