CATHOLIC HEALTH CARE'S FUTURE

Health Progress, Mar/Apr 2005 by Zuckerman, Alan

"Catholic Healthscan 2004" Reveals the Views of 175 Ministry Leaders

NO PROVIDERS ARE EXEMPT from the enormous difficulties facing U.S. health care, but Catholic organizations face special challenges. Dwindling memberships of sponsoring congregations; problems involved in balancing values and financial performance; and uncertainties concerning emerging genomic medicine, on one hand, and end-of-life issues, on the other-all these continue to dominate the agendas of the nation's largest group of not-for-profit health care organizations.

What are the most important issues likely to affect Catholic hospitals over the next five years? In 2004, CHA and Health Strategies & Solutions, Inc., a Philadelphia-based management consulting firm, conducted a survey called Catholic Healthscan 2004. Our survey was intended to accomplish three objectives:

* Identify the degree of concern among executives in Catholic health care about the key current and future challenges

* Clarify the nature of each challenge and discuss potential approaches to employ in addressing it

* Encourage study and dialogue about successfully managing the most important challenges

Having received input from an advisory panel of 13 senior executives of Catholic health care organizations, we selected 25 critical issues for the survey, which employed a seven-point Likert scale (see Graph 1). We then solicited survey responses from some 650 people, representing each of CHA's member hospitals and systems. We received 175 responses, a 27 percent response rate.

Our survey questions were posed in the form of statements to which we asked respondents to say whether (and how strongly) they agreed or disagreed. Five general themes seemed to emerge:

* Economic/financial issues

* Legislative/regulatory issues

* Physician/staffing issues

* Capital needs/growth issues

* Catholic-specific issues

Although most of the issues cited were of great importance to survey respondents, they revealed exceptionally strong agreement in their responses to three particular predictive statements:

* U.S. employers will compel employees, dependents, and pre-Medicare retirees to share an increasing amount of the costs of their health benefits through higher copayments and deductibles and/or shift to defined contributions (6.28 median score).

* State and federal budget deficits will result in Medicare and Medicaid payments falling further behind health care cost increases (6.06 median score).

* Hospitals with access to capital will build replacement hospitals and ambulatory care facilities and acquire the latest technology; hospitals without access to capital will fall further behind their competitors (6.06 median score).

Conversely, two statements generated strong disagreement, suggesting that survey respondents see little likelihood of government action:

* Concerns about the medically uninsured will result in legislative reform to provide coverage for the large majority of this group (3.57 median score).

* Effective malpractice reform legislation that sets limits on awards will be enacted (3.85 median score).

None of the seven statements in the Catholic-specific section of the survey generated agreement or disagreement as strong as those in the other sections. The strongest agreement (5.68 median score) was elicited from the statement "Strong financial skills will be as important as Catholic values in selecting future executives and senior managers of Catholic health systems." The strongest disagreement (4.37 median score) came in response to the statement "Catholic health systems will expand by adding more elements of the continuum of care to efficiently and effectively move the growing volume of patients through the system."

ECONOMIC/FINANCIAL ISSUES

Gradually improving financial performance, in both the general economy and the health care sector of it, has not allayed concerns generated by years of turbulence. "Vulnerable" is the word that best describes health care providers, according to our survey's respondents. They forecast, over the next three to five years, worsening state and federal budget deficits, increasing consumer responsibility for payment of health insurance and services, and further deterioration of margins.

However, although respondents are cautious in their outlook, they seem to be optimistic in their behavior; the survey shows a "disconnect" here. Respondents are, for example, dramatically escalating their capital spending in reaction to rising patient-care demands. And they forecast continued high levels of capital spending over the next three to five years. Time will tell whether survey respondents are being overly aggressive or exercising the right balance of fiscal conservatism and sound growth strategies.

LEGISLATIVE/REGULATORY ISSUES

In recent years, the federal government has focused narrowly on Medicare reform and prescription drug costs. At the state level, budget deficits have dampened activism. Survey respondents are pessimistic about the likelihood of broad-based legislative initiatives in the areas of malpractice reform, coverage of the uninsured, and the establishment of safety standards. Survey questions concerning these issues yielded the lowest median scores and the least agreement about the likelihood of action in the next five years (see Graph 2).