Healthcare CFOs Upbeat for 2022, but Hampered by Data Challenges

A new study finds that the pandemic has given healthcare finance execs confidence their organizations have the agility to meet unforeseen challenges.

Battling the COVID-19 pandemic over the past two years has taken a tremendous toll on the healthcare industry. However, according to a new study, it also has given healthcare CFOs confidence in the operational agility and flexibility of their organizations.

That was among the key findings from "2022 CFO Outlook for Healthcare: Finance Leaders' Priorities for Addressing Workforce, Data, and Costing Challenges," from Syntellis Performance Solutions. Syntellis polled 420 healthcare finance leaders on how they view the financial outlook for their organizations in 2022 and the ability to meet top challenges.

The good news: More than 90% of respondents say they are confident in the ability of their hospital or healthcare system to adapt and quickly react to a changing environment.

"At the start of 2022, healthcare finance leaders faced an uncertain future fueled by many hospitals still reeling from Omicron while also having concerns about the next inevitable variant," says Flint Brenton, CEO of Syntellis. "Fortunately, many of these organizations have learned over the past few years the value of flexibility and agility in the wake of unforeseen challenges."

"Adversity from the COVID-19 pandemic has built confidence in many healthcare leaders to meet future curveballs head on," Brenton continues. "This is evident through survey respondents' ability to implement more efficient budgeting. Ongoing evolution of budgeting processes will continue this year, as survey respondents indicated a focus on rolling forecasting. The volatility of the pandemic forced organizations to shorten the length of budget cycles, encouraging budgeting practices to become more innovative, timely, and strategic. This is something I expect to see continue across the industry in 2022."

But dampening that enthusiasm is the fact that too many hospitals and healthcare systems lack advanced data management tools to drive intelligent decision-making. A vast majority of respondents (82%) say that, while they have greater access to data, they need to do more with that data to help drive business decisions and improve the quality of care. The diagnosis here is simple: the use of outdated tools such as spreadsheets is hampering those efforts, according to nearly two-thirds (61%) of respondents.

"We were surprised to see just how high the numbers were around those hospitals and healthcare providers who are still relying on outmoded processes and insufficient technologies to address financial and operational challenges," says Brenton. "Yes, many health organizations have been burdened over the past year between juggling widespread supply chain shortages, staffing issues, and skyrocketing expenses. But without taking a hard look internally to identify the gaps caused by outdated systems, these healthcare finance teams will continue to struggle until they implement optimal tools and robust solutions to boost the financial health of their organization."

Other key findings of the report include:

• Lack of confidence in benchmarking: One-third report being unhappy with the data submission process for financial benchmarking and a quarter are not using any financial benchmarks.
• Cost management and reductions are top of mind: Behind addressing workforce issues, cost management and reductions are another priority for healthcare leaders, with 69% agreeing these are very important to fiscal health.
• Agility gets a boost from efficient budgeting: Evolving budgeting practices reduced the length of budget cycles; the proportion of organizations with budgeting cycles lasting six months or more dropped to 29%, down from 50% in 2019, before the pandemic. Almost all organizations (92%) now are confident in their teams' ability to quickly adjust strategies and plans in response to sudden changes, up from 83% in late 2020.
• Institutions work to plan for the future: Organizations are seeking better ways to anticipate the future with nearly half (46%) planning to increase use of predictive analytics technology. And more than half (55%) of organizations using some form of rolling forecasting.

Brenton says that procuring accurate data—and using that data to drive decision-making—is the key to healthcare organizations bouncing back after a few tumultuous years.

"Despite having greater access to an abundance of data than ever before, many healthcare finance executives still struggle to utilize this data," Brenton says. "Most respondents said their decision support systems gather data from across the enterprise, inside and outside of hospital walls. Less than half (44%) have visibility across the entire enterprise, while 34% capture data from hospitals and outpatient facilities."

But this data isn't optimized for planning and forecasting, Brenton says. This lack of data visibility hinders many healthcare leaders from understanding what departments may require in terms of more support and resources, and where to invest in the future—ultimately trickling down to the quality of care.

While many hospitals and healthcare systems have been burned by time and resources spent on simply getting through day-to-day operations, Brenton says that this approach is not sustainable in the long run. Healthcare finance executives need to break this cycle by focusing on their overall 2022 priorities and taking on initiatives that directly map back to those areas.

"Scenario modeling and rolling forecasting capabilities give healthcare leaders a better understanding about how to manage similar crises going forward and maintain financial stability in the long-term. Additionally, taking advantage of available benchmarking data can help healthcare executives pinpoint areas where they are thriving and opportunities for improvement."

Looking ahead, Brenton says the survey reveals that more healthcare finance executives want to use predictive analytics to better determine the best path forward for patients and providers.

Nearly half (46%) of respondents want to tap into this functionality, Brenton says. This indicates a strong need for insights to guide decision-making based on previous outcomes.

"Using predictive analytics accompanied by technologies such as artificial intelligence and machine learning can help forecast clinical, operational, and financial needs from historical data," Brenton says.

In terms of other trends impacting the industry, Brenton says that across industries, the Great Resignation has shown that organizations need to do a better job of prioritizing one of their most important assets: their staff.

"As healthcare labor costs continue to rise, leaders must get creative to retain and attract new staff, while also managing costs," Brenton says. "In addition to listening to employee feedback and nurturing a positive, supporting workplace culture, hospitals should streamline workforce productivity insights to optimize staffing plans, identify gaps, and anticipate challenges before they become unmanageable."