Key findings from the study include
• The burdens of the pandemic—combined with an already stressed healthcare system— exacerbated challenges, and
our respondents struggled with managing newly remote staff, finding new revenue sources amidst the loss of elective
procedures, and keeping track of revenue and expenses in real time
• Pre-pandemic and pandemic-related pressures from inside and outside of the healthcare organisation continue to cause
significant frustrations for survey respondents—especially in real-time financial data for budgeting and forecasting
• While change is constant, the pandemic brought about accelerated innovations in areas that many of our healthcare
leaders had not previously considered, including digital transformation and cloud technologies, among others
• The need for modern financial systems that help financial leaders work in an automated and efficient way—wherever
they, and their teams, are located
$328B in hospital revenue loss
81% of physicians lost revenue
The pandemic has taken its toll on every corner of the healthcare provider market. The unprecedented loss—of life, of control, of staff and of money—among U.S. healthcare providers is astounding. This white paper highlights some of the key findings from Sage Intacct’s survey of more than 200 financial healthcare executives and provide practical guidance on what financial leaders can do to adapt their organisations for future success as they emerge from the pandemic.
Healthcare financial leaders are feeling the pressure to do more than report on the status of their organisations—they are being counted on to navigate these tumultuous times and position the company for future success.
According to an American Hospital Association report, hospitals lost $323B in 2020 mainly due to the impact of the pandemic. Physicians also reported significant loss, according to an
American Medical Association (AMA) report last summer that stated 81% of physicians reported revenue was lower than pre pandemic levels, with an average decline of 32%.
Healthcare finance leaders are navigating through a perfect storm
“We were lucky that we replaced our accounting system before the pandemic began, as our AP process was paper-based, manual, and required extensive in person employee interaction that took days of hand-offs, approvals, and filing of paperwork. Since switching to Sage Intacct’s cloud based accounting software, the AP process is noe completed quickly and electronically. Not only are we handling invoices much faster, but we’re able to do it seamlessly with our team working remotely.”
~ Angie Bacon, Dir. of Finance and Accounting, Craig HomeCare
According to the survey, nearly 60% of respondents said the biggest impact the pandemic placed on their organisations were challenges associated with shifting to a remote work environment. Historically, healthcare professionals were expected to be in the hospital or care setting due to the physical nature of what they do. But in attempt to minimise exposure to the virus, a significant portion of workers were asked to stay home and connect virtually. Suddenly, the financial, clinical and operational systems needed to be accessed by thousands of workers from their homes. In addition to the security challenges this brought, many (73%) of their financial management systems were on-premise, making it next to impossible for them to perform their daily responsibilities from home.
Further, the revenue implications of not being able to perform elective procedures was also enormous, as 46% of respondents experienced service disruptions. The COVIDSurg Collaborative, a global organisation focused on measuring the impact of the global pandemic, estimates that 28.4 million elective surgeries were cancelled in 2020. Physicians reported a 70% decline in patient visits from the same period in 2019 according to the AMA report. Many healthcare organisations turned to new business and payment models— from offering non-traditional products and services for sale to adding in new billing models like membership fees.
To help offset the loss of revenue due to service disruptions, 30% of respondents reported to have added new services, such as mental health services, VIP access memberships, COVID testing, vaccinations and even personal care kits like dentists offering whitening kits to perform at home. In November 2020, CMS announced its comprehensive strategy to enhance hospital capacity, which opened the door for hospitals to provide more care services outside of their four walls, such as in the home and via ambulatory surgical centres.
Adding services complicated the revenue and cost models many financial leaders had built, and they found themselves searching for more real-time visibility into what was working and what was not. Many financial leaders found themselves struggling to keep up in real-time with expenses and revenue shortfalls, with 41% reporting that it was difficult to understand and control costs around acquiring pandemic-related supplies including PPE, respirators, and disinfecting solutions and more.
With so many factors changing so quickly, it became evident that it’s no longer enough for healthcare finance leaders to only report what happened last month. The severity of the pandemic’s financial impact required that they expand their reach and influence. They are now expected to not only report what happened this morning, but also predict what will happen tomorrow. But how can they provide this level of detail and real-time insight across their organisations with the outdated financial management systems many had in place?
Top internal frustrations
44% Lack of process automation and organization efficiency
49% Inefficiencies and delays due to multiple, disparate systems
48% Time-consuming, manual monthly close
31% On-premises technology hindering mobility and work-from-home
30% Manual, time-consuming reporting
28% Inefficiencies and delays due to multiple, disparate systems
While the healthcare industry was already undergoing significant change, the pandemic accelerated these activities and forced healthcare organisations to think in new and different ways. When asked what changes survey respondents had made in their organisations during the past six months, 60% of respondents agreed that shifting to a remote work environment was the biggest change they made in 2020.
When asked which innovations their organisations implemented that they would not have previously considered, C-suite and financial leaders agreed again that shifting to a remote work environment was a change they would not have previously considered.
Implementing telehealth was the second most mentioned innovation they embraced. For example, in June 2020, Definitive Healthcare reported a 42% growth in the number of hospitals adopting telehealth, now reaching 75% of all hospitals. The lack of clarity surrounding reimbursement rates for telehealth visits made it challenging for healthcare finance leaders to understand and predict the true financial impact telehealth would have on margins due to the limited analysis tools most financial management systems provide.
Another popular innovation that was mentioned by 24% of respondents was the digital transformation of their operations. While most healthcare executives are already well on their way to leveraging their electronic health record (EHR) systems for clinical care, they are still heavily dependent on paper. In fact, according to a Becker’s Hospital Review article, the average 1,500-bed hospital continues to print 8M pages a month, spending $3.8M each year. In a January 2020 Software Advice study of 1,000 physicians, 44% admitted to still using paper charts despite the fact that billions of dollars have been paid for physicians to adopt EHR systems. By transforming into more digital-first organisations, healthcare organisations are not only able to save money, but are also able to share important clinical, statistical, and financial information instantaneously across their organisation.
In line with the digital transformation trend, 16% of survey responders reported greater adoption of cloud technologies. As mentioned previously, giving remote workers access to applications via the cloud was paramount. With this move came new security concerns. Read more by downloading the whitepaper below.
Contact us at Akuna Solutions and explore with a Sage Intacct implementation specialist how to leverage the most modern technology available today to support your organisation’s mission.
Photo by Artur Tumasjan on Unsplash