47% of hospital leaders say salary increases are top expense pressure

Forty-seven percent of hospital executives said that rising salaries and wage inflation are putting the most pressure on their organization's efforts to cut expenses, according to a new Kaufman Hall and Healthcare Financial Management Association survey.

For its survey, Kaufman Hall surveyed hospitals and health systems on their performance and cost transformation efforts. The survey included responses from 169 directors, managers and executives.

Four findings:

1. For survey respondents, rising salary was the top expense pressure, followed by funding strategic growth initiatives (23 percent), supply chain operations (12 percent) and other purchased services (10 percent).

2. Thirty percent of healthcare leaders said flat or declining inpatient volumes are placing the greatest pressure on their organization's revenue, followed by downward pressure on commercial insurance rates (27 percent), increasing percentage of Medicare and Medicaid patients (19 percent) and growth in patient responsibility (13 percent.)

3. The most respondents (36 percent) said they saw the greatest success reducing costs related to labor and productivity (36 percent), supply chain (32 percent) and overhead/shared service synergies (9 percent).

4. Thirty-one percent of respondents said they had the most difficulty reducing costs related to labor and productivity, while 25 percent said unwarranted clinical variation was causing the most difficulties in achieving its cost transformation goals.

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