Cost reduction tops the list of priorities for healthcare CFOs in 2018, according to a recent survey by Kaufman Hall.
Close to 30 percent of senior finance executives cite “identifying and managing cost-reduction initiatives” as the most critical performance management function.
The survey, which featured responses from senior finance executives from more than 350 hospitals, health systems and healthcare organizations, identified other top priorities, including:
- Improving performance reporting to operational leaders
- Predicting and managing the impact of changing payment models
- Developing more integrated planning processes across financial planning and strategic capital allocation
Overcoming Obstacles to Optimal Performance
While CFOs prioritize and acknowledge the urgency of cutting costs, they often lack the necessary data, processes and tools to perform such critical functions.
In fact, an alarming 70 percent of CFOs use cost measurement tools that provide inaccurate or unreliable data. Seventy percent also cite little to no use of reports on patient and service line cost and profitability trends.
Nearly three-quarters of survey respondents think that performance management plays a crucial role in their team’s ability to meet strategic goals. Yet a mere 8 percent are “very satisfied” with their organization’s performance management reporting processes.
It’s no wonder then that most CFOs have limited confidence in their organization’s ability to manage the impact of evolving business conditions. A lack of robust data and limited reporting hinders any ability to generate necessary cost improvements.
Driving Strategy Requires Better Support
Growing consumer and purchaser demands for greater value in healthcare require new strategies to improve the quality of care while lowering the cost of delivery. As financial leaders look to better leverage data to improve strategic decision-making, unreliable tools and processes will not suffice.
Outdated processes must be redesigned and additional resources provided in order for CFOs to achieve their cost reduction goals.
Many financial leaders assume the burden of trying to reduce capital expenditures on their own, despite a lack of capacity for thorough cost-benefit analyses. This can cause organizations to miss out on key opportunities to reduce expenses.
Working with an experienced cost reduction analyst can make it easier for organizations to quickly identify sustainable cost-saving opportunities. Access to the accurate and objective analysis and fresh ideas that specialists such as Silverback provide can help healthcare CFOs bolster their bottom lines in the current year and beyond.
Get started on your achieving your cost reduction goals today.
