Hospital capital spending shows signs of growth

A faint pulse may be detected among hospital capital budgets, according to a new survey by the Premier purchasing alliance.

Premier's 2010 Economic Outlook noted that 42 percent of respondents reported an increase in capital budget, while 32 percent reported a decrease.

However, two-thirds of those who reported flat or receding budgets said that projects already in progress had been scaled back in scope, whether new construction or an information technology project.

Among those items targeted for cost reduction over the next year, respondents said prices on commodity led the pack (27 percent); followed by physician preference utilization (25 percent); and pharmaceutical utilization (19 percent).

Pharmaceutical costs remains a red flag even among Premier, which negotiates discounts for 2,400 providers nationwide. It estimates inflation among its drug contractors will be 4.4 percent over the next year.

In the meantime, healthcare-related inflation among other Premier suppliers is expected to remain relatively low, clocking in at between 1 percent for telecom to 3.7 percent for cardiovascular services. That compares to inflation ranges of up to 15 percent for services provided outside of the Premier alliance.

Healthcare reform is the top concern among respondents. More than 80 percent consider reform, pending changes in reimbursement and electronic health records implementation the most important current trends, with 73 percent believing those two areas will have the greatest impact on their financial performance over the next year. 

For more:
- read the Premier press release  
- read the Healthcare Finance News article