From operating margins still causing challenges for many health systems to consistent worries about healthcare workforce shortages, the current economy has trumped cost reduction concerns for CFOs in 2024, according to a new Deloitte annual survey.
Deloitte's annual survey of healthcare financial leaders has been conducted since 2020 by the Deloitte Center for Health Solutions. It features responses from more than 60 health plan and health system CFOs.
Here are eight findings from the survey:
1. Cybersecurity was the second biggest organizational priority and concern for financial leaders in 2024. The impact of the upcoming U.S. election was No. 3, with consumer engagement and trust at No. 4 and supply chain disruption at No. 5.
2. Cost reduction was the top priority and concern for financial leaders in 2022 and the third largest priority in 2023. It fell to No. 17 in 2024.
3. Around 25% of surveyed CFOs shared that over the last three years, their operating margins fell below goal. Seventy-eight percent of finance leaders said operating margin improvement is among their top three organizational priorities.
4. "To help achieve their organizations’ financial goals, finance leaders should implement new levers, technologies, or methods—and they should act quickly," the survey said. "If they fail to reach their margin goals, they might need to reduce their services and offerings, merge with or be acquired by another organization, or cut operational expenses to the point that it affects quality, which might conflict with their mission."
5. Advanced cybersecurity technologies have seen investment from 84% of the CFOs surveyed, with 60% prioritizing core technology investments, like customer relationship management solutions.
6. Nearly 2 in 3 of the surveyed financial leaders shared plans for venture investments in health or non-health startups in the next two years.
7. CFOs said the primary lever for cost reduction is optimizing the workforce. A strategic use of innovative practices and technology can aid leadership in improving efficiency and fostering a healthcare workforce sense of purpose, the survey said.
8. Only 24% percent of health system CFOs and 20% health plan CFOs said they are focused on partnerships and alliances. And despite the apparent popularity of mergers and acquisitions, 49% of CFOs said their organizations faced regulatory hurdles and 41% said market uncertainty is a concern for them. An increase in regulator scrutiny has also made it more challenging for dealmaking over the last year, CFOs said.