About 71 percent of healthcare executives expect their revenues to increase in 2016 and 55 percent expect to seek financing in the next 12 months, a new study released Monday by CIT Group has found.
Healthcare executives are significantly more likely to mention investing in acquisitions in 2016 compared to 2015, with the 55 percent figure representing a substantial leap over the 44 percent who expected their company to seek financing in 2015.
The study, "2016 Middle Market Healthcare Outlook," was conducted online by the Harris Poll on behalf of CIT among 164 healthcare executives.
However, views on mergers and acquisitions remained somewhat static. In the next year, a slight majority of healthcare executives, 53 percent, predicted that mergers and acquisitions activity will increase across the industry as a whole, similar to last year's findings; the remainder of executives believe it will remain stable. More so than last year, mergers and acquisitions seem to be driven by purchase price multiples and valuation over strategy. About three-quarters of executives believe that increased mergers and acquisitions may result in a greater focus on care (over business administration).
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Concern over costs proved to be a continuing and compelling trend for executives as well. Ninety-one percent of executives felt that consumers will be unable to endure any higher costs than what they face right now. Eighty-one percent believe that consumers occasionally avoid follow-up visits, even when potentially necessary, to dodge extra costs. Most felt that healthcare providers, insurance companies and pharmaceutical companies all share some responsibility for bringing healthcare costs down.
Executives also seemed to welcome some level of government involvement -- for the most part, believing that the government should maintain at least some authority over the healthcare industry. This desire increased over the past year to reach 78 percent of those surveyed.
Additionally, 65 percent of executives said current regulations have had a positive impact on their company's growth; 64 percent said they've positively affected revenue, and 57 percent said costs have benefitted. Healthcare executives continue to be relatively supportive of the Affordable Care Act, with 53 percent supporting modifications but wanting to keep the basic framework, and 21 percent saying that they want the ACA to remain in place as it is.
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Technology was clearly seen as having a crucial and beneficial role within the healthcare industry -- generally thought to improve quality, convenience and cost of care. At least 8 in 10 executives believe that consumers should be, and are, using technology to monitor their healthcare needs. However at the same time, 88 percent cite security as a clear concern that must be addressed.
In terms of outcomes, about 3 in 4 healthcare executives felt their sector is on track with the rest of the industry on how to best measure outcomes. And there is near unanimity that technology, data and quality of care will all play a role in measurement. But that is where the consensus across executives ends. They diverge on the best way to measure "success" now and in the near-term future. When asked where the priority should be placed on how to measure success today, 31 percent said satisfaction, 29 percent said profits, 21 percent said customer retention, and 16 percent said clinical outcomes.
The study was conducted among executives at companies with revenue between $25 million and $1 billion.
Twitter: @JELagasse