Over the past 18 months, healthcare organizations have confronted significant disruptions in their operations created by the COVID-19 pandemic and the related acceleration of pre-existing trends. The work performed by the business offices and the overall administrative functions of healthcare organizations increased dramatically over the past decade and will only continue to increase in complexity. Healthcare organizations must have an efficient and high-performing business office when meeting these challenges, and can do so by developing a specialized and agile workforce to manage the increasing volatility and digitization of workflows.
The business offices of healthcare organizations require a skilled workforce in which demand for workers currently exceeds supply. The decrease in available workers is partially driven by fewer college graduates with business and accounting degrees and often results with unfilled positions, as qualified candidates choose the positions with the highest pay and benefits. The shift to work-from-home adds additional pressure to business offices that have not adopted remote work capabilities, as workers increasingly demand work-life flexibility as a means of balancing the increased work-related stress caused by the worker shortage and pandemic-related additional responsibilities.
Business offices that have not pivoted in response to these pressures are caught in a feedback loop that increases stress on current operations and discourages potential new hires from applying for open positions. Healthcare organizations must respond by both formulating a plan to recruit skilled talent and identifying opportunities that increase overall department efficiency, such as process automation, improved workflows, and aligning worker responsibilities with their key strengths.
Chief Financial Officers (CFO) of healthcare organizations acknowledge the need to review and potentially redesign their administrative operations, but it is rarely a top priority until daily operations are affected, which is often too late to avoid additional and more significant long-term consequences. CFOs are often not sure where to start a redesign effort, do not want to create further disruption in already strained workflows, or do not have the resources to adequately implement a plan. This delay carries significant risk, including administrative functions becoming overburdened and thus not supportive of the CFO and business operations of the healthcare organization. An experienced independent consultant is often a practical solution to these issues, as they approach an organization without needing to directly support the CFO’s goals. Additionally, the consultant’s experience gained from assisting other healthcare organizations brings new and proven insight to a business office’s operations and provides feasible solutions for the office. A consultant’s first priority is an evaluation that includes an overall understanding of business office workflow and areas critically needing revision.
An evaluation of the healthcare organization’s business office function typically includes the following areas of consideration:
- Automation – Are there functions being repeatedly performed without producing added value? An area in which we see this occurring is the budget cycle; each stage often utilizes spreadsheets that go back and forth between departments, then the data is manually inputted into the budget module. The same work in the spreadsheet was probably created several times due to lack of collaboration between each workgroup.
- Outsourcing – Is there a function that can be outsourced to a vendor or a contract employee? The new remote work environment is creating opportunities to outsource certain business functions. The result is efficiencies through scale as well as reduced risk through specialized expertise found outside the organization.
- Evaluation of Priorities – Has your business office performed the same tasks on the same day each month for the past 10 years? Is there a process to regularly prioritize tasks? Delaying certain functions to address more immediate and critical needs is necessary for a proactive organization but is often resisted due to the structure of office operations. For instance, delaying month-end closing by one day to instead focus on a more immediate concern may be in the office’s best interest.
- Transparent Management of Employees – Do you know what your employees are actually doing? Are their skills properly utilized and are they trained in current expectations? Periods of workforce turnover often create knowledge gaps when experienced workers retire before their replacement is identified. Management should periodically assess responsibilities and skill sets of each worker. This provides an overall understanding of office capabilities and whether certain tasks should be shifted to best align responsibilities with worker skill sets.
- Remote Work – Are there functions that can be performed remotely? This may require a significant change in the office’s culture but can provide access to a greater talent pool and increase overall worker satisfaction.
- Identification of Subject Matter Experts – Are their opportunities to develop core competencies around a strategic capability or process for the organization? One individual or department is assigned responsibility for all aspects of a category or service line. This empowers employees to learn more and take an analytic approach to solve new challenges.
- Inter-Office Collaboration – Are employees within the business department empowered to actively collaborate with individuals outside their office? For instance, individuals responsible for forecasting cash flows should speak directly to the facilities director to understand when significant outflows for capital spends should be expected. This may seem intuitive but is often not the case if the two groups do not interact on regular basis.
The solutions identified will require long-term investment of time and capital. Healthcare organizations should develop a roadmap to facilitate the evaluation’s recommendations and can usually be separated into two buckets: systems and people. The first step will be to identify processes and systems that can be streamlined, automated, or outsourced. This helps determine the true capacity needed by the organization to manage workflows.
Once effective processes are established, the organization will assess and enhance the capabilities of its workforce. This includes assessment of capabilities and training needs, evaluating department processes, as well as gaining an understanding of efficiencies that can be gained by simply improving morale and collaboration. Helpful recommendations can include developing a more robust and transparent method of evaluating performance, allowing staff to train others, empowering staff to solve problems, and encouraging development of professional relationships across the organization.
Business offices are often seen as a cost driver that should be minimized, but the past 18 months have shown us that a healthcare organization’s business office plays a critical role in responding to business challenges, analyzing new opportunities, and managing risk. Utilizing a holistic review approach to business office operations helps ensure that current challenges are met with robust processes, a skilled workforce, and a strong model for long-term success.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.