Healthcare leaders are optimistic about trends in the industry this year, such as demand for services, job opportunities and containing costs, according to the results of a survey by B.E. Smith. The company, which provides executive leadership solutions to healthcare providers, surveyed nearly 1,000 healthcare executives to determine their outlook for the industry this year.
Overall, “two-third of healthcare leaders are optimistic regarding the 2017 outlook for the healthcare industry,” according to the survey, which was conducted after the 2016 election. “Long-range drivers of demand for healthcare services, such as the aging of the U.S. population, will continue to expand the industry, even in the current era of changing healthcare policy, healthcare executives say. Only a small percentage of those healthcare leaders surveyed said they were not optimistic,” it reports.
Healthcare leaders participating in the survey also said they are optimistic because of “growth and change in the industry and opportunities for organizations and careers. The changing nature of healthcare puts a premium on leadership; the survey examined the significant opportunities related to healthcare leadership due to the vibrancy of the industry.” Other trends identified in the survey include:
Keeping Costs in Line
Containing costs remains a top focus for healthcare executives. “While spending growth rates have been declining over the past decade, 2017 may reverse course. One leading forecaster predicts a 6.5 percent rise in 2017,” according to the report. In January, the Centers for Medicare and Medicaid Services predicted national health expenditure growth will average 5.6 percent each year from 2016 to 2025.
In 2016, national health spending growth is estimated at 4.8 percent, slower than the rate of 5.8 percent reached in 2015 “as a result of slower Medicaid and prescription drug spending growth,” according to CMS. This year, health spending is predicted to increase by 5.4 percent, influenced by growth in private health insurance spending. According to the B.E. Smith survey, spending growth this year could present challenges for healthcare providers.
Competition and Strength in Leadership
“Agility, innovation and creative leadership” are critical for healthcare managers this year. Part of that leadership model includes focusing on more, not less, competition. “Facing market challenges from growth in telemedicine and over 2,000 retail clinics, successful hospital leaders will embrace strategies that are proactive competitive catalysts,” according to the report.
Thirty percent of respondents to B.E. Smith’s survey said leadership competencies are their “top concern this year. Respondents also identified vision, strategy and integrity as important leadership characteristics. The survey found that “almost 18 percent [of respondents] believe that ‘evolving leadership roles and competencies’ will have the greatest impact on their organizations’ futures.”
“Steady growth fuels an already competitive labor market and could portend a rise of employee mobility,
placing organizations at greater risk of turnover,” according to the report. Job growth is the fastest in clinical positions within the healthcare industry. In 2016, job growth was also high in outpatient care centers and home health agencies.
Job satisfaction is a key indicator to monitor turnover. B.E. Smith found that there is opportunity for improvement. “While 75 percent of respondents registered satisfaction with their current positions—a strong showing though down from last year’s 88 percent—only 30 percent say they are ‘highly satisfied.’”
The survey findings also include that 27 percent of respondents said they are not considering a job change, compared to 43 percent from the year prior.
Finding Top Talent
Executive leaders in the industry say one of their top recruitment challenges is finding “high quality talent. Two-thirds feel that finding quality candidates is the biggest challenge in filling executive vacancies. The strong labor market and improving economy add another hurdle.”
Some executives said they look outside their organization to recruit healthcare leaders. “Over half of organizations anticipate reliance on internal development to strengthen leadership ranks in 2017, a notable one in five cited two externally-oriented alternatives,” according to the report. Those respondents said they are considering recruitment outside of their organization and from other industries, including finance and hospitality.
“B.E. Smith believes one explanation is a tighter market for experienced executives coupled with a greater willingness to bet on emerging outside leaders and non-industry veterans in an environment that demands adaptability and innovation.”
The survey also evaluated healthcare industry leaders’ outlook on employee engagement, which is driven by work-life balance and job flexibility and leads to employee retention. “Many analysts have connected strong engagement with such benefits as better financial performance and higher customer satisfaction,” according to the report.
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