Hospital Financial Automation Under 25% for Most Organizations

Few provider organizations are widely engaging in hospital financial automation, according to a new Black Book CFO survey.

Only 20 percent of the nearly 1,600 hospital and health system CFOs, VPs of finance and revenue cycle management, and other senior finance leaders surveyed said more than a quarter of their organization’s financial and revenue cycle operations were fully digitized or automated.

Most respondents (48 percent) said between one and 25 percent of their transactional work has been automated since 2017, and another 30 percent reported that none or close to none of their finance work has been digitized in the last two years, the survey revealed.

The majority of healthcare organizations are missing out on the benefits of automating hospital financial work, the survey uncovered.

Eighty-six percent of CFOs and other senior finance leaders who digitized more than 25 percent of their financial process said the return on investment (ROI) generated from automating healthcare financial processes was substantial.

Hospital and health system CFOs are increasingly seeking opportunities to improve or implement technologies to stay financially healthy as health system margins sink below three percent nationwide. Capturing all revenue through new, innovative software solutions is also becoming more critical as the industry shifts to complex payment mechanisms under value-based care, the survey explained.

In fact, 80 percent of CFOs and other senior leaders in another recent Black Book survey reported that healthcare finance technology transformation is an “absolute and immediate need” for their organization’s long-term survival.

Overall, CFOs and their organizations are having to become more tech-savvy to adapt to the more complex and digitized healthcare landscape.

The survey found that healthcare finance technology will have to shift from being back-office focused to having “to disrupt itself” to meet the needs of consumers, policymakers, internal stakeholders, and other influences in healthcare.

“The CFO's role in managing technology decisions across the health system is shifting the role to requiring an updated set of technical skills confirming the assumption that technology responsibilities will be a primary part of the job descriptions of healthcare financial leaders,” elaborated Doug Brown, president of Black Book. “Financial managers must have a strong technical background and CFOs will require the data science skills that currently fall under the health system CIO.”

CFOs are already starting to experience a shift in their responsibilities, especially regarding healthcare technology purchases and implementations. Health system CFOs in the survey reported that their responsibilities in 2019 included:

• Assuming risk associated with health system IT decisions – 98 percent
• Influencing technology purchases for finance areas – 97 percent
• Monitoring and improving performance risk metrics – 90 percent
• Directly influencing the management of finance department technology – 80 percent
• Influencing the technology purchases for non-finance areas – 66 percent
• Using data analytics to inform technology strategy for the entire organization – 44 percent
• Managing IT investment budget – 44 percent

CFOs are also setting their sights on further healthcare finance technology transformation, the survey found.

Eighty-three percent of financial leaders ranked big data and advanced analytics as the top potential disrupter to their current financial workflows and operations. Another 92 percent also said their healthcare organization is taking an active role in addressing technology and analytics-fueled disruption.

Additionally, 96 percent of finance leaders in the survey reported a need to develop talent to address advanced healthcare finance technology and analytics.

“The top concern for almost every healthcare leader including CFOs is cost control through better data and analytics, and the role of health systems CFOs has progressed far from the traditional accounting, reporting and compliance focus to technology, strategy, innovation and consumer experience,” explained Brown.

Helping CFOs and other senior leaders advance hospital financial automation are vendors offering a wide range of solutions and consulting services. According to the Black Book survey of 1,500 health system leaders, the top healthcare finance technology and consulting vendors in 2019 included:

• Provider contract management and optimization solutions: Axiom by Kaufman Hall
• Revenue recovery and accounts receivable solutions: TransUnion
• Enterprise financial planning and revenue cycle management consultants: Kaufman Hall
• Complex claims solutions: Argos Health
• Enterprise business decision support and cost accounting solutions: Axiom by Kaufman Hall
• Enterprise patient master index and clean-up: Verato
• Patient payment technology and software: Waystar
• Patient revenue analytics solution: RevSpring
• Inpatient claims management systems: Waystar
• Ambulatory claims management and physician clearinghouse solution: Availty
• Chargemaster solutions nThrive CDM
• Enterprise document management and imaging: Ciox Health
• Enterprise resource planning (EPR) solutions: Premier ERP
• Patient access software: Recondo Technology Patient Access
• Hospital inpatient accounting systems: MEDITECH C/S Patient Accounting

For end-to-end revenue cycle management technology, hospital systems and integrated delivery networks ranked Optum360 number one in terms of client experience.