CORRECTING and REPLACING Growth In Health System Capital Spending Projected to Dip below 2010 Levels as Patient Admissions Drop, According to Premier healthcare alliance Survey of Executives


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Hospitals and health systems nationwide are projecting the growth of their capital expenditure budgets will drop below 2010 levels as they anticipate patient admission reductions, according to the Premier healthcare alliance’s fall 2012 .

Forty-one percent of 617 survey respondents – primarily hospital C-suite, and materials and practice area managers – are projecting their capital spending to increase compared to last year. This is down from 42 percent in fall 2010 and a two-year high of 46 percent in spring 2011.

When respondents were asked about the area in which they expect to make the largest capital investment over the next year:

Investments in imaging, lab, and surgical and clinical equipment are forecasted to drop by more than 23 percent compared to just six months ago, according to survey results. Product standardization – reducing the number of vendors that supply like products – was cited most often (almost 33 percent) as the top area to which hospitals are dedicating the most resources (financial, labor) to improve their supply chains. Reducing costs for physician preference items was cited by more than 27 percent.

An ongoing factor driving the dip in capital spending is reimbursement cuts, cited by 74 percent of respondents as the number one trend impacting their hospital. Another factor could be an anticipated reduction in patient admissions. Twenty-four percent of respondents believe their patient admissions will decrease, more than double what was projected in fall 2011 (12.4 percent).

According to Premier President of Supply Chain Services Durral Gilbert, “Whether due to lower reimbursement or fewer patients, health systems are making tough choices on how to most effectively and efficiently provide care. It is clear they consider the value-analysis process of using integrated data to improve outcomes and reduce costs paramount in the current healthcare environment.”

Not surprisingly, reducing waste is weighing heavily on the minds of healthcare providers. When asked what they consider to be the two biggest drivers of healthcare costs, 33.3 percent of respondents cited overutilization of products and services, up 32 percent from six months ago (22.7 percent). Premier’s waste report identified an opportunity for in blood purchasing costs alone by reducing blood usage by 802,716 units, while maintaining positive patient outcomes.

“Inefficient use of products, services and labor is a major issue health systems are facing that requires active engagement from a variety of internal stakeholders,” said Mike Alkire, Premier chief operating officer. “Matching utilization data with outcomes, as our blood product analysis shows, can identify tremendous savings without compromising quality, even when looking at just one product or service.”

Premier’s highlights emerging economic and industry trends impacting Premier healthcare alliance members and the overall industry. The publication leverages subject matter expertise to build consensus from diverse points of view while highlighting best practices and strategies needed to drive performance improvement. Premier releases a new analysis every six months to ensure content and projections reflect changing market conditions. The focus of this edition of the is “connecting data, knowledge and people” and “the future of the supply chain” in healthcare by optimizing resources and developing new measures of quality and effectiveness.

The fall edition includes insights from Premier member experts, including:

Premier is a performance improvement alliance of more than 2,700 U.S. hospitals and 90,000 other sites using the power of collaboration and technology to lead the transformation to coordinated, high-quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier operates a leading healthcare purchasing network with more than $4 billion in annual savings. Premier also maintains the nation's largest clinical, financial and outcomes database with information on 1 in 4 patient discharges. A world leader in delivering measurable improvements in care, Premier works with the Centers for Medicare & Medicaid Services. Headquartered in Charlotte, N.C., Premier also has an office in Washington. . Stay connected with Premier on , and .