How Healthcare Organizations Can Realign Their Finances Amid the COVID-19 Crisis

How Healthcare Organizations Can Realign Their Finances Amid the COVID-19 Crisis

The COVID-19 pandemic has been an incredibly trying time for the healthcare field. Hospitals are facing an unprecedented financial crisis driven by labor and supply chain issues as case numbers and breakthrough infections continue to surge. Kaufman Hall estimates that hospitals across America experienced about $54 billion in losses in 2021.

The US government estimates that more than half a million American healthcare workers were infected with COVID-19, with over 2,500 dying from the novel coronavirus. Subsequently, significant numbers of nurses and other healthcare workers took early retirement, sought more lucrative travel nurse opportunities, or transitioned to other careers as hospital management issues continued to compound. 

However, the shortage of skilled healthcare labor is also exacerbated by supply chain problems. Congested ports, disruptions in the trucking industry, and severe shortages of microchips and certain plastics and metals have had a deleterious impact on healthcare organizations’ supply chains with critical medical supplies running low or being unavailable.

As an accounting management partner to several healthcare organizations, Lavoie CPA has found that the following methods can help hospitals avoid crisis mode as they weather these difficult times.

Find Ways to Streamline Payments from Patients & Insurers

While revenue generation is crucial, a mistake commonly made by healthcare organizations of all types is placing too much emphasis on revenue fluctuations rather than cash flows.

The cash flow statement is one of the four financial reports that accounting departments and outsourced accounting firms provide to management. It analyzes how effectively an organization collects cash proximal to how much goes out for operating expenses, as well as major investments like equipment and real estate. 

Expenses can be incurred but not paid, and revenue can be generated but not yet collected. The cash flow statement clarifies how much cash is actually being received. More advanced cash flow analytics can provide a breakdown of how quickly cash is received in the average reporting period.

Healthcare organizations frequently face delays and staggering in cash collection due to inherently onerous billing practices, delayed processing of payments, and negotiations with both patients and payers like insurance companies. 

The pandemic created additional issues in individual insurance coverage, with both policy changes and the “great resignation” causing millions of Americans to experience last-minute changes in coverage, needing to go on Medicaid due to childcare or joblessness, increased denials from both private and government payers are compounding the cash flow problems experienced by healthcare organizations nationwide.

By closely analyzing cash flows on both lateral and micro levels, hospital administrators can determine where shortfalls lie in the current billing and payment systems and how they can be addressed. Training and skills updates for the billing department or new software can be the answer, if not a thorough examination of billing practices and departmental efficiency.

Assess Administrative Processes & Procedures to Address Inefficiencies

While the billing and accounting departments are often the first places a healthcare administrator will look when addressing cash flow issues, they aren’t the only departments that could have outdated infrastructure or staffing inefficiency.

52% of healthcare administrators state that COVID-19 caused their organizations to adopt new processes, including the creation of new positions or departments, that they expect to maintain after the pandemic concludes.

Poorly run departments, constrained human resources, and inefficient business processes contribute heavily to organizational financial waste. By thoroughly examining each department and division, unnecessary procedures, and duplicate positions can be eliminated or realigned to new posts that provide greater efficacy. Administrative processes that create waste may need to be simplified or modernized, or made compliant with healthcare and technological regulations if the organization is being repeatedly fined.

Renegotiate & Seek Agreements With Vendors to Save on Supply Costs

Supply chain squeezes are affecting the healthcare industry as a whole, with numerous hospitals across America completely lacking IV bags and other key medical supplies needed to care for patients. Worldwide microchip shortages have also increased the prices of computers and peripherals, which affects both medical devices and back-office operations.

While this puts healthcare organizations at a disadvantage in vendor negotiations, agreements can still be negotiated to get through this crisis if the organization has had a long and thriving relationship with the vendor. They may provide a temporary or provisional discount depending on what is needed. If they take advantage of the leverage they currently have, finding new vendors can provide immense cost savings.

For supplies that are less critical to have on hand, the purchasing department can take more time to contact multiple vendors to find the best deals.

