This Industry Outlook is a portion of the 2018 Arizona CFO Spotlight Survey Report
The 2018 Arizona CFO Spotlight Survey attracted respondents from a number of industries in Phoenix and Tucson. We will highlight the health care segment here in terms of growth, risk factors, strengths and trends.
Responding health care companies included hospitals, clinics, and specialists. They are based mainly in Tucson. Over the last three years, revenue projections among respondents have declined. In 2016, 36.6% of respondents believed health care revenues would increase significantly in the coming year. For 2018, the percentage has dropped to just 14%. While 57% of CFOs were somewhat optimistic about financial prospects fo their organizations for 2017, about 43% of CFOs are somewhat optimistic for 2018. In fact, another 43% of CFOs said they are "somewhat uncertain"about their financial prospects. By far, their top two concerns are available skilled labor and regulatory costs. They believe that government and industry regulation along with competition are the biggest barriers to revenue growth. This is not surprising in light of major increases in insurance premiums among state and federal health insurance exchanges. Most respondents don't expect to gain any growth through raising prices, as a little over 71% plan to keep prices the same. This compares to 45% in 2016 and 43% in 2017. CFOs shared plans for growth through volume — expanding locations and the types of services they provide.
Health care leaders are concerned about slowing growth, with 28.6% anticipating decreased revenue for 2018.
Health care organizations are experiencing a major cultural shift in the workplace as they try to sustain positive working environments amidst constant change. To retain workers, CFOs say they are providing more flexibility in scheduling, child care options, and increases to the minimum wage. Alternatively, about 33% of health care organizations are reducing paid vacation time to offset costs from Arizona's new paid sick leave policy. Leaders acknowledge that attracting and retaining quality talent is the biggest risk factor to the organization's reputation, and they are exploring a variety of staffing options along with automation such as online do-it-yourself patient tools and portals.
"We have focused on savvy contract negotiations to make sure we are getting paid enough to cover our costs."
Average Number of Employees
Revenue in 2018
- 14% We will increase significantly 14%
- 43% Will increase slightly 43%
- 29% Will decrease slightly 29%
Top Areas of Focus
- Stablize costs/manage debt
- Changes in compensation structures
- Workplace culture
- Continuous innovation
- Remote workers and automation
43% somewhat optimistic
not a problem