Reform unease fading among CEOs

But financial challenges remain top concern in American College of Healthcare Executives annual survey

Last summer's U.S. Supreme Court ruling upholding the Patient Protection and Affordable Care Act appears to have quelled some unease about the law for hospital CEOs.

Even though the implementation of the reform law is accelerating, “healthcare reform implementation” dropped a spot to No. 3 among the most pressing concerns for hospital CEOs ranked in an annual survey by the American College of Healthcare Executives. Reform switched places with “patient safety and quality,” which climbed to No. 2 this year.

The Chicago-based ACHE asked executives to rank a list of 11 challenges and compiled the list based on survey results from 472 executives from community hospitals across the country. The respondents sent their answers in October, which means the results didn't take into account President Barack Obama's November re-election.

“Financial challenges” remained the king of the mountain, ranking at the top of the list for the eighth-consecutive year. One reason for that is declining Medicare and Medicaid reimbursements loom as a major worry for executives, said Joseph Wilczek, CEO of Tacoma, Wash.-based Franciscan Health System. Wilczek is also a senior vice president of divisional operations for Franciscan's parent, Englewood, Colo.-based Catholic Health Initiatives. Respondents called “Medicaid reimbursement” the top financial challenge.

“I think we've seen a steady decline in profitability in healthcare for about the last five years,” he said. “We're still not seeing our costs meet inflation, and again we're not getting reimbursement in the way we have been while seeing a decline in the patient census.”

“Patient satisfaction” ranked sixth in this year's tally, switching spots with “physician-hospital relations,” which ranked No. 7. The only other change in this year's survey was the addition of “population health management,” which ranked No. 9. Last year, ACHE added “creating an accountable care organization,” which ranked No. 11 both years.

The organization asks a cross section of its membership for input on adding survey categories, and ACHE tries to keep them general, President and CEO Thomas Dolan said. He said he was not surprised that neither of the two new categories have risen very high. “Both population health and accountable care organizations are future challenges that people are starting to recognize,” he said.

The individual survey responses reflect the nuances of each CEO's own organization and market. For example, caring for the uninsured—fifth on the ACHE survey—is a top concern at Cook County Health & Hospitals System. It delivered about $500 million in uninsured care last year—which, CEO Dr. Ram Raju said, represents more than half of his budget—and suffered a $169 million shortfall. Uninsured care ranked fifth in the ACHE survey. “Patient safety and quality is definitely on the front burner, but the uninsured and financial challenges take on a much bigger scale for us,” Raju said.

Many of the top issues in the survey blur the lines suggested by the categories, which is evident in specific concerns executives said underlie the 11 broad issues.

Patient safety and quality ranked No. 2, while physician-hospital relations ranked No. 7. However, in explaining concerns regarding “patient quality and safety,” 69% of executives answered “engaging physicians in improving the culture of quality.” The top concern identified in healthcare reform implementation—appearing in 76% of executives' surveys—was “reducing operating costs.”

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