Seek Opportunities to Increase Revenues

Cost-cutting is often the first method that managers turn to in times of crisis. However, medical supplies are seriously needed despite supply chain problems and cutting hours for healthcare workers leads to both higher turnover and poorer patient outcomes.

Some costs can be cut without harming the organization’s long-term viability if inefficiencies are addressed. But not all financial crises will be ameliorated by cutting costs alone. New revenue sources should also be considered.

By approaching the financial crisis in terms of increasing revenue, what are opportunities that best fit your healthcare organization, with the constraints of the pandemic in mind? Start with allocating more resources to following up on denied claims. After billing department issues have been addressed, insurers may have denied claims in error or proper appeals for medical necessity can be made.

Even as more employers shift to hybrid or fully remote operations, medical benefits can go beyond medical and dental coverage. Hospitals and primary care practices can bring wellness programs directly to workplaces, creating a new revenue stream for the organization while the employer provides a benefit that attracts and retains quality talent. 

Nonprofit hospitals and clinics have the ability to appeal for individual, corporate, and estate donations. With fundraiser balls and other live events being less viable during the pandemic, hosting livestreams and working with influencers and other digital forms of fundraising and community outreach can provide additional income.

Finding new ways to generate revenue can endure after the pandemic has passed and serve as a springboard for thriving and growing as an organization.

Healthcare Financial Assistance from Lavoie CPA

Lavoie CPA focuses on financial technology and business process solution assessments. As an outsourced accounting partner, Lavoie CPA can deliver value where internal accounting departments often fall short. We offer interim and project-based services for your cloud-based accounting needs and aim to address the big picture rather than just one process. 

Contact us today to set up a healthcare organization financial assessment with Lavoie CPA.

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA & Jirav Launch Strategic Partnership

Lavoie CPA has added Jirav, an all-in-one business planning software for small and medium companies, to its lineup of preferred cloud solutions for the accounting profession.

At Lavoie CPA, we leverage accounting as a service and cloud-based technology to streamline clients’ accounting, payroll, and analytical processes. Implementing software solutions is critical for improving financial reporting and making businesses scalable over the long term. We work closely with clients to identify the right software solution that supports strategic objectives while making operations more efficient and effective.

Through this partnership, Lavoie CPA and Jirav aim to give clients a competitive edge in their accounting and administrative processes.

Jirav is an all-in-one financial planning and analysis solution that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed.

Jirav integrates natively with leading accounting or ERP platforms such as Xero, Quickbooks, NetSuite, and Sage Intacct. With Jirav, you are up and running your forecasts using templates in minutes.

This powerful business planning software helps companies:

  • Maximize Growth: Model the outcomes of investing in sales, marketing, or other areas. Scenario test to optimize your growth strategy and track results to plan.
  • Operate With Financial Excellence: A key to growth is having a plan and measuring against it. Manage detailed KPIs and collaborate with owners to keep the business on track.
  • Focus on Strategy: Finance teams at growth companies lose too much time to spreadsheets and generating reports. Automate the tasks and focus on being strategic.

Contact slavoie@lavoiepllc.com to request a demo today. To learn more about the platform, please visit https://www.jirav.com/.

About Lavoie CPA

Founded in 2009, Lavoie has served as a reliable Charlotte CPA firm that specializes in strategic financial and operational planning for businesses of all sizes. By delivering state-of-the-art strategic support, Lavoie’s clients can focus on growing their business and soar to the next level of greatness. In addition to providing customized solutions for clients, Lavoie prioritizes social justice issues and is extremely involved in the local Charlotte community.

About Jirav

Jirav is a comprehensive business planning solution for small and medium companies that maximizes the collaborative value of forecasting, budgeting, reporting, and analytics so leaders can drive their businesses forward with confidence and speed. The all-in-one financial planning and analysis software offers faster implementation and a more intuitive interface, allowing finance leaders to build financial models in hours (not days) and generate financial reports in minutes (not hours). Jirav is headquartered in San Francisco with offices and teams across the world including Seattle, Austin, and Poland. Learn more at www.jirav.com.

