Survey: Hospital CFOs Planning To Focus On Cost Reductions In 2020
According to a recent survey, a vast majority of hospital financial leaders agreed that focusing on cost reductions will be one of their main priorities in 2020. The same survey also revealed that hospital CFOs and other financial leaders need to bulk up their investment in data analytics and management dashboards.
The survey, conducted by Black Book, included responses from nearly 1,600 hospital and health system Chief Financial Officers, Vice Presidents of Finance and other finance leaders to spot trends about organizational priorities for the upcoming year. The company’s press release noted:
“62% of survey respondents say advanced analytics is the most needed skill set to be developed in the financial ranks of health systems in 2019-2020. 95% of CFOs agree that the CFO of the future will require a much more robust data analytics skill set than 2019 CFOs.
91% of CFOs surveyed state their top priorities for 2020 will be managing cost reductions followed by 85% needing to predict the impact of new payment models through enhanced reporting.
76% of all financial leaders from supervisor through CFO levels report needing better performance management dashboards as overall satisfaction with current technology and reporting systems is less than 9%.
92% of survey respondents believe the CFO of the future must be a better job leveraging technology and staff with IT skills for health providers to succeed financially.
As health systems CFOs steam ahead toward digital transformational technology, 83% believe the finance function must provide more advanced analytic support that most current decision support and cost accounting vendors have offered, particularly those attached to enterprise EHRs.
“Financial leaders will need to recruit and retain staff who possess traditional financial expertise, flexibility in adopting new payment models, willingness to accept nontraditional responsibilities such as cybersecurity, patient satisfaction and innovation, but most importantly the eagerness to learn new technologies and process designs,” said Brown. “The technological complexities of transforming financial systems and business integrations across health system units may well hasten the retirement of many old-guard CFOs from the industry.”
In 2020, all respondents concluded the most highly sought leadership skillsets that health system CEOs and boards will see in their financial team executives are:
Technology Acquisition and Implementation (89%)
Data Analytics (85%)
Financial Business Strategy (82%)
Financial Operations Administration Through Technologies (81%)
“To assess whether the digital transformation is having an impact on the health system, the C-Suite needs a strategy that is more transformational and less incremental, thus the evolving role of the CFO taking more technological control is inevitable,” said Brown. “The degree of transformation required to achieve the results of value-based centric provider to align with financial business strategies and digital initiatives is the task at hand for the future CFO.”
Read the full article here: Black Book Charts a Future Course for the Healthcare CFO
Most hospitals are learning to live in the new value-based care environment in real-time and adjusting on the fly. Many hospitals and health systems are looking to achieve significant savings by eliminating waste in their supply chain. As the article mentions, making substantial reductions in organizational spend requires powerful and accurate data about expenses and comprehensive data analytics capabilities. One place that hospitals may find immediate opportunities for reducing their costs is by better managing their implants and supplies, which make up the second biggest component of procedure costs after labor. If your organization lacks the proper tools to provide powerful data around your supply chain spend, consider systems such as iRISupply which can collect real-time data around supply and implant usage using RFID technology and provide actionable insights to help with vendor negotiations, on-hand inventory levels and owned-consigned item mix. Powerful data analytics included with the software will give specific recommendations on which items to reduce or eliminate, and which items should be owned vs. consigned, leading to millions of dollars in cost-savings opportunities. These cost-savings opportunities can help hospitals increase their margins and could contribute tens of millions of dollars to the bottom line.