The financial plight of healthcare providers amid the COVID-19 pandemic makes it more imperative than ever for HCPs to modernize their back-office systems in order to improve visibility and efficiency across their finance, supply chain, and HR operations.
Mid-2020 estimates by the American Hospital Association projected that U.S. hospitals would post combined losses of about $323 billion for the year, due in part to COVID-related expenses and revenue losses from canceled surgeries and other services. Some 28% of U.S. hospitals reported losing money as of November 2020, according to Strata Decision Technology. Hospital admissions in 2020 were down 10.5% from 2019, according to Kaiser Family Foundation.
While HCPs have invested heavily in clinical systems over the past decade, they’ve mostly ignored financial and operational systems. Even as hospitals, ambulatory care centers, and independent private practices consolidated to benefit from economies of scale, in many cases they failed to realize that goal because of their lack of enterprise-wide visibility. And while federal incentives have pushed the industry toward a value-based care system, prioritizing health data availability and quality patient care, this move has not translated to improved efficiencies.
How can HCPs stanch the financial bleeding while ensuring sufficient inventories of essential medical supplies and adequate staffing to serve their communities? And how can they prepare for financial resilience during future uncertainties?
In short, they need to invest in their finance, supply chain, HR, and other back-office systems. That’s because they need access to critical information, consolidated from disparate data sources, in order to identify areas to reduce spending near term, as well as plan better for various business scenarios likely to emerge.
“The pandemic has made clear that patient care, organizational strategy, operations, and financial management are tightly intertwined—one cannot respond to challenges in one area without affecting the other,” says Jeff Stiles, VP of global solution marketing at Oracle. “Healthcare provider leaders own extremely important levers to ensure that the highest quality of patient care is available. The criticality to derive real-time insights from organizational data to this end has been on display throughout this crisis.”
HCPs need a comprehensive, single source of operational data (Figure 1), which they can slice and dice to answer, “What if?” questions in order to address dynamic challenges and scenarios. These insights allow them to identify and correct problems before they occur. Most important, improved information management frees up clinicians to spend their time doing what they do best: taking care of their patients.
Fig 1: Make your data work for you
Business intelligence tools are essential to helping HCPs improve their finances (Figure 2) while addressing their staffing and retention challenges. Under normal circumstances, HCPs are typically understaffed, due in part to high first-year turnover, forcing them to spend significant time and money on recruiting and retention efforts. During the pandemic surge, however, hospitals have had to furlough staff while paying contract critical-care clinicians two to three times their regular rates in a “rob Peter to pay Paul” staffing situation.
Fig 2: Generate business insights
Universal financial visibility is the first step to understanding the true costs of HCP services—by physician, service, encounter, and patient population—a requirement outlined in MACRA (Medicare Access and CHIP Reauthorization Act), passed in 2015. HCPs need this granular information to understand resource utilization and cost trends over time, so that they can identify opportunities to cut costs and make future investments.
At a time when HCPs are frontline warriors against a relentless pandemic, we need to ensure that they’re armed with the best weapons so that their focus remains steadfast on the pandemic response and not so much on the health of their businesses.
Oracle is here to support you on every step of this multi-step journey to transform your business.