How Hospital CEOs are Responding to the Affordable Care Act

In a recent study conducted by L.E.K. Consulting, approximately 150 hospital CEOs and other senior decision makers were asked how they expected to respond to the Affordable Care Act. Their answers indicated they were planning to implement the following strategies:

69 percent – Increase process efficiency
51 percent – Reduce costs by renegotiating with suppliers
45 percent – Reduce redundant procedures in care
45 percent – Delay capital expenditures
35 percent – Increase utilization
30 percent – Lower costs at care centers
18 percent – Delay acquisitions
05 percent – Do nothing

Other findings noted in the four-page “Executive Insights” report (link below) include:

"Typical suburban hospital’s margins are currently approximately 4% but this is expected to decline to 0%, primarily due to payer-mix shifts.”

"The top 100 hospital systems in the U.S. will account for more than 60% of hospital spending, up from 40% in 2008.”

“While most hospitals still operate as standalone institutions, the majority will likely eventually move towards joining large, consolidated, and increasingly strategically integrated systems.”

The concise report also includes data on the percentage of respondents indicating their interest in specific medical technology solutions to address issues such as disease management, hospital management, clinical analytics, etc.

L.E.K. Consulting is a 30-year-old management consulting firm with clients in the private and public sectors. You can access their report at: http://www.lek.com/sites/default/files/LEK_HospitalSurveyEI0214_Final%28v4%29.pdf