The healthcare industry’s expansion brings about heightened complexity in its operations.
Teams are faced with the daunting task of navigating increased regulations, deciphering vast volumes of data, managing numerous leases, and staying compliant with continuously evolving accounting standards. Health executives must accomplish these tasks whilst ensuring healthcare remains affordable and accessible.
Effective financial management focuses on securely mitigating these challenges, allowing organisations to maintain their commitment to delivering exceptional patient care and investing in enhancements, all without neglecting their fiscal responsibilities.
Financial management in healthcare is a multifaceted challenge that can seem overwhelming due to its wide-ranging impact on so many aspects of a healthcare organisation.
Administrative costs make up around 34% of total health care expenditures, and many organisations face difficulties in reducing these costs.
To effectively address these challenges, it is helpful to break them down into core areas to understand where the issues in administration lie. The five core areas include supply chain management, financial consolidation, lease management, data security and management, compliance with financial regulations.
Data management is vital for financial health. It can be challenging to know where to exactly focus an organisation’s energy. This is due to the fact that one of the untapped resources in the healthcare industry is data.
Without robust data management practices in place, healthcare administrators may find it challenging to effectively leverage this wealth of information. Inadequate or inaccurate data can lead to poor decisions and impacts every aspect of your organisation, especially financial health.
Meeting compliance standards and adhering to financial regulations represent increasingly pressing challenges for healthcare administrators. U.S. healthcare organisations have an annual expenditure exceeding $1 million toward their compliance programmes. Creating a culture of compliance in your healthcare organisation demands a commitment to best practices across all departments. Many organisations recognise technology and data management play pivotal roles, but it is also needed to establish a culture that empowers individuals by providing clear standards and protocols.
The industry faces the most significant financial repercussions in the event of data breaches. In 2021, the cost of a data breach in healthcare soared to $9.23 million, nearly double the average figure across all industries. This figure serves as an incentive to prioritise and adopt high-security security standards in all aspect of financial management.
Regrettably, many healthcare supply chains fall short of their potential, leading to challenges such as delayed delivery of essential supplies, expensive idle equipment, and pharmaceutical wastage. This usually occurs due to the complexities of managing supply chains with multiple vendors using decentralised systems that do not allow timely access to crucial information.
Before rushing into solutions to address the issues with your current system, it is best to conduct a thorough assessment of your inventory management processes.
The implementation of a healthcare ERP (Enterprise Resource Planning) system has the potential to solve many of the administrative challenges an organisation faces. However, the abundance of solutions available on the market can make the decision-making process feel overwhelming.
Therefore, taking the time to assess the necessary requirements for an organisation is crucial, as the right ERP system may work at the heart of your organisation for a significant duration, often spanning a decade or more.
Source: Binary Stream
Image Credit: iStock
