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Leading Issues Facing Today’s Hospital CEOs

In its annual survey sent to over 1,000 randomly selected members, the American College of Healthcare Executives (ACHE) once again found that financial challenges ranked as the number one concern for hospital chief executive officers (CEO) in 2007.

Seventy percent of the 390 CEOs who responded to the Top Issues Confronting Hospitals mail and fax poll reported that financial issues were their most pressing problem, compared to 72 percent in 2006 and 67 percent in 2005.

The survey also found that care for the uninsured continued to rank as one of the top three issues, with 38 percent of respondents citing it as a major concern. Physician/hospital relations ranked third with 35 percent, an improvement from its second place standing at 40 percent last year.

Other areas of concern for CEOs in 2007 included:

Quality 33%
Personnel shortages 30%
Patient Safety 29%
Governmental mandates 22%
Patient satisfaction 17%


The greatest changes occurred in quality and patient safety. Thirty-three percent of the CEOs in 2007 considered quality to be an issue compared to only 23 percent in 2005. Similarly, concerns related to patient safety increased from 20 percent in 2005 to 29 percent in 2007.

“Creating, implementing and monitoring the systems to improve quality and patient safety has become a major focus of hospital CEOs,” said Thomas C. Dolan, PhD, FACHE, CAE, president and chief executive officer for ACHE, in a press release. “No longer treated as a delegated responsibility solely for clinicians, the entire hospital team--senior management, physician leaders and the board--are now actively working together to improve care.”

As patient safety gains prominence each year in its survey, the ACHE has joined forces with the Institute for Healthcare Improvement’s (IHI) 5 Million Lives Campaign to reduce incidents of medical harm in US hospitals. “Our partnership with IHI will help ensure that healthcare organizations aggressively apply the lessons of evidence-based methods to improve patient safety,” said Dolan in an ACHE press release.

This is becoming increasingly important, as there is a growing trend by hospitals to link CEO salaries and/or bonuses to safety measure outcomes. As hospitals move towards transparency, financial anxiety is no longer the only worry for these individuals, according to a November 26, 2007 article in AMNews. The focus on finances is shifting to a greater focus on quality and patient safety.

Within the three key categories, CEOs were also asked to identify specific concerns within their hospitals. Increasing costs for staff and supplies (74%), Medicaid (74%), bad debt (73%), Medicare (71%) and inadequate funding for capital improvements (62%) were the most common examples under financial issues. Others, listed in order of importance, include managed care payments (48%), revenue cycle management (38%), Emergency Department (37%) and other commercial insurance (25%).

In the second category, care for the uninsured, Medicaid (82%), underwriting costs (82%), advocacy for funding (71%), reaching out to all community members (28%) and response to other hospital closings (15%) emerged as the leading areas of concern.

Within physician/hospital relations, CEOs cited the following as their main problem areas:

Creating win-win collaborations 86%
Physician requests for payment for service to the hospital 83%
Competition with physician-owned facilities/equipment 77%
Medical staff structures/leadership 59%
Niche providers 53%

Many of these issues mirror those found in similar 2007 surveys.

For example, the American Hospital Association’s survey of Hospital Leaders found that hospitals face workforce shortages that are affecting patient care, estimating that there were 116,000 registered nurse vacancies as of December 2006.

Although the issue of personnel shortages dropped from 36 percent in 2005 (3rd place) to 30 percent in 2007 (5th place) in the ACHE survey, it is likely to be short-lived as the AHA survey found that hospitals had more difficulty recruiting in 2006 compared to 2005. An aging workforce and the increasing number of baby boomers requiring healthcare will likely compound the shortage.

In the 2007 Quality of Care Survey by the American College of Physician Executives, physician leaders and administrators working in hospitals, group practices and other healthcare organizations list lack of resources and money, along with communication problems between physicians, nurses and others, among their top barriers to improving quality care and patient safety.

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