What’s Keeping CFOs Awake at Night? A Lot, It Turns Out

July 1, 2022
CFOs and vice presidents of revenue cycle management are facing a welter of issues right now—with few “easy answers” available to them

What’s keeping CFOs and senior revenue cycle management (RCM) leaders in hospitals, medical groups, and health systems, awake at night? Well, it turns out—a lot of things.

As we reported, on Wednesday, June 29, the results of a new survey were released, that revealed some of the top concerns stalking the finance leaders of patient care organizations. That survey, commissioned by the Salt Lake City-based R1 RCM company, and executed by the London, England-based Censuswide research firm, has found those senior finance struggling mightily with a range of challenges, including increasing operating costs, shrinking revenue margins, and severe labor shortages.

R1’s “2022 Mid-Year Healthcare Financial Trends Report,” found the following to be the executives’ top concerns: increasing costs, 25 percent; risk of recession, 22 percent; shrinking margins, 21 percent; reimbursement issues, 17 percent; 17 unidentified revenue leakage, 13 percent; and “no concern in particular,” 2 percent.

And which phenomena are their own organizations experiencing right now? The following results were gleaned: clinical deficiencies due to the labor shortage, 33 percent; data/cybersecurity threats, 33 percent; operational deficiencies due to the labor shortage, 30 percent; issues with price transparency compliance, 29 percent; lowered patient volumes due to COVID surges, 28 percent; navigating value-based payments, 28 percent; increasing expenses due to increased patient acuity, 27 percent, and supply chain issues, 22 percent.

And, even as health system financial executives struggle with such issues as the costs created by nurse staffing shortages (leading to an unprecedented level of the use of travel/agency nurses), health system financial executives are also dealing with issues much closer to home: fully 48 percent of survey respondents reported experiencing a severe labor shortages in their RCM/billing departments, while 34 percent are experiencing a moderate shortage, and 10 percent are experiencing a mild shortage, while only 8 percent reported experiencing no shortage at all. Meanwhile, among those organizations experiencing RCM/billing department labor shortages, 41 percent of respondents cited the percentage of department roles currently vacant in their organizations as being between 51 and 75 percent of positions, while 36 percent cited them as being between 25 and 50 percent of positions. Just 3 percent cited a shortage of employees above 75 percent, while 8 percent cited a level below 25 percent, and 12 percent were unsure.

So: those numbers are extraordinary: nearly half of patient care organizations are experiencing severe labor shortages in their RCM/billing departments, while another 34 percent are experiencing moderate shortages; that’s 82 percent of RCM/billing departments. And then another 10 percent are experiencing a mild shortage—which makes for 92 percent of all such departments.

And all this is happening at a time when both staffing and supply chain costs are higher than ever across the board, and hospital-based organizations in particular, with their high operating costs, are struggling mightily under pandemic care-related financial pressures.

And though CFOs are telling me that the costs of traveling/agency nurses are beginning to lower a bit, those costs remain very high. And on top of that, one unforeseen consequence of the pandemic has been this: on the one hand, it has meant greater flexibility in terms of IT and other non-clinician staff being able in larger numbers to work remotely from home; but that in turn has led to a new kind of competitive pressure, as smaller, rural, and standalone hospitals are competing now for IT, finance, and other operational employees, with multi-hospital systems from all around the country. So if Joe and Jane can work for Memorial Hospital from their homes, they could also work for large, highly resourced health systems hundreds and hundreds of miles away. In other words, an entirely new front has opened up, one that is already making it more difficult for hospital and health system senior executives to fully staff up in a variety of areas, including RCM and health IT.

So what’s “the answer”? Unfortunately, there’s no simple one at all; but one clear element is going to be automation. As Richard L. Gundling, senior vice president of the professional practice at the Chicago-based Healthcare Financial Management Association (HFMA), told me recently, “If the workers are not going to be there, healthcare is going to look at artificial intelligence and what robotics can do. And where there’s a nurse who did follow-up calls, maybe a part of that is done by a robot.” In other words, technology will inevitably need to be leveraged for a variety of purposes related to anticipated ongoing staffing shortages, especially of nurses, but also in RCM and across finance, as well as in health IT.

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