The Top 5 Reasons Why Hospitals Need Outsourced Accounting

The Top 5 Reasons Why Hospitals Need Outsourced Accounting

As the CFO of a hospital or healthcare organization, you understand the substantial financial burden facing the healthcare industry. From cumbersome pre-authorization processes to ever-changing government regulations, inefficiencies account for up to $200 billion in annual spending. 

While many hospitals face an uphill battle, others have discovered that outsourced accounting can improve profitability, scale operations for long-term success, and elevate the patient experience. 

This article will discuss how outsourced accounting lowers overall expenses, averts HR challenges, drastically reduces inefficiencies, and helps hospitals maintain superior service levels. While there are many reasons to outsource accounting and use cloud-based technology, the ones outlined in this article will revolutionize healthcare for generations to come. 

#1: Uncover Gaps and Develop a Plan of Action

It’s impossible to transform your organization without knowing the root cause of the problem. Hospitals are complex systems and departments are often siloed, leading to breakdowns in communication and further exacerbating inefficiencies. Establishing a baseline of current issues facing the organization requires hospital leaders to address inefficiencies across the board.

With outsourced accounting, your organization gains access to a suite of financial services, including automation and cloud-based technology. The right software allows you to quickly identify organizational challenges and prioritize initiatives according to the impact on your bottom line.  

You can harness the power of accounting technology to help you:

  • Identify and fix the most costly inefficiencies
  • Drastically lower human error 
  • Reduce overhead and recruiting costs
  • Automate medical billings and streamline insurance reimbursements 
  • Increase accuracy of cash flow projections
  • Easily navigate and adapt to changing government regulations 
  • Achieve operational and strategic objectives faster

With a full-service, high-quality outsourced accounting firm, you can identify the issues impacting your bottom line, develop a plan of action to assess them according to priority, and make significant gains in profitability and patient experience. 

#2: Minimize the Burden of Industry and Government Regulations

One of the most expensive inefficiencies hospitals deal with is ever-changing government regulations. Navigating coding changes, maintaining hospital chargemaster processes, and complying with state and federal regulations requires constant oversight. Furthermore, human error and administrative waste threaten to crush your organization’s bottom line. 

Hospitals that partner with a high-quality outsourced accounting service free up internal resources, minimize human error, decrease misstatements, and lessen the likelihood of governmental audits. With an outsourced account receivable team, you’ll be able to focus on your core competencies, reduce the inherent risk in regulatory compliance, increase profitability and scale your organization to new heights.  

#3: Improve Financial Outcomes 

As the CFO of a hospital or healthcare organization, you are responsible for much more than finance. If you’re like many CFOs we work with, you must cut costs, elevate the patient experience, enhance staffing efficiencies, and optimize revenue. One of the best ways to improve your financial outcome and gain a competitive advantage is to rely on a high-quality, full-service outsourced accounting partner.

With an outsourced accounting partner, your organization leverages a team of dedicated professionals and cutting-edge technology solutions focused on accounting, human resources, and administration. This allows your hospital to recover revenue quickly, reduce account receivable days, and empower your staff to work smarter and more productively. 

Outsourced accounting frees up your resources and allows you to focus on creating a truly customer-centric organization. For most CFOs, this translates to an enhanced patient experience, soaring patient engagement rates, and the ability to deliver world-class service to the community at large. 

#4: Enhance Scalability at Your Organization

Hospital executives and CFOs are opting to leverage cloud-based software solutions that automate administrative tasks. With outsourced accounting, AI and other technological advances offer a way to reduce administrative waste and ascend to the next level. 

As your outsourced accounting provider, we rely on leading software partners and comprehensive solutions to help your organization manage staffing processes, track time and labor hours, and optimize your workforce.

When you turnover high-touch tasks to a fully automated platform, your organization gains substantial efficiencies, catapulting cost savings, and increasing your ability to scale. 

In addition to scaling, other benefits include: 

  • Ability to categorize revenue correctly
  • Increased visibility into employee performance
  • Improvements in employee satisfaction
  • Massive reduction in paperwork and administration waste
  • Enhances data security
  • Recover underpayments easily 
  • Lowers denial rates
  • Offers clinicians more time to build relationships with patients
  • Enhances the patient experience and the patient financial experience (PFE)

With outsourced accounting, CFOs and controllers can rightsize operations, enhance decision-making processes and scale to the next level. 

