Hospital and health system CFOs (chief financial officers) consider identifying/managing cost reduction initiatives as their most important performance management activity, yet 70 percent of finance executives in a recent survey reported that they don’t have the proper tools in place to do so.
Conducted and released recently by Skokie, Ill.-based Kaufman Hall, a provider of strategic and financial consulting services, the survey addresses the rapidly changing healthcare business environment, and the growing role and importance of the CFO function to inform strategic business decisions that will impact long-term success. The study included senior finance executives at more than 350 hospitals and health systems on performance management realities, priorities and challenges.
The results of the survey revealed a nearly 30-percent rate “identifying and managing cost-reduction initiatives” as the most important performance management activity for their organizations (from a list of five choices). However, 70 percent have cost measurement tools that are too simplistic or provide inaccurate, data that can’t be trusted; or worse yet, have no tools in place at all.
What’s more, most CFOs reported that they have limited confidence in their organization’s ability to manage the financial impact of evolving business conditions with current processes and tools. Only 15 percent say their organizations are “very prepared” to manage evolving payment and delivery models with current financial planning processes and tools.
As such, surveyed CFOs attested they want to do more to leverage data and analytics and to improve strategic decision making; 90 percent think their organizations should be doing more to leverage financial and operational data to inform strategic decisions.
Further, long budgeting cycles are preventing value-added analysis by finance teams; 69 percent surveyed said they have a budget process that takes more than three months from initial rollout to board presentation, and the process takes more than six months for 9 percent of these organizations.
In the end, hospital and health system CFOs want and need enhanced access to high-quality analytics and reporting, with 56 percent reporting a lack of access to clean, consistent, and trusted data, according to the survey.