What does 2020 look like for the healthcare industry? LBMC conducted a national survey covering business leaders in eight industries, including healthcare. The survey is considered a pulse survey, which is opinion based and not scientific in nature. The survey collected responses to determine a baseline of optimism and strategy preferences over the past 12 months and the coming 12 months.
According to the survey, healthcare c-suite optimism is high overall, anticipating a growth in revenue and profitability. More than 77 percent of healthcare leaders anticipate revenue growth in 2020, and 80 percent increased capital spending in 2020.
The top three goals in 2020 for healthcare leaders are increasing revenue, increasing business value and improving financial performance. We also saw an increased effort to streamline operations and efficiencies with 68 percent of healthcare organizations emphasizing growth strategies on existing products/services.
Business strategy for healthcare respondents included 18 percent open to acquisitions and 37 percent anticipating capital spending on new locations or facilities. While 44 percent of leaders plan to improve margins through productivity and efficiency.
Primary goals for IT investment in health care facilities include enhancements to existing systems and focusing on ERP solutions. About 20 percent plan to invest in cloud solutions and 40 percent plan on improving existing systems, increasing online presence and outsourcing technology support.
Just over 30 percent view technology solutions as a primary way to deal with top business challenges that include regulatory requirements and various labor costs. In fact, 65 percent find inflationary factors related to labor costs as a barrier to growth, and “improving financial performance” is cited by 20 percent of leaders as their top business goal for 2020.
Going into 2020 we see a slight increase in the comfort level of today’s employee counts and less demand for employment growth. Industry leaders citing appropriate number of professionals for the year rose to 56 percent with 37 percent citing too few employees to meet their need. They note a range of methods to retain top talent including additional compensation, enhanced training, and new benefits or increased company contributions to benefits.
Private equity deals were at a record level in 2019 and we expect that to continue in the coming year. The amount of private capital yet to be deployed into new investments is still very high.
One of the most notable survey data points centered around a noticeable decrease in the confidence in the global economy falling below 5 to 4.9 on a 10-point scale for the first time in our three-year survey. Regional economic confidence rose to 7.9 while confidence in the national economy fell slightly to 6.3. This is not a surprise given the political landscape and upcoming elections globally as well as domestically.
While half of healthcare leaders still cite referrals as a primary driver when they choose products and services, 18 percent say that thought leadership and case studies influence their buying decisions. About 62 percent of healthcare leaders expect to seek financial and business consulting solutions to solve their top business challenges.
2020 Expectations Summary
The pulse survey shows that leaders in the healthcare industry are positive about the upcoming year’s increased revenue through the enhancement of existing products and services, expansion into existing and new markets, improved efficiency and increased pricing. Capital spending will continue this year with an emphasis on IT investment, R&D and marketing. Retaining top talent and hiring challenges will continue to be top of mind.