Even as healthcare providers across the country are struggling to make their new, expensive technology work, a new survey shows providers are more frustrated with their purchases than ever.

The survey of C-suite healthcare executives from Premier healthcare alliance reveals that, despite heavy investments and continuing frustrations with their electronic health records, providers are gearing up for increased spending in health IT, including EHRs. They are also eyeing purchases in advanced IT, telecommunications and modern clinical equipment, according to Premier’s spring 2014 Economic Outlook C-suite survey.

Premier’s Economic Outlook highlights emerging economic and industry trends impacting alliance members and the overall industry.

Nearly half (49 percent) of the C-suite respondents plan to make their largest capital investments over the next year in health IT. This category was most often cited for the second consecutive year, up from 46 percent in spring 2013 and 45 percent from spring 2012.

The survey also suggests that 41 percent of respondents are dissatisfied or indifferent with regard to their current EHR systems. 

"Hospitals are making necessary investments in infrastructure to meet the demands of this new generation of healthcare," said Michael J. Alkire, Premier's chief operating officer, in a press statement. "These investments are targeting HIT to provide more connected and efficient patient care, and modern clinical equipment that can deliver improved outcomes.

"What we are hearing increasingly from healthcare leaders is dissatisfaction with their existing EHR systems, often citing cost and difficulty of use," he added. "Providers need a solution that integrates clinical, financial and operational data across their hospitals and health systems; the majority of EHR systems cannot do that."

The acquisition of clinical equipment – surgical, imaging and lab – was cited by 22 percent of executives as the area in which they are planning the largest capital investments, up from 12 percent in spring 2013.

As a part of its spring 2014 Economic Outlook, Premier surveyed 127 C-suite executives – primarily CEOs, chief financial officers and chief operating officers – from 112 hospitals and health systems of various sizes and types across 32 states. Response rate for the biannual survey was 5 percent with a margin of error of +/- 2.5 percent – 4.1 percent at the 95 percent confidence level.

Additional survey results

Drivers of healthcare costs
Labor is considered the biggest driver of healthcare costs, cited by 42 percent of executives compared to 24 percent six months ago. Healthcare legislation and mandates was also often cited, by 34 percent of executives. In addition, compared to fall 2013, significantly more respondents cited health IT as the biggest driver of costs in their system (27 percent vs. 17 percent).

"With sequestration, Affordable Care Act changes and other legislation, hospitals have been incurring billions of dollars in payment cuts with much more to come," said Premier President of Supply Chain Services Durral R. Gilbert. "For many providers, barely breaking even under Medicare is equivalent to success these days. To offset these cuts, some health systems have no other choice than to explore staff reductions."

Improving supply chain performance
Among areas where providers are dedicating the most resources to improve supply chain performance, 42 percent cited product standardization (reducing the number of vendors supplying like products), with one in three executives focused on reducing physician preference item (PPI) costs.

Survey results also suggest providers are increasing non-EHR IT investments to improve supply chain performance. Seventeen percent of executives cited non-EHR IT purchases compared to 11 percent year ago.

"Health systems can no longer depend on one-off changes to drive expenses down," said Gilbert. "They now need to address variation across their systems. This is a marathon, not a sprint, and it requires connecting cost, clinical and supply chain data and analytics to drive significant change over the long term."

Provider shortages
The survey also shows that three of four providers are experiencing physician or nurse shortages, with 42 percent experiencing shortages in more than one practice area. Among those experiencing shortages:

• Almost four of five executives cited primary care physician shortages.
• 47 percent of respondents cited specialty physician shortages.
• 28 percent of respondents nurse shortages.

Other trends
For the third consecutive year, reimbursement cuts remain the most often cited trend expected to impact providers this year, selected by 69 percent of executives. In addition:

• One of four executives cited provider consolidation, twice as many compared to spring 2012.
• The percentage of executives citing uncompensated care increased for the first time in two years. Twenty-two percent selected this category, compared to 17 percent a year ago and 27 percent in spring 2012.