Rising health-care costs in the U.S. continue to have a major impact on organizations, and CFOs must contend with this challenge. With nearly half of hospitals in rural America currently operating in the red, the widespread challenges finance chiefs face in U.S. health-care facilities continue to develop.
New research from Grant Thornton's inaugural health care CFO survey pinpoints the prioritization of patient needs and patient-focused strategies as the key drivers for health care sector advancement. To get there, nearly three-quarters (71%) of the 100 health care CFOs Grant Thornton interviewed said their primary focus was automation, to improve operations so greater focus and resources can be on the patient experience.
Controlling Labor Costs
With the amount of hospital staffing involved in health care, along with its share of talent shortages, finance leaders are looking for ways to lower their costs without sacrificing the patient experience. Based on the survey results, it’s clear most are looking to proactively cut costs by improving their tech stacks and supplementing manual work.
Agility and innovation are the hallmarks of successful automation implementation, but a crucial element of implementing these technologies is to make sure it’s solving a specific problem. It’s also critical for CFOs and executives to empathize with their teams when introducing new technology to workflows.
Outside of the push for automation, CFOs are looking to reduce their labor costs by optimizing what they are already spending. Nearly two-thirds (63%) of CFOs said they’re reducing labor costs by reducing their dependence on outside contracting, which tends to involve higher labor costs per hour and little to no leverage on the negotiation of these contracts.
Nearly four in 10 (39%) said they plan on raising prices for care delivery, and just over a third (34%) said they would reduce headcount and their total hours worked to control costs.
Surveyors also report many hospitals are looking to push work down the hierarchical ladder to prevent more expensive labor from doing remedial work. By looking to pass nursing tasks on to nursing assistants or writing tasks from physicians to scribes, health-care systems may be able to trim some labor costs by reallocating labor while also using “non-licensed” individuals where possible. There is no mention by Grant Thornton on how this may impact the quality of their services, however.
Collaboration Potential
By partnering with other hospitals and health-care providers to offer special rates, services, or access to their networks, hospital CFOs enable their hospitals to provide better services.
Just under half (44%) said their focus will be on collaborating through health-care plans. With many plans having preferred relationships, and thus better rates with certain hospital systems, this could incentivize policyholders to use a system based on a recommendation from their insurance provider.
For other partnership options, 32% said they would collaborate with other hospital systems. Few (14%) said private equity firms will be a target for partnership, with even fewer (6%) considering retail market entrants.
Growth Outlook
CFOs view growth opportunities in several buckets while focusing on better patient experiences. Nearly three-quarters (73%) said enhancing patient experience was a part of their growth outlook plans. Nearly two-thirds (65%) hope to expand into new markets, with a nearly identical amount (64%) saying they hope to launch new services that will boost growth.
Even with these cost issues above, growth is still a priority — and appears to be rooted in health care leaders’ optimism. When asked about their top priorities around growth and investment opportunities in their business, the consensus was a focus on growth and a strategic fit into investments and less on the risks and ROI associated with new investments in growth.
Nearly four in 10 (39%) named a strategic fit with company goals and mission as their top priority in new investments for growth. Less than a fifth (18%) said risk and only 13% said ROI was their top priority.