Cost reduction is a leading priority for health system CFOs — in fact, it is the top area CEOs have asked them to focus on, according to a survey from Deloitte.
However, organizations may be focusing too much on traditional ways to achieve efficiencies and overlooking "high-impact drivers," the business management consultant warned.
The Deloitte Center for Health Solutions surveyed more than 60 CFOs of U.S. health plans and health systems and shared their report with Becker's.
"Healthcare finance leaders may have focused on these conventional levers over the years to seek efficiencies and improve profitability," Deloitte reports. "However, these traditional solutions have generally provided diminishing returns over the past few years. Moreover, to overcome the headwinds caused by the inflationary pressure and an uncertain macro environment, leaders should consider other profitability levers. Some of the levers such as digital transformation and service model optimization that may be lower on finance leaders' radars may be more effective drivers of profitability."
Here are the three profitability drivers ranked highest by CFOs, alongside the percentage of executives that ranked the driver in their top three focuses:
1. Improved revenue cycle — 52 percent
2. Addressing talent issues — 48 percent
3. Strengthening supply chains — 45 percent
Here are the four profitability drivers ranked lowest by CFOs — yet identified by Deloitte as potential high-impact drivers:
4 (tie). Optimizing service model — 42 percent
4 (tie). Increased payments — 42 percent
6. Care delivery transformation — 29 percent
7. Investing in digital transformation — 26 percent
"In addition to pulling broader organizational levers to reduce costs, finance leaders are also considering transforming their own finance department roles," the report continued. "Overall, the surveyed CFOs consider finance transformation strategies such as optimizing cost allocations, cost improvement benchmarking and analytics, analytics-led cost recovery, and agile liquidity management to be important areas of focus in achieving greater efficiencies."