U.S. hospitals and health systems endured 10 grueling months under the COVID-19 pandemic in 2020, as decreasing volumes, rising expenses, and unstable revenues strained an industry already burdened by tight operating margins.

The challenges continue to mount in early 2021 as COVID-19 cases climb, pushing COVID-related hospitalizations to record levels.1 For many healthcare Finance leaders, the pandemic has been a trial by fire that is testing operational and financial resources and processes like never before.

Our new report finds that healthcare leaders are more confident their organizations can adapt swiftly to unexpected changes as a result. Eighty-three percent of healthcare finance leaders said they are confident in their teams’ ability to quickly adjust strategies and plans in response to sudden changes. That is a remarkable increase from just 24% heading into 2020, according to Syntellis’ 2021 Healthcare Financial Technology Trends report.

Even so, many organizations continue to face common barriers due to outdated and inefficient tools and processes. This is the first of two articles highlighting the report findings, which feature insights from Syntellis’ annual survey examining trends and priorities in healthcare finance drawn from responses by 161 healthcare finance professionals nationwide.

 

An increased focus on flexibility

More than any other disruptive force in recent healthcare history, the turbulence of the pandemic has proven the importance of building agility across management and operations. Hospital and health system leaders are reexamining existing processes and seeking opportunities to improve flexibility.

While the COVID-19 crisis has reinforced some organizational strengths, it also has revealed some common weaknesses within the industry. The report found:

  • Resource restraints remain a barrier. Nearly 60% of survey respondents said their organizations were completely unprepared or had learning to do in this area at the onset of COVID-19, compared to 34% heading into 2021.
  • Personnel proved to be a strength. Nearly three-quarters (74%) said their personnel are prepared with the necessary skill sets for 2021, compared to 54% in the early days of the pandemic.
  • Communications confidence increased. Eighty-two percent feel prepared to handle communications and process changes in 2021, up from 51% in early 2020.
  • Tools and technology require ongoing focus. Nearly 30% lack confidence in their tools and technology to support financial tracking, management, and reporting changes in 2021, compared to 54% at the start of pandemic.

The report identified financial planning as a major area of opportunity for enhancing efficiencies to ensure financial strength and flexibility in uncertain times.

 

The need for agile financial planning

The survey results show that organizations have been slow to implement more accurate and agile budgeting and planning solutions. Many hospital and health system leaders cited a need to build greater flexibility into their financial planning tools and processes.

Twelve percent of respondents said they have replaced annual budgeting with rolling forecasts. While still low, that is nearly double the 7% in the prior year’s survey. About half of respondents said their organizations use rolling forecasts as a complement to annual budgeting, suggesting a steady migration to more timely and responsive budgeting processes.

The survey also indicated a sizable decrease in organizations with budgeting cycles of six months or more, suggesting that volatility brought on by the COVID-19 pandemic compelled many to adopt a faster budget cycle. Despite these promising signs of progress, nearly one quarter of survey respondents said they continue to use spreadsheets for budgeting, and a full 67% have not yet moved to cloud-based performance management/budgeting and planning applications.

Looking to 2021 and beyond, healthcare finance leaders said financial planning will see greater focus on operational budgeting, reporting, and analysis (see Figure 1). Nearly three out of five respondents (59%) said their organizations will make rolling forecasting a priority moving forward.


Figure 1. Financial Planning and Analysis Initiatives Identified as Primary Focus Areas for 2021

Figure 1. Financial Planning and Analysis Initiatives Identified as Primary Focus Areas for 2021
Source: Syntellis 2021 Healthcare Financial Technology Trends: Evolving Priorities and Best Practices

 

The survey results suggest that the challenges of the COVID-19 pandemic and resulting economic turmoil propelled some progress in 2020, as hospital leaders realized the necessity of enhancing flexibility in healthcare finance. Even so, many are not leveraging the latest tools and technology to help them achieve optimal results. The report recommends that organizations improve flexibility and agility by:

  • Implementing a unified suite of financial planning and management solutions to improve reporting, leverage best practices, and reduce maintenance
  • Adding rolling forecasting to the annual budgeting process
  • Configuring software to meet the unique needs of stakeholders, so key decision-making data and insights are easy-to-use and access

Part 2 of this series will explore additional findings and recommendations of Syntellis’ 2021 Healthcare Financial Technology Trends report relative to cost management, and maximizing data and analytics to build financial health.

Read the full report

 

Caspani, M., Szekely, P: U.S. tops 21 million COVID-19 cases with record hospitalizations as states ramp up vaccinations, Reuters, Jan, 6, 2021.

Meet the Author
Kermit S. Randa

Kermit S. Randa

As Chief Executive Officer of Syntellis Performance Solutions, Kermit Randa oversees all product development, sales, implementation, training, and support functions for the firm’s Axiom Software solutions.
Learn More About Kermit S.

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