The Top 5 Challenges facing Healthcare Execs Today


Greetings from Denver, where I am attending the second-annual CentricityTM Live User Conference! Nearly 1200 people have joined GE Healthcare at the Denver Convention Center to learn more about Centricity solutions and network with peers.   It’s really energizing to be around so many Centricity users.

This morning, GE Healthcare IT President & CEO Jan De Witte gave a very inspiring keynote address.  While I don’t have the space to recount it all for you here, I wanted to highlight Jan’s list of his “top 5” challenges that he hears from healthcare execs.  Briefly they are:

1)      The consumerization of healthcare. Driven by the change in insurance, consumers are being more active in their healthcare decisions.  Employers are shifting more healthcare cost onto consumers.  New exchanges are more prone to require higher deductibles.  Thus, patients are now willing to shop around for healthcare or even choose not to receive care if it is too expensive.  As a result, overall hospital usage is down.

2)      Costs outpacing revenue.  According to a recent study by McKinsey1, the majority of US hospitals saw an annual rise in operating costs in 2013 that outpaced their revenue growth. This is a result of patients choosing lower-cost services from less-expensive locations.  While hospital systems still have high overhead costs, those costs are now amortized over fewer patients and more locations.

3)      An increasing patient population and a decreasing labor pool.  Healthcare utilization is expected to increase over the coming decade, primarily because we have a large aging population which is living longer and insurance coverage is expanding.  Yet according to the Association of American Medical Colleges, the US healthcare system will be facing a shortage of more than 90,000 doctors by 20202.  In particular, the Association of American Medical Colleges forecasts the United States will have 29,800 fewer primary care physicians (PCP) than it needs in 2015 and a shortage of 65,800 PCPs by 2025!

4)      How much risk can you absorb as an IDN CEO or as a primary care provider?  According to recent research by the Leavitt Group3, by 2018, ACOs will cover more than 85 million lives—representing 36% of all provider covered lives in the United States.  Meanwhile, nearly 40% of providers believe that in three years, the majority of their income will come from value-based payments, which means they now have to deal with risk that was historically borne by the payers.

5)       How can our healthcare providers deliver better outcomes?  Even in the midst of all this pressure around cost and risk, no CEO has lost sight of his system’s core mission—to heal people.  And they are constantly in search of tools to improve the accuracy of diagnoses and connect care pathways to better share information that may cure someone.

What do you think of this list?  How does it measure up to your own list of the Top 5 Challenges?


1. Proprietary research study prepared for GE Healthcare and presented to John Dineen and staff, McKinsey & Company, April 2014

2. AAMC submits letter on workforce in advance of senate HELP hearing April 9, 2014

Growth and dispersion of ACOs, June 2012

Leave a Reply

Your email address will not be published. Required fields are marked *