Hospital executives are planning for budget increases during the next five years and are prioritizing strategic initiatives that had previously been on hold due to economic constraints. Healthcare insurance reform is also causing hospital management to re-evaluate how they select and purchase medical devices and other services, according to a survey from L.E.K. Consulting.
Nearly 60 percent of 196 surveyed hospital executives expected budget increases in 2011. During the next five years, 70 percent of respondents predicted larger budgets and are planning to increase purchasing in multiple areas, including IT (58 percent), facilities (38 percent), large medical devices (37 percent), small medical devices (21 percent) and disposables (28 percent), according to the Boston-based consulting firm’s survey.
Supplier negotiations will be central to controlling costs, which has hospitals increasingly turning to group purchasing organizations (GPOs) to help negotiate the best rates possible, L.E.K. stated. According to the L.E.K. survey, more than half of respondents expect to use GPOs more by 2015. Some hospitals have also started to approach GPOs to procure high-priced capital equipment in addition to low-price, high-volume items. (more…)