‘Financial viability is the ability to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow growth while maintaining service levels.’ To survive and thrive in a highly competitive business environment, every organization wants to ensure a steady flow of cash to meet the expenses and to reinvest for infrastructure development. In its broader sense financial viability goes beyond than only meeting the costs instead it is creating a viable revenue cycle that can sustain a steady growth of an organization.’
Financial viability is turning out to be the primary concern for healthcare organizations CEOs and CFOs. Healthcare reforms and the demand for acquisition of new technologies have put the extra burden on the finances of healthcare organizations. Although the government has incentivized the purchase of healthcare technologies in many ways, in reality, it does not end with a simple purchasing of software. For instance, growing out from a paper-based healthcare provider to a software-based office requires not only the purchasing of practice management tools but also supporting hardware, skilled staff, security and backup cost, compliance requirements and up gradation of the systems over the time.
The concern over the finical viability of a healthcare organization is justified in many ways. A healthcare organization functions by capturing, managing and collection of revenues from the services provided to patients. The whole process starting from enrollment to payment involves multiple, but integrated steps and any problem with that revenue cycle can be critical for the organization.
Over the past few years, implementations of the healthcare reforms and newest requirements have immensely increased the operating cost. Either it is CMS’s new Value-Based Payment Modifier program or other state-run programs which are apparently meant to improve the system are putting extra load over the revenues of hospitals. Considering this a continuous phenomenon that does not seems to end soon, hospital CEOs have started to ponder over risk strategies. If a hospital fails to meet specific requirements or any unusual happening such as data breaches and subsequent penalties are a few of the risk factors that can trigger revenue collapse.
Hospitals are routinely taking measures to improve the performance of the systems. To improve the performance, hospitals regularly examine finances, performance, and collections to accommodate any unusual circumstances. Even a mere compliance for value-based payment model requires healthcare organizations to overhaul the processes from every angle.
To boost clinical outcomes and experiences of patients as well as to lower organizational expenses healthcare organizations keep on taking the initiatives that can improve the overall performance. However, in the current healthcare system, hospitals CEOs are required to manage it in various ways. To maintain a viable financial status, they have to keep in check the timeliness of reimbursements, controlling the increasing cost of supplies, managing the operational cost, keeping unpaid bills low and shifting the infrastructure to value-based care delivery. Moreover, hospitals require consistent funding for process improvement and commercial expenditures to be competitive in the market.
Multiple issues are bantering hospital CEOs in the current age of rapid transition, but maintenance of the financial status has become the chief concern. Healthcare organizations sustain in all type of circumstances even we have observed their sustainability during and after natural disasters. However, only one thing can disrupt their operations, and that is financial losses. Availability of the adequate financial resources is the backbone of any healthcare organization and should be sufficient enough in all circumstances.