The healthcare industry faces numerous financial challenges that threaten the stability and viability of healthcare organizations. However, by utilizing financial advisory services, healthcare providers can gain the expertise needed to drive financial health. This allows them to continue providing quality care while remaining financially sound.
Understanding Key Financial Challenges
Healthcare providers face rising costs and shrinking margins. Key drivers include the cost of new medical technologies, expensive specialty drugs, labor shortages driving up salaries, and lower reimbursements from public and private insurers. Additionally, providers must navigate complex and frequently changing regulations that impact revenue and reimbursements. Together, these challenges make it difficult for healthcare executives to achieve financial goals.
Specialized Skills Needed
Effectively managing the myriad of financial issues in healthcare requires specific expertise. Skills needed include analytics to uncover savings opportunities, insight into reference pricing and rate-setting with insurers, and an understanding of regulations impacting finances. Providers often lack financial talent with this level of specialization. Additionally, healthcare leaders are physicians first, making it difficult for them to drive strong financial stewardship.
Advisory Services Bridge the Gap
Financial advisory services like FRG Systems offer the skills healthcare organizations need. Advisory teams provide financial analytics highlighting opportunities, conduct insurer contract negotiations, offer revenue cycle assessments pinpointing weaknesses, create financial models for growth planning, and deliver customized education strengthening financial leadership’s capabilities. With insight powered by years of specialization, advisors become invaluable partners in achieving financial health.
Tailoring Services to Organizational Goals
Healthcare organizations have diverse financial objectives based on their business model, services portfolio, and communities served. One hospital may need better supply chain management while another requires assistance integrating physician groups after a merger. Financial advisory teams tailor their services, analytics, and strategy recommendations to match each client’s organizational goals. This level of personalization drives maximum impact.
Ongoing Partnerships for Continued Success
The initial advisory engagement lays the foundation, but an ongoing partnership should be established for continued optimization. Advisors become integrated into the healthcare organization’s leadership team. This allows them to provide continuous assessments determining additional areas needing improvement, conduct regular financial modeling to account for internal and external changes, and offer new recommendations over time to drive savings and growth. With engaged, long-term advisory partnerships, financial health can be maintained over the years.
Proactive Planning for Future Goals
In addition to optimizing current finances, advisors help healthcare organizations proactively plan for the future. This includes creating dynamic multi-year models to forecast growth, planning for likely regulatory shifts, modeling the financial impact of potential mergers and acquisitions, and stress testing worst and best-case scenarios. With future-focused planning, healthcare providers can make informed strategic decisions allowing them to achieve short and long-term financial goals.
The Path Toward Financial Stability
By partnering with specialized financial advisors, healthcare organizations can overcome challenges that jeopardize stability. Advisory teams augment financial talent gaps with analytics, modeling, education, and direct negotiations. This allows healthcare leaders to reverse negative margins, optimize insurer contracts, prepare for changing regulations, and plan for future growth. With strengthened financial oversight, providers gain the insight needed to drive sustainability while continuing to meet community healthcare needs.
