DHG’s Executive MINDSETS Survey Reveals the State of the Healthcare Industry

Four key themes emerged around Strategy, People, Growth and Value

Nashville, T.N., November 17, 2021 – DHG’s Healthcare practice conducted its second annual Healthcare Executive Leadership Survey, MINDSETS, with responses from C-Suite leaders representing healthcare provider organizations across the nation ranging in size from $250 million to more than $10 billion. MINDSETS was designed to gather the key challenges driving the industry and surface the strategic themes that leaders are employing to meet those challenges. With burnout and change fatigue prevalent and resources, including staffing, limited, many strategic initiatives were paused during the COVID-19 pandemic to focus on addressing direct patient care imperatives. The main concerns facing the industry, in both the near-term and the long-term, are the workforce of the future, financial stability, and succeeding in the never more important value-based nature of healthcare. These concerns have led providers to re-open strategic plans, critically analyze their capabilities and priorities as they continue their drive to improve overall population health through innovation, efficiencies and growth. All this with a fatigued workforce, burnt out and entirely different from the pre-pandemic workforce.

Four key themes emerged around Strategy, People, Growth and Value:

1. Strategy: The COVID-19 pandemic forced more than half of respondents (53%) to pause strategic initiatives and, instead, focus scarce resources on patient care in their communities.

• Nearly half (49%) of leaders plan to refresh their enterprise strategic plan early in reaction to the financial pressures and consumer preferences brought about by the pandemic. Of those, 33% of respondents will revise their strategic plan within 0-6 months and 49% will revise within 7-12 months.
  Bottom Line: Addressing the changing dynamics that have been exacerbated by COVID-19 within a 12-month timeframe is imperative for organizations to stay nimble in the midst of an ever-changing environment. Enterprise strategic planning completed every three to five years is no longer best practice. The practice of annual business planning is likely the way of the future.
• 40% of senior executives identified workforce of the future as the most important long-term issue to address.
  Bottom Line: Increasingly, organizations have found that the challenge of managing and maintaining their workforce to support execution has become an important long-term issue and without a targeted plan and approach, execution of that strategy could be jeopardized. Mitigating the barrier created by the changing dynamics in the workforce is paramount to enterprise strategic success.

2. People: With nearly half of respondents (44%) saying burnout is their dominant human capital concern and that turnover will reach historic levels (44%), there is an immediate need for proactive and cost responsible action.

• 44% of respondents identified burnout as their dominant near-term human capital concern.
  Bottom Line: While burnout rapidly emerged as a key issue facing the industry, measurement is limited – only 2 out of 3 respondents reported measurement to understand burnout in their clinical community and only 1 out of 4 measured burnout for non-clinicians. Even if measurement is taken, it’s typically relegated to a few glancing questions on an engagement survey. Organizations must lean in and properly measure organizational burnout to determine the root causes behind burnout and establish a strategic plan to mitigate. Learn more about leaders’ role in fighting organizational burnout.
• 75% of respondents indicated a belief that their organizations are experiencing significant change fatigue, however, more than 70% of respondents believe success in the new normal requires significant change agility.
  Bottom Line: As the strategic importance of issues like value-based contracting, non-traditional affiliations, and direct employer contracting escalate, people within healthcare must enhance their ability to adapt and drive concurrent and converging change initiatives. Change agility may no longer be enough – transformational agility is the new requirement.
• To combat turnover, 68% of respondents stated they plan to review their own employee benefit plans in the next 12 months with a focus on improving the employee experience and addressing wellbeing.
  Bottom Line: No longer add-ons or nice-to-haves, these focus areas are true table stakes for organizations looking to become destination employers.
• Although seen as a critical need, more than 70% of respondents ranked reducing overall employee benefit cost as a significant imperative.
  Bottom Line: In an environment where talent scarcity increases by the moment, finding these savings while maintaining an attractive benefit package is challenging but doable. Employers can realize the savings they need with reliable data and creative approaches.

3. Growth: Health systems and provider organizations continue to prioritize financially motivated consolidation, with affiliations (43%) as the dominant method, in an effort to regionalize care, create scalability and improve financial performance.

• The primary driving factor for consolidations is financial sustainability (56%).
  Bottom Line: Consolidation within the healthcare industry has accelerated in recent years and, notably, is taking place across the entire provider continuum, leading to greater vertical integration and efficiencies. As consolidation continues to accelerate, providers should expect more government oversight and regulations.
• Programs driving overall population health will likely see the greatest growth; respondents expect the most growth in Primary Care (66%), followed by Population Health Programs (53%) and Behavioral Health (51%).
  Bottom Line: Respondents believe industry growth will be fueled by these types of consolidations via affiliations and innovative programs targeted at increasing healthcare access and overall population health.
• 91% of respondents believe Telehealth will remain after the pandemic, likely due to its ability to benefit overall population health.
  Bottom Line: There is a deep understanding within the executives that responded around the importance of shifting to value and the impact on their need to have a clear strategy for execution and a plan to close the gap for services and capabilities provided.

4. Value: While 53% of respondents said COVID-19 negatively impacted value-based arrangements, their strategic importance has never been clearer – nor the gaps organizations have in their capabilities to execute on value-based arrangements.

• 89% of respondents agreed that engaging in more alternative payment models (“APMs”) is a “strategic need” for their organization. Yet, fewer than half (48%) of respondents agreed that their organization was “capable” of meeting this strategic need. In short, many providers’ fundamental capabilities fall short of their goals and needs.
  Bottom Line: Interest in APMs may have outpaced capability leading to a mismatch in need and ability to meet these needs. Common themes for this mismatch include limited downside prevents meaningful change, over-reliance on technology platforms, focus first on net-accretive capabilities, current risk arrangements and the need for a long-term APM development plan.

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Survey Methodology

These survey results were collected by Gerson Lehrman Group (GLG) between August 13, 2021 and August 20, 2021 through email. The 87 participants were all executive leaders in the healthcare industry. Participants were selected from GLG’s database through a number of questions regarding their role and organization to achieve a balance of responses between levels, organization size, and region.

About DHG’s Healthcare Practice

DHG’s Healthcare practice is ranked by Modern Healthcare as the tenth largest privately-held healthcare consulting practice in the nation. Our clients span the health and healthcare ecosystem, all sharing the common challenge of successfully navigating the unprecedented federal, state, and market-driven industry transformation underway in the U.S. Our services in the consulting, assurance, and tax domains are purposefully designed to assist our clients in their journey to risk capability. Creating institutional value is a critical focus as our clients define their strategic approach, execute transformational plans, and manage their organizations' financial health and sustainability. Learn more at dhg.com/healthcare.

About Dixon Hughes Goodman LLP

Ranking among the top 20 in the nation, DHG is a leading professional services firm offering assurance, tax and advisory services for clients in all 50 states and internationally. Our strength lies in the integration of our technical knowledge, industry intelligence and future focused approach. Together, these principles drive our purpose: to help clients achieve goals today and tomorrow.

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