#5: Maintain Your Competitive Advantage 

The revenue cycle process at your hospital or healthcare organization is the cornerstone of the organization’s financial stability. Unfortunately, there are many opportunities for revenue cycle waste within the hospital management system. 

These inefficiencies lead to an ever-mounting ceiling of bad debt, continually rising costs, sky-high denial rates, and other financial crises.

When you’re focused on battling inefficiencies and putting out financial fires, you lack the time and resources needed to drive your organization forward in a competitive market. Outsourced accounting allows you to regain control and steer your organization towards a financially sound future. 

While it takes time to implement new software solutions and bring an outsourced accounting services team on board, the gains greatly outweigh the challenges. Hospitals that embrace technological advances enjoy lower operational costs, improved cash flow, and increased productivity. As a result, outsourced accounting is quickly becoming the competitive advantage the healthcare industry relies on to improve profitability, scale operations, and elevate the patient experience. 

See how Lavoie CPA can support your hospital or healthcare organization’s needs. 

Contact us at 704-644-0235.

3 Key Tech Benefits in Healthcare

3 Key Tech Benefits in Healthcare

Technology is disrupting markets in significant ways by reducing costs, making systems and processes more efficient and empowering customers. The healthcare industry, which had $3.2 trillion in expenditures in 2015 (nearly 18% of total GDP) in the U.S., is expected to be able to reduce costs by $300 billion by simply implementing new technology. Before going into the key tech benefits in healthcare, we will briefly discuss the different technology solutions that are already making an impact.

Related: How do CFOs Keep Up with Technology Changes?

Artificial Intelligence

Commercialization of big data and machine learning has introduced AI to the healthcare industry and it’s believed to change the way diagnoses and treatment of patients are carried out. A study by Frost and Sullivan in 2016 projected that the AI market in healthcare will grow by 40% and reach $6.6 billion in 2021. Additionally, Frost and Sullivan also projects that AI can improve outcomes by 30-40% and reduce treatment costs by 50%. Ultimately, AI is expected to allow the health industry to automatically diagnose and recommend treatments to patients. The fact that implementing AI will reduce costs makes it even more enticing.

Mobility

By 2018 it is estimated that 65% of all interactions with healthcare facilities will be via mobile devices. In November 2016, StatCounter also reported that, for the first time, there are more users around the world that are accessing the Internet from mobile devices than from desktop computers. Needless to say, the increase in mobile usage among customers is something that the healthcare industry is taking advantage of. Mobile usage has also enabled the new concept Telemedicine, where patients can get in touch with their physicians from remote locations by simply joining a conference call.

Cloud Access

Cloud technology has changed healthcare facilities in multiple areas by for example allowing employees get real-time guidance through information systems. More importantly, cloud access has allowed healthcare facilities to safely store data and for a reduced cost. Hospitals, in particular, have to store massive amounts of data on patients on a daily basis that they ultimately use to make strategic and informed decisions about treatments.

Related: A Beginner’s Guide to Cloud Computing

Main Tech Benefits in Healthcare

Technology will continue to disrupt the healthcare industry going forward, and there is a reason for it. Digital approaches offer enticing benefits for both healthcare facilities and patients.

1. Reduced Cost

Technology will reduce costs, both for businesses and customers. Businesses want to maximize profits, customers want to pay less money. All in all, it works out for everyone.

2. Better Care

Technology approaches such as cloud software allows physicians to make better informed decisions in tough times, which ultimately can improve treatments of patients and outcomes. Healthcare facilities want to treat patients so they can live longer lives and patients want to receive the best care possible. Technology makes this possible.

3. Empowered Patients

Finally, technology also empowers the patients, who no longer have to schedule their days around a doctor’s visit. Technology has essentially allowed healthcare facilities to become more patient-centric.

Conclusively, technology in healthcare offer many innovative approaches to grow and save money at the same time. What are your thoughts on technology as it relates to healthcare? Do you agree on the benefits listed above or do you see other potential benefits with technology in healthcare? We would love to hear your thoughts in the comments section.

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