Bringing Healthcare Finance into the Digital Age
As health systems have invested heavily in patient-facing technologies to meet the significant surge in virtual care demand, it has become evident that finance and back-office tools must also advance to fully bring health systems into the digital future.
On November 2, experts from Syntellis, Providence and Banner Health discussed how they are leveraging realtime transparency, predictive analytics and AI-powered automation to forge a path ahead amid uncertainty. The entire webinar can be viewed at ModernHealthcare.com/HealthcareFinanceWebinar.
1 It has been a challenging planning environment for finance professionals.
In his introductory remarks for the webinar, Jay Spence, vice president of healthcare strategy at Syntellis, noted that many existing financial management tools and processes were not well-equipped to handle the uncertainty of the COVID-19 pandemic. There were a number of scenarios and levers to consider, including deferred elective procedures, changing cost structures due to shifts in service mix, fluctuations in government reimbursement and shifts in liquidity. In a Syntellis survey before the pandemic, 75 percent of leaders said resource constraints impacted the effectiveness of their financial planning and analysis, and 83 percent said they were not regularly simulating business and financial impacts of alternative planning scenarios.
2 Finance leaders should use the “Now, Near and Far” framework to assess current capabilities.
Developed by Ford CEO Jim Hackett and adapted for healthcare by Kenneth Kaufman, chair of Kaufman Hall, the “Now, Near and Far” framework implores leaders to manage effectively “now” in the current business environment, proactively plan and pivot resources in the “near”-term to support “far” strategies, and look “far” to establish a vision for the future. This requires leaders to think about how they can improve their current financial position, model the impacts of changing conditions across multiple scenarios and efficiently align capital strategies with a sustainable financial plan.
3 Recovery planning will require more integrated and efficient planning tools and processes.
Leaders will need to create a “financial performance feedback loop,” assimilating information from a variety of sources and translating it into an adjusted financial plan, capital structure and capital allocation. Leaders also will need to reevaluate how they are continuously monitoring performance, whether it be traditional financial management reporting or more sophisticated analytics that project volume trends and shifts in payer mix. Ultimately, leaders need to be nimbler and more proactive in how they can re-forecast the business and correct its course.
4 Finance leaders have a variety of roles as backoffice functions move into the digital age.
Finance leaders serve as a data guru and data steward, gaining timely insights through market and competitive data, and automating analytical processes like cost accounting. They also serve as a strategic advisor to the organization, automating the planning process to enable increased efficiency and agility, and translating data insights into actionable financial plans and budgets. Finally, they also serve as a partner to operational and clinical leaders, leveraging comparative data to guide performance improvement, and evaluating opportunities to improve cost and quality.
5 As they plan for 2021, healthcare leaders are considering how they can be more flexible and resilient.
During our panel Q&A, John Groesbeck of Banner Health and Greg Hoffman of Providence discussed how a rolling forecast model has shifted their mindset. Groesbeck noted that, while the financial metrics used remain the same, leaders also need to consider how sudden changes in other metrics like supply spend, bed occupancy and staff productivity may impact financial health. While closely monitoring traditional reporting, Hoffman’s team is tracking big-picture trends, such as the long-term value of customers and the ongoing value of Providence’s connected network.