The financial impact of COVID-19 on hospitals and health systems has caused healthcare executives to rethink the way they handle their hospital’s financials.
A recent survey conducted by Black Book found that although all of the healthcare CFOs surveyed acknowledge the inevitable revenue decrease for this fiscal year, only 12% reported that they plan to cut spending on the digital transformation of their financial systems.
“It would seem most CFOs understand what the pandemic has proved is the need to speed up digital transformation initiatives to not only survive but to prosper in the new normal,” said President of Black Book Research, Doug Brown.
Getting hospital revenue back to the pre-pandemic level will be a lengthy battle for executives. For a typical 1,000-bed health system that performs 40 surgeries a day, the Advisory Board predicts it will take about 25 weeks to complete all surgeries that were postponed due to COVID-19. Add to that the fact that it takes, on average, 45-60 days for providers to receive reimbursement, compounding the woes of the providers.
The Healthcare Financial Management Association (HFMA) surveyed hospital and healthcare executives and found that 89% of respondents expect a decrease in revenue at the end of 2020 compared to their revenue before COVID-19. More specifically, about two-thirds of those surveyed predict a 15% decrease and one-in-five respondents assume a 30% decrease in revenue.
81% of respondents expressed an immediate need for digital transformations. There is a necessity for providing on-demand process-centric and performance-centric dashboards and reports based on advanced probabilistic models using artificial intelligence platforms. Brown also said, “The lack of advanced financial analytic tools, strategic dysfunction caused by failed software integrations and outdated dashboard and decision support systems has put the focus on the immediate technology needs of chief financial officers.”
While an advanced technology system is a requirement to optimize the revenue in response to the public health crisis, pricing models may also shift to accommodate the challenges associated with COIVD-19.