If you are a supplier to hospitals, you’ll notice lots of surveys of what’s on the mind of hospital executives these days. These surveys can come from consultants or vendors, who are trying to sell something. Alternatively, the studies can come from hospital groups or associations. Regardless of the study sponsor, these surveys tend to have a consistent theme – there’s a tremendous amount of change happening and pressure on the hospital industry.
One recent survey that provides interesting insights is the American Hospital Association (AHA) survey. It was a survey of 1,100 hospital executives. 95% of the respondents were CEOs. The CEOs were asked what their key strategic priorities were for the next three years.
The AHA survey revealed these eight as the top strategic priorities of the hospital C-Suite:
- Improving efficiency through productivity and financial management — 56 percent
- Joining and growing integrated provider networks and care systems (either through formalized structures or virtual/affiliated networks) — 46 percent
- Aligning with other institutions along the continuum of care — 45 percent
- Adopting evidence-based practices to improve quality and patient safety — 39 percent
- Integrating information systems — 32 percent
- Establishing partnerships with payers — 22 percent
- Strengthening finances to facilitate reinvestment and innovation — 20 percent
- Improving employee and physician training, engagement and leadership skills — 15 percent
Clearly, healthcare reform in the US is having an impact. Value-based purchasing, CMS quality programs, and the formation of ACOs can all be linked to the first 6 strategic priorities. Hospitals are responding by taking costs out, improving quality, becoming accountable for longer-term outcomes, and finding ways to create more leverage with suppliers and payers.
If you are a hospital supplier, it’s helpful to review a survey like this and ask some simple questions. For the purposes of this article, we’ll focus on questions related to the commercial side:
- What are the implications (opportunities and threats) for my business?
- How might this impact my value proposition, value communications, and pricing?
- Is my commercial team prepared to help and aligned with the strategic priorities of my customer?
- Are we organized to win in this new market?
Hospital suppliers tend to be at all different stages of addressing the questions above. Some suppliers are way out in front and are preparing to help hospitals with their strategic priorities. Other suppliers are just beginning to fully understand the change that is happening in the customers’ business and the implications. For prepared suppliers, all of the pressure and change in the US healthcare system should be an opportunity. On the other hand, unprepared suppliers likely face margin erosion and share loss.
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