You can’t shortcut your way to prosperity

Balancing growth and prudence in the healthcare industry

As I write this, healthcare providers of all sizes are in the same boat.

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They’re cost-conscious.

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They’re practicing prudence.

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And they’re striving to increase efficiency everywhere they can.

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But this doesn’t mean the road ahead looks bleak.?? ?

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At a recent meeting hosted by the Healthcare Financial Management Association (HFMA), I saw plenty of reasons why healthcare leaders should feel optimistic about the future. The biggest reason was the people.

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Sponsored by Grant Thornton (US) and hosted by Orlando Health , the meeting of large system controllers and senior finance executives convened creative and innovative thinkers from a variety of leading healthcare organizations. And while the program covered a lot of terrain, one thought was clear:

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If you’re a healthcare leader, you need to be prudent — but you also need to look to the future with confidence.

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Here are three ways you can create a more confident and prosperous future.

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Reframe how you analyze cost

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Unlike other industries, most healthcare leaders can’t simply modify costs at will. Yet, right now, many providers — especially individual sites of care — are feeling an acute pressure to do something about rising costs. If you’re feeling that pressure, you should look closely at how your organization contributes to the increase — and therefore, the potential decrease — in healthcare costs. I’m a major proponent of conducting payment analyses and comparisons across different offerings. These analyses could help you find opportunities for efficiencies, but that’s only one of many benefits (and cuts alone won’t lead to prosperity). These analyses can also prepare you for any potential changes that come about (i.e., drug price negotiations), while providing a comprehensive look at your organization’s revenue and market share trends. We all agreed that growth is more important that costs.? Such insights can then inform your recruitment and retention efforts by helping you focus on which types of functions and professionals are delivering the greatest ROI. And speaking of which: Recruitment and retention was another topic that kept surfacing at the recent HFMA meeting.

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Focus on your people

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Competition for top talent remains fierce throughout the healthcare industry; both the number of resignations and vacancy rates, while improving in some areas, are still too high for comfort. Amidst these trends, you must double down on your retention efforts with a thorough employee listening strategy. More specifically, tracking employee well-being takes far more than a one-size-fits-all approach; you need detailed tactics for the different functions of your organization. We also know from recent experience that throwing money at people does not necessarily equate to less attrition. So, you must work hard to be both market competitive in compensation and flexible with benefits. In doing so, you can identify the needs of your top talent and optimize benefits accordingly.

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Embrace change — but don’t wait for it ?

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Employee listening strategies could also reveal which pain points the health system and your people are experiencing on a regular basis. It’s possible those pain points can be resolved through a new enterprise resource planning (ERP) system, and at the HFMA meeting, I hosted a productive conversation about the value that cloud software can add to healthcare organizations. This addition may be precisely what your team needs, but you may face resistance to change. Thus, any new ERP system must be complemented by an operational transformation mindset, as well as a change management plan that meets your people where they’re at and focuses on proactively alleviating their fears and objections. That said, not all pain points will be solved by innovations — and it’s deceptively easy for a culture to fall into the trap of waiting for innovation to solve its challenges. So, rather than wait, it’s vital for you to focus on the ways you and your team can strengthen your business in the interim.

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Without strong fundamentals, the rest of an operation could be built on a flimsy foundation. It may not be as exciting as a new ERP system, but strengthening your business hygiene is a tried-and-true tactic for strengthening the overall health of your organization. And a healthy organization will find it much easier to do what this work is all about in the first place: caring for your patients. ??

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Finally, while we all wait for AI, machine learning and process automation to move from potential to actual, let’s not forget how critical it is to do the fundamentals well today. Basics of growing market share, financial discipline, revenue cycle, supply chain hygiene, and HR practices are all critically important to do well now while we continue to look toward future innovations. ?

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