Report Examines C-Suite Priorities For 2024-2025

By Matt Phillion

A new report from healthcare consultancy firm Sage Growth Partners polled health system and hospital executives on their strategic prioritization for the years ahead—and finds that there is an even more immediate need to reduce costs and operating expenses in a world that has weathered a global pandemic.

Among the results:

• 57% said growing revenue is their top strategic initiative, followed by staff recruitment and retention (55%)
• 61% identified workforce resilience as a top challenge, while 43% said access to care is among their top five challenges
• 65% say they believe the health of their patient population is worse than before the pandemic; only 5% said they are confident that their patients have caught up on delayed care
• 43% said they are planning to increase in capital investments over the next year, in areas such as the EMR (20%), artificial intelligence (15%), and virtual monitoring (13%)

“U.S. healthcare spending is $4.3 trillion or so in any given year, and hospital spending is about $1.4 trillion,” says Dan D’Orazio, CEO of Sage Growth Partners. “To put that into perspective, Walmart’s total revenue was $611 billion in 2022—hospital spend alone is the equivalent of twice Walmart’s global revenue. United Healthcare is a massive organization, but at 2023’s annual revenue of $371 billion, you’d need the revenue equivalent of 11.5 United Health’s to equal the total spend for U.S. healthcare—the revenue equivalent of four Uniteds for U.S. hospital spend alone. The order of magnitude is tremendous here, and it’s important to keep that in perspective. Healthcare is the largest sub-economy in the history of humankind, and the scope and scale is mind-boggling.”

Some of what is happening now, D’Orazio says, is a rebound effect of the COVID pandemic catching up.

“It’s interesting: we work with a lot of organizations in the hospice space, and that part of the healthcare world has been struggling for two years economically because patients were dying earlier—the deaths were propelled forward. Meanwhile, there’s an opposite effect in healthcare. Everyone knew a rising tide was coming, but we knew there’s 140 million or so Americans with chronic conditions but only 5 million nurses. The infrastructure and the people side of this cannot keep up with this.”

Concerns new and old

There are a couple of clashing talking points that the survey surfaces, D’Orazio notes.

“Sixty-five percent say their patients are coming in sicker,” he says. “The medical loss ratio is going tup and we’re seeing delayed care but hospitals execs are saying we need to grow.”

This is at odds with other parts of the healthcare reality. For example, for growth to happen so does the provider community, which is also in a well-documented state of shrinking as more and more clinicians want to walk away from the business.

Meanwhile, 60% of respondents say that EHR optimization is a top tech priority, a battle the industry has fought to a standstill for years.

“The dirty secret is that if I have Epic and you have Epic, it’s not the same system. I look at 60% focusing on EHR optimization and we have a problem where the technology is an albatross instead of an accelerator,” says D’Orazio.

While revenue growth and technology top the list, safety, perhaps unsurprisingly, is near the bottom.

With patients at the bottom, consumers at the bottom, safety at the bottom, we have to ask the question: do we have this wrong,” says D’Orazio. “If money, work force, and cost reduction are ahead of patients, consumers, and safety, will this equation ever work? I think of this as the ‘and, and, and strategy’—you have to do revenue and safety, revenue and quality, workforce and safety, together.”

The workforce question is a daunting one.

“We’re seeing this incredibly burnt-out work force, and you can’t have a healthcare system that is both quality but unsafe for the patient or for the workforce,” says D’Orazio.

All of this leads to a question of “system-ness,” D’Orazio notes.

“On a personal note, my dad has cancer and diabetes, and the more I learn about healthcare the more I have two faces, both disillusioned and hopeful,” he says. “He has amazing doctors, but I see where the system-ness stops. He’s got an endocrinologist and an oncologist and a PCP and a nephrologist, but there’s zero care coordination while they’re all using the same EHR.”

So much data, so few people

With an eye on technology and extending the ability of the existing workforce to succeed, the question naturally arises: what can technology do to extend that workforce and make things safer?

“One of the biggest concerns is patient access. I can’t see the patient we need, we don’t know enough about them, but we also do not have enough providers,” says D’Orazio. “The survey sees a push for data analytics, but we’re still at the point in the industry where we’re trying to get our hands around that data. We have the data, but how do we operationalize those insights?”

To that end, it’s less of a technological issue but rather more of a workflow issue, a payment issue, an integration and interoperability issue that sits on top of all of these solutions.

“From a safety perspective, we’re getting better with interoperability, we can move the data back and forth but it’s still dirty. We have lots of pieces and parts but the system-ness is incredibly difficult,” he says. “We’re data rich but operationally impoverished, and it’s only going to get sores with the amount of data we collect increasing. There isn’t a parallel between data rich and better outcomes if there’s a poverty of insights.”

The pandemic in many ways functionally stopped healthcare in its tracks: payors, providers, employers, regulators, and all organizations had to deal with the same challenges at the same time and reflected an alignment of goals, D’Orazio says. Now is the time to look for continued opportunities to drive clinical, financial, regulatory, operational, and technological alignment.

There’s certainly no shortage of companies and innovators trying to solve those problems, he notes.

“I’m hopeful that things like AI will be potentially game-changing,” D’Orazio says. “There are any number of concerns from a quality, safety, and ethics position, but we don’t have enough people, we have too much data, and clearly the EHR hasn’t solved the problem if 60% of people are still desiring for that EHR to work.”

But if there is a solution to be found, it can’t be tech for tech’s sake, D’Orazio explains.

“Technology that is out of a workflow is dead tech. Tech that has to depend strictly on fee for service will never directly lead to its ultimate potential benefit,” he says.

The convergence of better use of technology and better access to care for patients can lead to solving the financial challenges that re top of mind for executives. Start small, D’Orazio recommends. Before shooting for the moon, try to solve for fundamental issues here on earth.

“You have to go small to go big,” says D’Orazio. “Scale back to step forward. I think we have to solve such fundamental issues—patient scheduling, for example. It’s incredibly complicated. But if we can’t do the basics, we can’t make the moonshot.”

Rather than looking at the future, he says, solve for yesterday and today.

“I don’t think the future is the future. We don’t have permission to go to the future if we haven’t solved the problems of the past and present,” D’Orazio says. “I want to do the fundamentals well. We shouldn’t have a portal for the patient to access and then hand them a clipboard when they arrive in the office.”

Revenue and quality, technology and access, everything comes together on a fundamental level, D’Orazio says.

“It’s incredibly difficult. We have to think about what techs and nurses and doctors deal with every day. You’re dealing with sickness and complications and deaths—we owe it to our workforce,” says D’Orazio. “Forty percent of doctors say they want to get out of medicine. The only thing that matters for the future is making sure we have people who want to do this work. The tech doesn’t matter if we don’t have the people.”

Matt Phillion is a freelance writer covering healthcare, cybersecurity, and more. He can be reached at matthew.phillion@gmail.com.