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In Financial Forecasting, Time to Plan for the Worst

Karen Minich-Pourshadi, for HealthLeaders Media, October 10, 2011

Here are a few negatives to consider including in your projections:

  • Even deeper cuts to Medicare and Medicaid
  • Shifts in your payer mix, including payer consolidations
  • Mergers and acquisitions affecting market share
  • Large business closures or bankruptcies
  • “Black Swan” events

With so much uncertainty on the economy and on Capitol Hill, creating a viable financial forecast to guide your organization is more complex than ever.

The one thing that persists for CFOs today is the inability to plan,” laments Mahan. “It’s a never-ending, changing environment, and it makes our ability to forecast very challenging.”


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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1 comments on "In Financial Forecasting, Time to Plan for the Worst"


Jackie Larson (10/11/2011 at 11:34 AM)
This article does a great job of presenting the problem and framing the factors at play. Without a doubt, implementing best practice labor management solutions, and leveraging BI tools to help drive efficiencies (which improve patient care) is a measure to stop the hemorrhaging. Labor, after all, is anywhere from 50% to 70% of a healthcare organization's budget. While we have very little control over the external factors discussed in this article (flat patient volume and government cuts to Medicare and Medicaid), we have a lot of control over how we manage our organizations.