Cost reduction and operational efficiency transformational strategies are the top priorities for health system C-suite executives early in 2014, according to recent polling conducted by MedAssets at its annual Healthcare Executive Forum, held Jan. 30 to Feb. 1, 2014 in Scottsdale, Ariz.

Fifty-five percent of the 150 attendees reported a decline in operating margins year over year in fiscal year 2013 as opposed to 26 percent in fiscal year 2012. The top reasons for the dramatic dip are attributed to shift in payor mix and reimbursement reduction.

According to the event polling, more than 75 percent of attendees indicated that their organization is engaged in transformational initiatives in the face of healthcare reform economic pressures. Nearly 60 percent of respondents cited they are experiencing declining Medicare reimbursements, managing the impacts of Medicaid expansion and state exchange enrollment, experiencing increased pressure from private payors and more regional competition.

"In this era of healthcare reform, sustaining financial and operational performance through traditional methods of increased volume and supply cost reduction are no longer adequate," said Barry Arbuckle, Ph.D., president and chief executive officer, MemorialCare Health System. "Providers need to engage in innovative strategies and collaboration to successfully integrate across the care continuum. MedAssets Healthcare Executive Forum provided the perfect platform for distinguished healthcare executives to gather and share proven transformational strategies."

The theme for the event, "Getting from Here to There," drew together healthcare executives to share perspectives on critical issues facing the healthcare industry and strategies for success to address the unprecedented challenges that lay ahead. Keynote speakers included: Trevor Fetter, president and CEO, Tenet Healthcare; Joel Allison, CEO, Baylor Scott & White Health; Robert Pryor, M.D., president, COO and CMO, Baylor Scott & White Health; and Joseph Swedish, CEO, Wellpoint. Attendees also heard from more than a dozen health system CEOs and CMOs on winning strategies for reform.

Clarity of Strategy and Execution Important Focus for Healthcare Transformation  
As healthcare leaders engage in organizational transformation, 71 percent of attendees stated that clarity of strategy and execution was critical for success. Additional key takeaways from the event include:

• Eighty-nine percent of attendees reported their health systems will acquire and engage in non-hospital growth strategies over the next two years, up from 63 percent in 2013 
• As hospital consolidation occurs, 43 percent of attendees thought that having a high quality, clinically integrated organization is the most successful growth strategy versus solely a strong geographical footprint
• Over the past three to five years, 59 percent of attendees indicated that physician groups have been the most important partner, and 48 percent of attendees are confident this will remain the same in the next five years. Thirty-four percent of attendees, however, indicated insurance companies will emerge as the most important partner.

"Our industry is experiencing dynamic change, requiring providers to prepare for a new market where reimbursement is based on value vs. volume," said John Bardis, chairman, president and chief executive officer, MedAssets. "As the Affordable Care Act takes shape, providers need to transform their organizations into more cost effective, clinically aligned and efficient health systems."