Why Do We Care About Healthcare Finance Management?

The healthcare industry is in a state of transition as, more than ever, patients are more aware of costs associated with the care provided. In many cases, patients are more willing to shop around or explore a second opinion if it means a reduction in their out-of-pocket costs. Healthcare organizations are also experiencing a transition period, as the focus is shifting to more patient involvement-based care and keeping not only those cares but also financial sustainability as the focus of the overall services provided. Additionally, organizations are beginning to understand that patients have more choices than ever. In many cases, feedback can be provided in real-time which typically has a significant impact on the various health systems.  

Another shift within the healthcare industry is the drive of technology as a way to provide high-quality patient care. Some organizations have implemented artificial intelligence within their healthcare system in an attempt to provide a higher level of care, improve quality, and make or modernize procedures that make the interaction more efficient. Ultimately, the goal is to reduce costs and improve the organization’s long-term financial sustainability. It has been established that artificial intelligence and other improved technologies provide clinical support, sometimes better than their human counterparts. These implemented changes provide the opportunity for physicians to return to focus on the true practice of healthcare.  Return on investment with improved technology is not always immediate but it can be used to assist with reporting on clinical documentation in order to improve quality. Certain financial reporting and management processes could be automated, allowing staff to focus more on the necessary organizational and clinical work. This would improve employee retention and satisfaction. 

 Aside from technology and artificial intelligence, we see the healthcare system focusing more on how patient care impacts the revenue cycle, and how financial management in healthcare goes beyond payment plans. Other goals include reducing costs organizationally and focusing more on finance managing through the care protocols to ensure that medical equipment, medical processes, and patient care is the focus. If patients receive affordable care when it is needed, the other pieces of the health system and financial management will fall into place. If the COVID-19 pandemic taught the healthcare industry anything, it is how to use technology to its advantage in order to maintain patient care through the use of telehealth, for example. By showing patients and consumers that the organization understands the value of healthcare through responsible growth, the benefits will only rise. Increasing the focus of the motivation to provide quality care that is beyond the actual delivery of clinical services, the long-term benefits to the organization become immeasurable.  

Organizations and physician practices can demonstrate financial responsibility and finance management.  By treating the patient using informed data and customized care in an attempt at reducing costs and increasing the quality of care, they are impacting the bottom line of the organization. The integration of providers and payers create new incentives that match the value-based and payment model shift needed in healthcare. Instead of a fee for service, providers receive incentives based on the outcomes, not on the number of services provided. With the pressure received by providers to offer greater affordability in care and improved results, then there is an understanding of the value of healthcare and its impact on the overall revenue cycle. Most organizations are now sensitive to spending and keeping within the budget, but those organizations respecting financial management by making improvements to control the cost while still providing high-quality patient care, see positive movement.  

The proof becomes clear when the finance teams provide the boards and other stakeholders with the financial reporting to show how they are moving the organization forward.   With the Concordia University of Nebraska Master of Health Administration Program, you have the opportunity to begin to explore these concepts and develop the skills needed to manage at a variety of levels within healthcare organizations.