Hospitals Focus on Staffing, Supply Chains and Outsourced Service Providers as Priorities Shift Again

Hospitals Give attention to Staffing, Provide Chains and Outsourced Service Suppliers as Priorities Shift Once more

L.E.Ok. Consulting Annual Survey of Hospital Resolution-makers Uncovers How Hospitals Are Navigating Out of the Pandemic Amid Difficult Financial Situations

BOSTON, March 9, 2023 /PRNewswire/ — The cascading results of the pandemic will proceed to form hospital and well being system priorities for a minimum of the subsequent a number of years – and suppliers mentioned they’ll look to their outsourced service suppliers and strategic suppliers for better assist, in keeping with international technique consultancy L.E.Ok. Consulting’s annual survey of hospital decision-makers.

Among the many different key priorities for hospitals to handle are staffing points associated to turnover and burnout, provide chain disruptions, digital well being investments, enter value will increase as a result of inflation and renewed curiosity in strategic acquisitions.

In actual fact, in keeping with L.E.Ok.’s 2022 Annual U.S. Hospital Examine, which relies on a survey of practically 250 hospital and well being system executives: 86% of respondents mentioned attracting and retaining nurses is an important strategic precedence, 50% both at the moment function a consolidated care middle or plan to within the subsequent three years, 80% mentioned they’re concerned about pursuing pharmacy as a income alternative.

“Firstly of the last decade, hospitals and well being methods anticipated to proceed investing in value-based care. However COVID-19’s impression on practically each facet of care supply has dramatically impacted their long-term trajectory and short-term priorities,” says Ilya Trakhtenberg, Managing Director at L.E.Ok. Consulting and chief of the agency’s Healthcare Provide Chain observe, in addition to lead creator of the report. “The wrestle to recruit and retain employees, provide chain points inflicting unreliable entry to crucial medical-surgical merchandise and an infection management challenges in hospitals throughout the pandemic all raised questions round affected person entry and the standard and price of care.”

“Hospitals now face added challenges as they navigate the uncertainties of at the moment’s inflationary atmosphere, the potential of an financial downturn and continued international provide chain points,” provides Monish Rajpal, L.E.Ok. Managing Director, Head of the Medtech subsector and report co-author. “The speedy tempo of change throughout the U.S. healthcare system is forcing hospitals and well being methods to reorient their provide chains to realize higher resiliency and enterprise danger administration.”

Among the many research’s key findings (see additionally transient video of report co-authors discussing the research):

  • Hospitals proceed to deal with key operational wants – particularly on staffing and the repercussions of inflation, which have develop into predominant new priorities. Employees turnover and burnout-related retention had been already an issue pre-COVID, however it has solely develop into extra pronounced since 2020 – 86% of this 12 months’s survey respondents mentioned attracting and retaining nurses is an important strategic precedence, 80% mentioned the identical for physicians and 76% mentioned this for nonclinical employees. Hospitals are additionally attempting to navigate the uncertainties of enter value will increase as a result of inflation and the margin pressures that is creating. 
  • Provide chain value containment continues to be an space of focus, with renewed emphasis on the strategic significance of the provision chain perform. Many hospitals are more and more seeking to carry in-house better parts of provide chain operations, each to manage prices and to extend their stage of management of stock availability and scheduling. Whereas solely round 45% of the hospitals that at the moment personal or lease warehousing – as reported by 50% of respondents – interact in self-distribution, extra are planning to develop this functionality for acute and non-acute websites within the subsequent three years. Hospitals are additionally investing in consolidated service facilities (CSCs), with greater than 25% of respondents at the moment working a CSC and one other 25% desiring to develop this functionality within the subsequent three years. Near 75% of respondents mentioned that resiliency packages are essential for his or her distribution companions and round 65% state that the packages are a precedence for particular person medtech suppliers.
  • Hospitals proceed to put money into digital well being (notably telehealth and distant care) to assist the altering affected person engagement fashions and to boost operational effectivity. Over the previous three years, nearly all of hospitals have made a minimum of primary investments in a variety of digital well being instruments, however extra vital current investments have been concentrated in telehealth, interoperability and engagement instruments – a minimum of 30% of hospital executives indicated vital funding in every of those areas. These investments assist assist each the operational effectivity and strategic priorities of hospitals, resembling employees shortages, growing volumes of affected person knowledge from digital medical information, medical gadgets and private well being gadgets, and better ranges of affected person digital savviness.
  • Consolidation continues, albeit at a slower tempo as hospitals shift focus again to optimizing their present operations moderately than pursuing acquisitions. There was a slowdown in deal quantity by practically 60% since 2017 as hospitals and well being methods alter their strategic focus to handle staffing and provide chain challenges because of the pandemic. Each progressive hospitals and well being methods and traditionalists report that they proceed to be concerned about pursuing acquisitions of each non-acute care websites and acute care websites, however curiosity is decrease than its peak in 2018.
  • The emphasis on leveraging assist from provider companions will increase as hospitals navigate the challenges listed above. Within the aftermath of the pandemic, progressive hospitals and well being methods have retained their propensity to work with third-party service suppliers – on common practically 60% reporting average to excessive chance to work with outsourced companions – and traditionalist hospitals have elevated their willingness to take action, from round 45% in 2019 to round 50% in 2022 reporting average to excessive chance on common. Hospitals are additionally viewing their suppliers as strategic companions greater than ever. A better proportion of respondents agree that medtechs present invaluable providers, options and assist past their merchandise now than in 2019.

“The shift in hospitals’ strategic priorities displays the necessity to proceed conventional revenue-maximizing actions whereas additionally addressing speedy considerations round staffing shortages and inflation,” says Jonas Funk, L.E.Ok Managing Director. “To assist all of their wants in a more cost effective method, hospitals are growing their utilization of outsourced service suppliers and strategic suppliers.”

“Regardless of the high-cost and inflationary atmosphere, hospitals with sturdy steadiness sheets are persevering with inorganic development endeavors and anticipate acquisitions in each acute and non-acute care settings,” says Sheila Shah, L.E.Ok. Managing Director, chief of the agency’s Digital Well being observe and report co-author. “With digital well being a rising a part of the care continuum, hospitals additionally anticipate elevated spending on new IT infrastructure and wraparound providers for the subsequent three years.”

About L.E.Ok. Consulting

We’re L.E.Ok. Consulting, a worldwide technique consultancy working with enterprise leaders to grab aggressive benefit and amplify development. Our insights are catalysts that reshape the trajectory of our shoppers’ companies, uncovering alternatives and empowering them to grasp their moments of reality. Since 1983, our worldwide observe — spanning the Americas, Asia-Pacific and Europe — has guided leaders throughout all industries, from international firms to rising entrepreneurial companies and personal fairness traders. Searching for extra? Go to

Media contact:
Michael-Jon Romano
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SOURCE L.E.Ok. Consulting

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