I recently attended Region 8’s Mid America Summer Institute. It was a terrific experience, with about 300 participants and timely, relevant content. Two key themes emerged:
- The top priority for health systems is the workforce shortage made worse by the rapidly rising cost of temporary labor in a pool of deepening operating losses.
- The number of vendors/business partners that have solutions and experience with converting select tasks to automated process and robotics is rising. Actual experience supporting the proposed business case and ROI are slowly coming to the surface.
These two themes were punctuated for me when Mayo Clinic CFO Dennis Dahlen referenced a McKinsey analysis during the CFO roundtable. Over the past 15 years, 99% of increased healthcare productivity has been achieved on the backs of our workforce. Conversely, productivity in every other industry was achieved through nonworker assets and technology advances first and labor second, at a 3:1 ratio.
So what does this mean for those of us working in healthcare finance?
Hospital and health system leadership: Here we are facing another nursing shortage. I fear this is the tip of a much larger iceberg than those we’ve faced repeatedly over the past three decades. Baby boomers are retiring. Universities struggle to find adequate faculty staffing to graduate enough nurses to satisfy demand. These same issues exist for diagnostic technicians and pharmacists.
It’s time for us to realize fully that our workforce problems will not now, or ever, be solved by better recruitment strategies, stronger engagement efforts or wage increases. While these are important and cannot be ignored, there aren’t enough capable people willing to fill this need. There is, however, tremendous opportunity to be gained from more urgently embracing technology, including robotics, artificial intelligence and everything else in this space. Those doing so will benefit by closing the gap on labor shortages while shifting mundane and repetitive tasks away from their most precious and increasingly scarce resource.
Vendors and business partners: While I’m impressed with your vision, technology and product offerings, it’s important that you understand health systems will not bite on simple promises and vague “use cases.” We’ve been down this road over and over, investing in technology, implementation and change management, which only rarely converts to hard savings and cost reduction. Health system capital (money and people) is too scarce to fund a fishing trip. Please: Sharpen your pencil! Simplify your business case. Make it impossible for healthcare organization leaders to say “no.” This requires hard data, solid testimony and credible financial analysis. Create a simple assessment tool quantifying your value proposition that any finance or revenue cycle leader can complete.
We all want the same thing: Better population health at a lower cost. Let’s ignite this spark together!