Healthcare CFOs are at a critical juncture. Data indicates healthcare CFOs spend nearly a quarter of their time on revenue cycle management (RCM), which they could outsource. This leaves little room for innovation or strategic transformation. This misallocation of time threatens healthcare organizations’ ability to adapt and thrive in an increasingly complex environment. The top three time-consuming tasks for healthcare CFOs are:
- Revenue cycle management (24%): RCM, while essential, is a function that specialized external partners can manage effectively. Yet, it consumes the largest share of CFOs’ time, limiting their ability to focus on higher-value activities such as strategic planning and innovation. Example: Ascension Health outsourced its RCM processes to R1 RCM Inc. to enhance efficiency and reduce administrative overheads. This decision enabled Ascension’s CFO to concentrate on strategic growth initiatives such as expanding telehealth services and investing in community health programs.
- Operations (18%): Operational responsibilities are necessary, but often tactical, focusing on day-to-day activities rather than long-term strategic growth. CFOs must delegate or streamline these tasks to reclaim time for strategic initiatives. Example: Cleveland Clinic streamlined its operational management by implementing robotic process automation (RPA) to handle routine tasks such as patient scheduling and billing inquiries. This shift enabled the CFO to focus on strategic decisions such as capital investments in new facilities and technology upgrades.
- Cost Management (17%): Finance leaders have historically focused on reducing costs, but traditional methods are becoming less effective. The current approach prioritizes short-term financial stability over long-term value creation. Shifting the focus to strategic cost management can lead to more sustainable financial health. Example: The recent acquisition of Geisinger Health by Kaiser Permanente’s Risant Health exemplifies a significant shift in the healthcare industry. In partnership with Geisinger, a leading provider of value-based care, Risant Health is committed to developing a new value-based care platform.
The Bottom Line: Healthcare CFOs must shift their focus from tactical to strategic activities to secure long-term success.
The key is to reallocate time away from routine tasks and invest in areas that drive growth, innovation, and resilience. Here’s how CFOs can start reclaiming their strategic focus:
- Outsource routine functions such as RCM
- Embrace technology to streamline operations
- Adopt strategic cost management
