Embracing new technology while reducing expenses: The New Age Healthcare CFOs have their tasks cut outFebruary 16, 2021 6:21 am
Gone are the days when the Finance function was merely number-crunching machinery. The CFO’s role is no longer unidimensional. The CFO’s involvement has more to do with strategy and proactively taking decisions that would ensure the long-term financial health of the organization. The scenario is no different in the healthcare industry. Deloitte’s framework, Four Faces of the CFO, provides a better understanding of a healthcare CFO’s roles and responsibilities:
A Smarter Steward
Thanks to the rapid digitization of many verticals in healthcare organizations. The CFO can now access real-time data from different departments at a moment’s notice. CFOs can now save on time and effort with intelligent ERP systems integrating the entire organization under one umbrella. With data driven applications, CFOs also derive insights from the ERPs, anchoring financial decision-making with much more conviction.
All said and done, the CFO is still the steward who has to ensure everyone’s salaries are paid on time, taking care that the hiring and firing costs are under control and ultimately staying on top of the changes. Needless to say, cost saving at any part of the value chain, be it reducing the medication costs or reducing the supply costs will have a tremendous, positive impact on the company’s financial health and the CFO’s morale.
An Efficient Operator
The healthcare CFO needs complete control over the supply chain, now more than ever. Then, he/she has to identify the weak links in the chain, as in, the components that are bleeding money for the firm. While investing in technology like RPA to automate repetitive tasks increases efficiency, the fact still remains that proactively reducing medication costs can unburden the finance team to a large extent.
An efficient CFO does not have to wait for reports to make necessary efforts to make headway in saving expenses whilst improving patient care.
A Calm Catalyst
The CFO has to arrive at the right combination of the company’s investments into multiple channels. To avoid last minute panic in taking crucial business decisions, all cost saving measures should be taken pre-emptively in the first two quarters of the year.
The CFO will have the last word on multiple decisions: increase in procurement, a change in pricing and/or process improvements through digital transformation. To become agents of change, CFOs need to be able to free up from other burdensome tasks like cost saving early on in a financial year. This will allow them time for technology adoption to gain better strategic perspectives into the functioning of every department.
An Astute Strategist
The CFOs have to align the annual finance strategy with the future business goals. This alignment would mean the CFO coming up with innovations to reduce costs and/or increase profit margins. This means marrying the analyzed data with efforts taken to ensure financial success, which can then be reported to all the stakeholders.
Many CFOs have been successful in pivoting their entire business models towards more economically viable channels of operating, resulting in better profits and higher customer acquisition rates. While going digital can open new revenue streams, frugal innovations can cut down unnecessary expenses.
Patient Care: The Differentiator
Timing always ascertains the success of the relationship between a business and the customer. While AI and predictive automation can help streamline supply chain and logistics, patient care will be the differentiator. After all, it is good patient experience that is going to ensure patient loyalty and retention, which in turn decides a healthcare company’s finances. Simply put, reducing medication costs should not compromise on patient care. Pill cutters can greatly help in this direction.
All under one roof
Most healthcare firms have had one shortcoming or the other: they’re either lagging in terms of technology or in terms of patient care. To have both under one roof is the challenge most CFOs go through with. With the integration of AI and ML, redundant complexities will be removed and a seamless patient experience will come about.
Anticipating patient needs: Affordable Healthcare
With healthcare costs only increasing by the day, most healthcare clinics pass on the burden of extra costs to the patients. Even with the most sophisticated technology, a patient can only spend so much in a year. So, to ensure better patient care, healthcare and managed care have to become more affordable. With enough data to anticipate patient needs and back this up thanks to increased technological adoption, a CFO will have no way to buck this trend.
Enhanced Patient Experience
Be it retail or healthcare, the top differentiating factor is usually good Customer Experience. Customers are often infamous for being fickle-minded; no matter how good your customer experience customer loyalty was still arbitrary. However, of late, they have turned the page to reach a place where a clinic with good patient experience does retain its customers. It is time to face the truth: adapt now or lose your customer. The same is true for your competitor and hence, the whole healthcare industry has become something of a level playing field.
Given that data is gold, you can use any technology that mines and processes data to circle on the aspects of patient care you have to work on, fix them before things get out of hand, own your customer experience and beat your competition fair and square in the process.
The possibility of New Revenue Streams
The strongest case yet for better patient care is that new revenue streams are opening up, from unexpected quarters. (no puns intended) If you work on better patient care for a given time, integrating data continuously, you will observe that simple tweaks to existing operations could reduce costs substantially. Besides, you can eventually take to subscription-based models as you realize increased profit margins as opposed to traditional channels. With deeper insights into patient needs, any healthcare organization will be able to unlock new revenue generation models having a pronounced, positive impact on the bottom line.
Integrated Patient Care: The Future
The future, in a sense, is now because many top healthcare companies have started using processed data and creating insightful data models for patient care. Even if your company has miles to go to get there, you can start simple: you can engage in simple cost cutting measures by reducing medication costs or supply costs without compromising on patient care. While you are on this, your company will eventually use the savings to catch up with the latest healthcare trends.