Boston, MA - March 30, 2010 - The L.E.K. Consulting Hospital Purchasing Survey, one of the healthcare industry’s most comprehensive tools for tracking changes in hospital purchasing attitudes and behavior, has shown that hospitals across the U.S. are employing highly sophisticated budget strategies to cut costs, make targeted investments to support growth, emphasize patient safety, and prepare for ramifications of the new healthcare legislation.
L.E.K.’s study offers unique insight from more than 200 senior hospital decision makers in the areas of general hospital trends, hospital strategy, unmet needs and legislative reform. In addition, the first annual study provides department-specific purchasing insight into more than a dozen clinical and administrative areas. Key insights from the L.E.K. Hospital Purchasing Survey are available here in a new L.E.K. Executive Insights report.
“New healthcare reform is dramatically changing the healthcare industry, and hospital executives realize that old business models no longer apply in today’s new healthcare landscape,” said Jeffrey Stevens, Vice President and Co-Head of L.E.K. Consulting’s global MedTech practice. While it’s well-documented that the healthcare industry has been cutting costs, L.E.K.’s new research uncovered innovative strategies that begin to differentiate hospitals in select areas while simultaneously bracing to support the projected increase in admissions caused by new federal legislation. This insight has critical implications for medical device and life sciences companies, equipment manufacturers, service providers, and technology vendors alike.”
The L.E.K. Hospital Purchasing Survey highlights include:
General Hospital Trends
- Nearly two-thirds of hospitals decreased or froze spending last year, and most hospitals expect further cuts in 2010.
- Despite financial constraints, hospitals are maintaining – and in some cases increasing – budgets for patient safety and other strategic programs.
- Hospital executives anticipate that federal healthcare reform will drive an increase in services and admissions in some areas, after observing a decline in both patient categories during the past 12 months.
- Executives are cautiously optimistic that budgets will increase and afford targeted growth opportunities that address unmet needs and differentiate their hospitals.
Impact of Healthcare Reform
- Hospitals see reform leading to increased overall admissions, but believe that many elective procedures will be down.
- More than 90% of respondents believe that healthcare reform will lead to increased information technology (IT) spending.
- Senior executives believe that the replacement of existing capital equipment and/or medical instruments is a catalyst for increases in current and future spending.
Hospital Strategy and Unmet Needs
- Budget pressures have led to more aggressive negotiations with suppliers and payers, delays in facility upgrades, capital expenditure freezes, longer equipment replacement cycles, and staff reductions.
- Top unmet needs are: achieving competitive differentiation, increasing patient safety and improving outcomes.
- Priority strategic initiatives include outsourcing, separation of specialized services, M&A activity and a focus on complete personal health.
The L.E.K. Hospital Purchasing Survey also includes specific departmental feedback from decision makers in the following areas: cardiovascular, dental, hematology/renal, hospital hardware, infection control, IT, neurology, oncology, ophthalmic, orthopedics, radiology, respiratory, urology and women’s health. Broad themes revealed in the study include:
- Departmental budgets have been examined and pared according to their strategic value to hospitals.
- Departments that hospitals deem strategic will maintain their budgets and have the greatest growth potential.
About the Survey
The L.E.K. Hospital Purchasing Survey was fielded in January 2010 to track changes in hospital purchasing attitudes and behavior. The sample included 203 key decision makers at hospitals across the United States. Individuals participating in the survey included CEOs, CFOs, COOs, materials managers and purchasing directors.
Please contact firstname.lastname@example.org for additional information or to schedule a meeting to review the full report.
About L.E.K. Consulting
L.E.K. Consulting is an international firm that specializes in strategy, transaction services and performance improvement consulting. It advises the largest private and public sector organizations, private equity companies and smaller, more entrepreneurial businesses. With a reputation for resolving the most complex commercial issues, L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns. The firm was founded in 1983 and employs more than 850 staff in 20 offices across Europe, North America and Asia Pacific. In 2007, L.E.K Consulting was awarded the Queen’s Award for Enterprise for its achievements in international trade. Find out more at www.lek.com.
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Note to the media: Charts and graphs for the L.E.K. Hospital Purchasing Survey are available upon request.
L.E.K. Gains Unique Insight Into the Hospital Decision-Making Mindset Including Financial Planning Strategies, Emphasis on Patient Safety, and Focus on Targeted Growth Across Clinical and Administrative Departments