Transforming financial complexity into clarity: Healthcare CFOs share insight

Healthcare finance leaders face a multitude of pressures, from rising operational costs and cash flow constraints to reimbursement complexities and federal funding uncertainties. When Sage partnered with HFMA last year to survey healthcare leaders about the factors influencing their finance strategies, “The results were surprising in that there’s a lot on everyone’s minds,” said Melissa O’Dowd, who leads the healthcare industry vertical at Sage.

“No single challenge stuck out among the rest,” she said.

HFMA recently hosted a webinar with Sage to better understand the financial challenges that healthcare leaders are juggling and how they’re leveraging analytics and automation to alleviate these pressures.

Moderated by HFMA’s director of healthcare policy and mission alignment, Todd Nelson, the webinar examined healthcare finance hurdles and solutions with Julie Duckett, CFO at BayCare Clinic in Green Bay, Wisconsin, and David Lombardi, CFO of Cecelia Health in New York, along with O’Dowd.

Essential takeaways

Here are a few key highlights from the webinar.

1. Ensure financial forecasting relies on accurate data.

The Sage survey highlighted rising operational costs as a top challenge for nearly 70% of healthcare leaders, closely followed by reimbursement complexities at 66%. Connecting the dots between increasing expenses and incoming reimbursements requires accurate reporting. Unfortunately, the biggest tech hurdle obstructing financial forecasting is inaccurate data. The survey found that data accuracy is the biggest challenge in meeting the needs of internal stakeholders, according to nearly 90% of respondents, while the lack of reporting capabilities is another major hurdle for more than 81%.

The solution, CFOs agreed, is access to accurate, real-time data. Marrying outstanding claims with current operating expenses is imperative to understanding your financial position to make strategic decisions, O’Dowd said.

“Too often, we see folks pulling data out of their systems and then trying to manipulate it in Excel, and then trying to use it to make decisions,” O’Dowd said. “The second you do an export, it’s not up to date.”

She encouraged CFOs to lean into open API integrations instead of relying on data that’s stuck in spreadsheets.

“Having that information all in one place to give the most accurate financial picture of the business is critically important,” she said.

2. Alleviate administrative burdens with automation.

Another approach to controlling rising operational costs, particularly related to labor, lies in leveraging AI solutions and workflow automation to make employees more efficient and productive. The Sage survey suggested that automation is essential to accessing real-time financial data for 54% of respondents, with 49% relying on automation for revenue analysis.

“We’re all trying to figure out how to stem rising labor costs by automating and making our people more efficient,” Lombardi said. “It doesn’t necessarily mean pure reductions in force, but it does mean getting people to work on value-added activities and pushing more volume through the system with the same amount of people, and we believe that AI can do that.”

For example, Cecelia Health is implementing AI scribe solutions to reduce documentation time for clinicians. Meanwhile, the organization is also exploring financial reporting workflows that can be automated to allow the finance team to focus on strategic course correction rather than creating or analyzing reports.

However, Lombardi said that investing in these solutions is only the first step; CFOs must closely track the results of AI investments to ensure that they’re delivering ROI.

“That certainly is a reduction in the burden of their work,” he said of implementing scribe software, “but at the end of the day, I still need to push volume through that to actually gain margin improvement. One of the things I stress to my leaders is, as we begin to spend money on these things, we have to ensure that we unlock efficiencies.”

Automation has also enabled BayCare to centralize and standardize processes such as prior authorization and procurement, reducing duplication between specialties.

“Along with consolidating that staff, it’s also allowing us to make processes more consistent across specialties,” Duckett said. “It’s allowing us to build some automation into the process so we can catch those areas that need more attention and correct those processes where needed. Overall, improving processes and building automation allows better reporting and tracking, which enables us to maintain quality through cost measures.”

3. Empower employees with actionable information.

To unlock the potential of digital tools when managing financial complexity in a healthcare organization, data can’t be locked away in certain departments. Information must be easily accessible by the teams who need it to make decisions.

“We are doing our best to put information, reporting and dashboards right at the fingertips of our clinicians and our operators,” Lombardi said.

Instead of everyone relying on the finance team to run reports or analyze data for them, he said, “We’re really working hard on becoming more self-service so that the finance team is doing more value-added work and ultimately providing course correction.”

Making dashboards available to users across departments can “break down data silos,” O’Dowd said, finally making interoperability a reality.

“The finance team has a unique opportunity to bring together data from all different types of sources — whether it’s an EHR system or a practice management system, payroll and workforce data, all of that statistical information alongside the financials — and present that in a way that makes sense,” O’Dowd said. “It’s powerful to be able to pull it all together to tell a story.”

Not only does self-service data save employees from toggling between multiple systems to cobble together various reports, freeing them to focus on more strategic work, but it also empowers them to take ownership over their metrics. At Cecelia Health, for example, improved access to data has motivated users to boost their performance.

“It wasn’t necessarily our intent, but they start to benchmark themselves against each other, and that actually creates a healthy, competitive environment,” Lombardi said. “Just having that in the forefront and people seeing that naturally makes them just want to step up, and that’s another way to make people more productive and more efficient. It’s starting to trickle down into healthy competition that’s ultimately good for the organization.”

Taking proactive action for the future

Survey respondents largely agree that the more confident they are in their organization’s financial planning, reporting and analytics tools, the better able they will be to forecast their organization’s ability to respond to a rapidly changing environment. By keeping a pulse on ways leading organizations are leveraging tools and data to protect and strengthen financial performance, CFOs can more effectively position their organizations and their teams to navigate challenges with agility.

About Sage

Sage delivers market-leading cloud financial management software trusted by thousands of healthcare organizations. Designated as Peer Reviewed by the HFMA and recognized by the AICPA as the preferred financial application, our HIPAA-compliant solution, Sage Intacct, brings together clinical, financial and operational data from disparate sources, streamlines accounting activities, and provides real-time visibility into the metrics that matter. This enables today’s healthcare finance leaders to have a more complete view of the health of the organization and have the information they need to inform key stakeholders and make strategic decisions for the business. For more information, visit https://www.sage.com/en-us/industry/healthcare/

_{This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.}