From lowering overall costs to potentially increased reimbursements and revenues due to greater patient satisfaction and value-based programs, putting patients at the center of care is essential for improving health outcomes and ensuring financial sustainability.
With these critical goals in mind, many healthcare leaders prioritize an enterprise-wide approach to patient-centered care, recognizing the connection between ensuring robust financial performance and the quality of patient-centricity. Chief financial officers (CFOs) shoulder the responsibility of navigating complex financial terrain to create opportunities for innovation, playing a pivotal role in supporting the success of patient engagement, patient experience, personalization, patient-centered analytics, and more. Since patient-centered care can encompass initiatives across clinical, operational, and technical domains, leaders should explore top strategic focus areas that can strengthen these efforts.
Enterprise technology investments
According to Gartner®, many healthcare executives have “identified improving operating margins (57%) and revenue growth (35%) as the critical outcomes of their enterprise digital technology investments.”i Integrating health IT tools into various focus areas is a powerful strategy for achieving financial objectives. Patient engagement technology, which includes digital front door initiatives, ranks within the top three technology investments for healthcare providers in 2024. Since the digital front door is a gateway to comprehensive services, it offers patients a streamlined path to access various care options and resources. Recognizing the importance of optimizing the digital front door can improve patient experience, reduce referral leakage, and drive revenue growth.
Investing in patient engagement technology also enhances post-pandemic investments in remote care and reduces operational costs. Leaders continue to spearhead investments in technologies that help improve accessibility, convenience, and efficiency while optimizing existing technology investments, such as electronic health record (EHR), enterprise resource planning (ERP), and customer relationship management (CRM) technology platforms, to benefit patients, clinicians, and the financial bottom line.
EHR and ERP platforms are the backbone of modernized healthcare IT infrastructure. Financial leaders champion workflow optimization to improve operational performance, enhance data analytics capabilities, and better enable decision-making processes. Workflow automation is a powerful facet of optimization efforts when focused on increasing labor efficiency and allowing staff and clinicians to operate at the top of their capabilities or license. Leading CFOs champion automation initiatives to streamline workflows, reduce manual errors, and reallocate resources for maximum impact.
Cost containment within labor shortages and contract labor
Amid escalating costs and dwindling reimbursements, addressing labor expenses is a pressing strategic focus for CFOs. According to Kauffman Hall, daily labor expenses continue to burden healthcare providers, rising 17% higher in March 2024 compared to March 2021. By default, labor expenses often account for at least 50% of a hospitals’ total expenses, as the American Hospital Association estimates, making this a significant budget area to experience such a sustained increase. As healthcare finance leaders seek to contain costs and find solutions to address the unsustainable expense of contract labor, these efforts may benefit patients by potentially reducing burnout and medical errors resulting from staff shortages.
Pennsylvania-based Guthrie Clinic used a virtual nursing program to reduce its reliance on contract nurses and save $7 million in labor costs over 12 months. Virtual nursing allows for a more connected experience with fewer interruptions and better communication between patients and their care teams.
Transforming operating models
Another strategic area where financial improvement and patient-centered care work together is through site-of-care shifts and operating models. Since the pandemic, the industry has witnessed an outpatient surge across service lines. According to Advisory Board, future volume growth will be concentrated in outpatient settings with an expected increase of 10% by 2027. Many CFOs are embracing these changes with proactive strategies and agile risk management practices. These efforts support resiliency in operations and are essential to mitigate disruptions and uphold continuity of care for patient communities. Cash flow and cost optimization can occur when appropriate service lines are expanded or adjusted to care sites that meet patients’ preferences. Engaging with a strategic partner to conduct cost-benefit analyses, return on investment (ROI) calculations, and forecasting future revenue streams can help organizations assess the financial viability of new or expanded service lines and provide guidance in prioritizing investments and allocating resources more effectively.
The success of patient-centered care initiatives and financial performance are intricately intertwined. In collaboration with clinicians, CEOs, chief technology officers, and other health system leaders, CFOs are at the forefront of ensuring every patient receives high-quality and personalized care. By strengthening foundations for financial sustainability, healthcare organizations can navigate challenges and chart a course toward patient-centered approaches across every part of the enterprise.
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Andy has over 25 years of professional services experience supporting healthcare organizations with strategic programs that positively impact financial and operational performance. He has advised large healthcare providers as they embarked on finance, revenue cycle, supply chain, and digital patient experience improvement transformations, enabled by Information Technology. His passion is to help clients achieve strategic priorities while improving financial outcomes and performance across key indicators.
i Potts, R. (2023, December 27). How healthcare CIOs can modernize revenue cycle management solutions (G00806100). Gartner. https://www.gartner.com/document/5061431
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