The value-based reimbursement contract necessitates providers to improve on all aspects of organizational performance.
Lack of enthusiasm seems to have overtaken hospital CFO’s to manage the financial implications arising out of value-based reimbursement and care delivery models. Kaufman Hall, the consulting firm in their recent survey approached several prominent CFOs and senior finance executives representing the healthcare industry to understand and know their performance management goals and challenges.
‘Off the 160 hospitals surveyed, only 13 percent organizations were ready with plans to manage the unfolding payment and care delivery models using their current financial planning and processing tools’
Over 160 hospitals surveyed, only 13% of organizations ready with plans:
The survey unveiled a couple of worrisome news. Off the 160 hospitals surveyed, only 13 percent of organizations were ready with plans to manage the unfolding payment and care delivery models using their current financial planning and processing tools. The drop has marginally fallen from 15 percent that prevailed in the previous year.
Another 23 percent of hospital CFOs expressed confidence in their organization’s preparedness in planning out adjustments to their strategies. Last year this figure was 25 percent.
Red flags of serious concern to healthcare organizations:
The consulting firm states that this data represents red flags of serious concern to healthcare organizations. The report further states, “senior finance executives must understand what is occurring as business circumstances change, as well as how such change affects their organizations’ business strategy.
Armed with this information through performance management processes and tools, they then can more appropriately make course corrections for the achievement of strategic objectives.”
CFOs and Senior Finance Executives not Having Access to Data:
There seems to be a lag, with most CFOs and senior finance executives not having access to the necessary data and analytics tools to evaluate or understand new business conditions such as value-based reimbursement, and how that would affect hospital’s organizational strategies.
The survey found that 96 percent of respondents felt that their organizations weren’t doing enough to leverage financial and operational data to structure strategic decisions. While 94 percent reported there was increasing pressure to have a deeper perception of how financial results would influence business strategy.
‘finance leaders are revamping operations to look beyond financial data after value-based reimbursements and other evolving business conditions have thrown up new challenges’
Revamping Operations to Look Beyond Financial Data:
The Hospital CFOs needed additional data from the organization, other than the financial health of an organization. Apparently, finance leaders are revamping operations to look beyond financial data after value-based reimbursements and other evolving business conditions have thrown up new challenges.
Although 86 percent of CFOs still manage financial health, there’s other 80 percent that manages other aspects of organizational performance, which is overtly linked to value-based reimbursements. It includes patient experience, care quality, and clinical outcomes.
Finance Leaders to Monitor More than Traditional Metrics:
The value-based reimbursement contract necessitates providers to improve on all aspects of organizational performance. It entails finance leaders to monitor more than the traditional metrics, like financial health or strategic growth.
The survey emphasized that a comprehensive view of performance requires the integration of relevant data from disparate sources and identification of a manageable number of metrics to track each initiative within and across dimensions.
‘Leadership teams must consider having all required information stored in one system, which can be accessed by all managers and leaders’
The report also mentions that leadership teams must consider having all required information stored in one system, which can be accessed by all managers and leaders. This report added, will build commitment to sustainable progress monitoring that will contribute to the achievement of improvement plans.
Analytic Tools Play an Important Element:
Underlining the importance of data analytics, the report states that analytic tools play an important element in handling an evolving healthcare business environment, but hospital CFOs seldom use them in their organizations.
‘50 to 59 percent of respondents preferred limited access to clean, consistent, and trusted data, they needed the ability to drill into reports to get a clear understanding of underlying details’
Over 60 percent of respondents wanted to create better dashboards and visualizations, being able to pull data from multiple sources and embedding them into a single report. Another 50 to 59 percent of respondents preferred limited access to clean, consistent, and trusted data, they needed the ability to drill into reports to get a clear understanding of underlying details.
Many respondents felt that the lack of access to clean data was a significant barrier in adopting data analytics. Besides, without trustworthy data, they did not want their business decisions and strategies to be influenced through inaccurate analysis.
CFOs Rely on Spreadsheets for Tactical Planning Decisions:
Most hospital CFOs rely on spreadsheets for strategic, financial, and tactical planning decisions in the absence of authenticate data, the survey found.
‘Managing or directing financial operations and related control/monitoring function will not be sufficient going forward’
Concluding the survey, the report states that given the demands of the changing business environment, healthcare CFOs nationwide should be critically examining the role they and their finance team’s play in their organizations. Managing or directing financial operations and related control/monitoring function will not be sufficient going forward. The financial executives need to be integral to the organizations development, execution, and monitoring its strategy, with access to all data and analytics required for performance management in healthcare at their disposal.