Struggling Hospitals Looking to Invest in New Financial Systems
CFOs at struggling hospitals are reaching for a lifeline – in the form of new financial systems, according to recent survey results from Black Book Market Research, New York City.
"Most hospital CFOs have no choice but to leverage next generation financial system solutions including software and outsourced services in order to keep their organizations solvent. The reimbursement challenges ahead to get paid may require several new applications, and the frank reality is that outdated, understaffed and failing current solutions could quickly close a marginally performing hospital for good," said Doug Brown, managing partner of Black Book Market Research. "
According to the survey of 813 hospital CFOs, vice presidents of finance, and controllers, ninety-three percent of hospitals that are struggling with negative operating margins are investing in coding, value-based support software, collections and revenue-care management (RCM) outsourcing.
"Trends in Medicare reimbursement, declining inpatient volumes, rising expenses and bad debt have most hospitals across the country struggling to avoid a financial stability crisis," Brown said.
Indeed, the transformation of revenue management systems seems necessary as 80% of CFOs with hospitals performing at margins that are currently supporting long-term viability report they already have initiated revenue cycle management transformations. Not surprisingly, then, with so many organizations facing operating margins below the minimal thresholds for long-term financial stability and sustainability, boards and CEOs are moving financial support solutions and outsourcing initiatives to the top of their 2015 capital expenditure priorities
The CFOs at the hospitals that have already moved on to next generation financial systems are now putting money in dashboards, analytics and business intelligence, population health, physician portals, patient engagement solutions, and continued acquisitions, according to the report.