A poll of US chief financial officers (CFOs) in the healthcare sector finds that they identify system integration across the organisation as their main IT challenge, .
The survey of 1,600 hospital and health system CFOs and other financial executives was conducted by independent industry researcher Black Book and found the upkeep of current financial legacy system and lack of financial IT talent as the respective second and third place IT challenges for the group.
“Hospital financial functions, which could benefit immensely from technology investments, have been routinely deprioritised for the past five years because of budgets required for pricey electronic health records implementations,” commented Black Book president Doug Brown.
“Investment decisions have been made even more complex because there has been fluidity in healthcare organisations in determining key performance indicators to measure the financial success of new information technologies like population health tools.”
Among the survey’s other findings 85% of senior healthcare financial leaders said they lacked suitable financial metrics for IT return on investment calculations, compared to only 36% of senior financial leaders in other US industries.
However, Black Book forecasts that over the next five years, new technology adoption by US healthcare finance departments is likely to result in better data quality, data mining for strategic analysis, optimised financial processes, minimised billing errors, reduced operational costs, and streamlined financial reporting.
Although nearly three in four US hospitals have automated their financial transactions processes since 2013; however, most are now outdated, according to 70% of healthcare CFOs.
Four in five healthcare CFOs agreed that investment in digital transformation is critical for health systems to remain competitive and maintain quality patient services.
More than three in four CFOs and 89% of all other senior finance officers in US health systems plan to increase their investment in digital transformations by the end of 2020. Of these, two-thirds forecast an increase of more than 20% by the end of Q1 2020.
Only 9% of respondents said that their digital transformation investment efforts are directed at their regional competition through differentiation, compared to 40% of all other non-healthcare CFOs measured by Black Book cross-industry surveys.
Drivers of transformation
Drivers of digital transformation in US healthcare include reducing costs of care (96%); improving care coordination (93%); preparing for value-based care payments (90%); upgrading credit rating (90%); improving patient/consumer experience (76%); improving regulatory status (74%); and requiring steady, predictable earnings (72%).
“Over the past five years, investment strategies for digital transformation have been influenced among healthcare providers more by the desire to improve operational performance and reduce costs,” said Brown.
“Survey results indicate that future investments are moving towards improving patient experience, and differentiating from the competitors via technological innovations, including the interaction with patient payment and financial systems.”
Shift in investment
Most of the health systems and provider organisations surveyed said they expect a significant shift in IT spending to the CFO’s office next year.
In the second quarter of this year, the top healthcare financial processes that were automated included accounts receivable (80%); financial reporting and control (74%) and working capital management/treasury (70%).
Over the next four years, the top healthcare financial processes to be automated will be financial planning (86%); advanced financial analytics (83%); budgeting and cost accounting (79%); forecasting and decision support (75%); strategic planning (61%); and financial reporting (58%).
“Future investments in healthcare financial automation will focus on better strategy, analysis and predictions for growth,” said Brown.
More than half of healthcare CFOs said that, with few proven cases of digitisation in healthcare finance to follow, the finance team has been content to allow their chief information officers (CIOs) to pursue digital transformation initiatives. However, 94% of healthcare CFOs intend to dedicate more time to the application of digital technologies to financial tasks without CIO input in the future.
Ninety percent of CFOs expect to move to active implementation of transformational software and services in 2020 from the current state of testing.
Like this item? Get our Weekly Update newsletter. Subscribe today