Finances, behavioral health issues vex hospital executives

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Financial concerns continue to be top of mind for hospital executives as they navigate staffing and behavioral-health issues, according to a new survey.

Finances topped the list of hospital CEOs’ concerns in 2019 for the third-consecutive year, according to the American College of Healthcare Executives’ annual survey that polled 395 hospital administrators. Personnel shortages ranked second while behavioral health/addiction issues ranked third, up from fifth last year.

“What we have is almost the perfect storm: an increase in patients seeking behavioral-health services, a reduction in programs and facilities—all combined with a lack of funding,” said Michael Fosina, chairman elect of ACHE and president of NewYork-Presbyterian Lawrence Hospital.

On the financial front, most hospital executives were predominantly concerned with the increasing cost of staff and supplies. Turnover is high at many hospitals amid low unemployment rates. Meanwhile, drug costs are expected to continue to increase as many high-priced products protect their dominant market positions through patents and other means.

The next most prominent issues were inadequate Medicaid reimbursement, rising bad debt, reducing operating costs, managed care and other commercial insurance payments, and Medicare reimbursement. Cuts to Medicaid supplemental payments loom as the CMS looks to overhaul the system, threatening a growing source of hospital revenue.

As Medicare and Medicaid cuts are inevitable, stakeholders have an opportunity to think differently in reducing costs, Fosina said.

“We can actively evolve to move appropriate procedures to outpatient settings, and seek innovations and automation to help us transform how we do business to become more efficient,” he said.

There was little focus on merger and acquisition activity, which mirrored Modern Healthcare’s most recent CEO survey.

Notably, emergency department overuse, moving away from fee-for-service medicine, and pricing and price transparency were the least-pressing issues.

Related to staffing, most of the hospital executives were dealing with registered nursing shortages. Hospitals are trying out new ways to attract and retain nurses as much of their RNs near retirement.

“As we get more mature in the human resources space about being able to quantify recruitment and retention efforts, it becomes more obvious it is well worth the spend,” Lori Knowles, Memorial Hermann Health System’s chief human resources officer, previously told Modern Healthcare.

Primary-care physicians represent the next biggest need as more medical school graduates opt for higher-paying career paths. A bevy of nurse practitioners are helping fill the primary-care void.

“We have to invest more in our workforce through a focus on professional development and learning,” Fosina said.

When it comes to behavioral health, a lack of community facilities and programs vexed hospital executives. Unchecked mental health issues can exacerbate chronic conditions, which are typically the biggest drains on the healthcare system.

Hospital executives also noted limited funding and low reimbursement levels for mental health and addiction issues. The prevalence of opioid and addiction issues was also a major concern.

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