During the course of the pandemic, healthcare organizations have had to face the worst of the pandemic and adapt to constant shifts and disruptions. Business practices in the healthcare field are evolving and successfully executing digital transformation can help health organizations manage their uncertain and evolving future. Regulations will change, competition will intensify and plagues like COVID-19 could very well happen again, no matter how inconceivable it may seem. New digital tools like cloud-based FP&A software are optimized for the planning and forecasting abilities that healthcare organizations need to optimize their resources in a volatile present and future. Such organizations can substantially improve their work processes, data timeliness and management, and cross organizational collaboration with such powerful technologies.
How to Reap 4 Benefits of Digital Transformation in Healthcare
1. Improved Work Processes
Hospitals and other healthcare providers are transitioning from a volume-based model of care to a value-based one, in which providers are reimbursed at higher rates for accurate diagnoses and positive patient outcomes. This change demands significantly more attention to detail, efficiency, and cost metrics, the latter being an area in which healthcare FP&A teams are uniquely positioned to addressed. To add the most value during this seismic industry shift, however, finance teams must themselves evolve along a similar path. Their planning processes need to shift from a static, annual endeavor to one built on rolling forecasts and performance-driven planning so that they are constantly in possession of updated, correct metrics.
Among the success stories in such impactful digital transitions was that of the Mayo Clinic, a medical center with campuses in five US states. It serves over 1 million people a year, on top of their research and education programs. In September 2019, Mayo Clinic and Google announced a 10-year partnership. “Data-driven medical innovation is growing exponentially, and our partnership with Google will help us lead the digital transformation in health care,” said Dr. Gianrico Farrugia, president and CEO at Mayo Clinic.
The agreement implies several projects in itself. The hospital system built its data platform on Google Cloud to store its medical, genetic, and financial data. Google Cloud provides services like computing, data analytics, AI, etc.. The institution stresses it alone will enable access to patient data, and Google will be forbidden to combine Mayo data with any other dataset.
According to the agreement, Mayo Clinic physician leadership also planned to cultivate ML models for complex diseases jointly with Google specialists. The tech giant will open an office near the Rochester campus to let its engineers work side by side with the healthcare provider’s physicians, researchers, IT specialists, and data scientists. If you want to know how AI and machine learning can aid disease detection and screening, the following article elaborates on deep learning in medical diagnosis.
On a broader level, the pressures currently weighing on the healthcare field make efficient and frequent planning all the more critical. If a company’s strategy changes significantly—as is the case at many healthcare organizations—the traditional budgeting process “falls apart,” Paul Cichocki, leader of Bain’s Americas Performance Improvement practice, pointed out in CFO magazine. “The ‘start with last year’s budget and adjust it’ mentality doesn’t apply in situations where the industry context has changed or a company’s own competitive position has changed,” he said.
More nimble reporting—the kind that extends beyond finance figures to look at operational and efficiency metrics—allows healthcare companies to change how resources are allocated in response to changing market dynamics. Scenario planning, meanwhile, can anticipate looming regulatory changes that may make or break a company.
2. Superior Data Management
The significance of Data Management is only going to increase in the world of business, so it is imperative that organizations get a firm grip on it as soon as possible. Data maximizes the results of your decision making by backing it up with material facts, it removes the uncertainty of human decision-making and gives the individual viewing the data a direct line to the objective health of the organization.
Cloud-based FP&A solutions manage and organize data for business purposes. You can yield impactful results by leveraging raw financial data from HIPAA-compliant healthcare cloud accounting systems and then transforming it into actionable insights so stakeholders can take action. It is a critical component of an economy-wide reimagination of data-based decision making that will profoundly affect the healthcare sector.
To illustrate the criticality of digital transformations in an anecdotal example of improved data management, one need look no further than Halifax Health over the past few years. They made groundbreaking improvements in their efficiency and data security. Outdated technology seriously hindered their work pace as one of the leading healthcare providers in the state of Florida (not to mention their 120,000 annual number of emergency room patients). After migrating 95% of their physical servers to a cloud, they were able to support a large user base with fewer resources. Additionally, tasks like server patching went from taking over 40 hours to complete, to no more than 14 hours.
Quality data is the foundation of the healthcare system of the future. However, improving the quality of existing, subpar data is not a quick process. Healthcare companies still using manual planning processes often grapple with errors and outdated budget figures. Transitioning to a cloud-based system first helps to reduce mistakes and establish a single source of financial truth that establishes clarity throughout company leadership.
Once the financial data has been centralized and standardized, healthcare FP&A leaders can work to integrate other data, including operational statistics and billing figures, into their overall plans. The last step is to put that robust, high-quality data and timely information into the hands of your stakeholders in a way they can use. Cloud-based tools with simple, visually attractive dashboards improve productivity and make planning easier and more relevant. And by this point, you’re well on your way to a high-functioning, value-based healthcare organization that’s able to thrive in today’s uncertain environment.
3. Automatic Real-Time Updates
Cloud-based FP&A systems integrate with your organization’s finance function and can update data in real time. Budgeting and forecasting processes should become more dynamic and resilient to reflect the uncertainty of the health market. Instead of budgeting once a year and leaving it untouched, changes should occur continuously, and companies should use the latest data to take the appropriate action. New regulations, new competition and new health shocks need to be accounted for in a company’s planning and this can be done with scenario planning features built into these solutions.
Real-time updates create more realistic projections of organizational health and can help build resilience that effectively address potential crises. Automation features help identify and deal with errors, making their impacts less prevalent compared to using traditional spreadsheets and the limited financial planning they allow. Cloud FP&A platforms provide finance leaders with up-to-date information when up against a challenge, helping them respond in a more informed and confident manner.
4. Improved Simplicity & Collaboration
Among the biggest issues facing healthcare organizations is the management and unification of their data. Cloud-based FP&A helps to manage this issue by enabling collaboration between team members, cutting operational costs, and improving the efficiency and impacts of decision-making.