FINANCIAL CHALLENGES FACING HEALTHCARE INDUSTRIES TODAY
“Finance functions lose the potential to steer their organizations to success when they defer performance management to other functions.”
The Healthcare industry is one of the most important institutions in today’s pseudo-post-pandemic world. Healthcare Industries have been at the forefront, leading the charge since the start of the COVID-19 pandemic. Being on the front lines, however, has put healthcare under unprecedented financial strain. Hospitals are now faced with increased costs from the shortage of doctors and nurses and the demand for high medical supplies and equipment costs. Economic issues are the most pressing concern confronting healthcare executives today. Healthcare Executives are constantly looking for solutions to continue providing coherent health systems and high-quality performance while spending less money to achieve financial stability for the organization.
HEALTHCARE’S FINANCIAL CHALLENGES
Hospitals and health systems are under constant pressure to cut costs while maintaining and improving a high-quality and robust organization. They are finding it increasingly difficult to thrive in today’s business environment due to financial constraints. The COVID-19 pandemic has definitely pushed hospitals and health systems into one of the most challenging markets today.
Some of the financial challenges faced by Hospitals and Health Systems today:
NON-EMERGENCY PROCEDURE AND OUTPATIENT CARE
The government has recommended canceling or postponing non-emergency procedures such as specialty care visits, most elective surgeries, and other non-essential medical services during this COVID-19 pandemic. Non-emergency issues are now focused in the outpatient arena. People are also forgoing necessary care, such as chronic disease management, due to the threat posed by the pandemic. These measures have produced steep reductions in revenue for hospitals and all healthcare systems. Facility-based care can generate more revenue than outpatient settings.
Recent data reported on healthcare organizations shows the sharp increase in the use of medical supplies and equipment, such as hospital beds, masks, ventilators, and PPW. The COVID-19 pandemic has also resulted in high demand for acquiring drugs. These essential supplies although significantly increasing the expense budget of health organizations are required and demanded due to the threat of the virus. As a result, hospitals have been paying two to five times the usual price for these essential supplies. Furthermore, costs for these essential supplies have spiked upward due to increased demand, which results in a higher equilibrium price.
In addition to these increases in costs, being on the front lines necessitates more effort and sacrifice. As a result, employee demands for higher pay to compensate for their labor, skill, and willingness to put themselves in danger for the sake of others leads to yet another increase in healthcare costs.
INCREASED UNCOMPENSATED CARE
This pandemic has resulted in a high rate of unemployment. As more people have lost their jobs and individuals and families alike are struggling financially the number of people without insurance has increased. Such measures will result in bad debt and uncompensated care for healthcare organizations.
MAINTAINING FINANCIAL HEALTH AND FLEXIBILITY
The different challenges as mentioned earlier, would result in a firm’s inability to adjust, and restructure its financing at a low cost. An increase in spending indicates a threat to any organization’s future, consequently healthcare executives are struggling to adapt to the changes and avoid financial distress during the economic downturn. To achieve positive financial health, they must recover the outstanding debt, reduce or rearrange expenses, or look for effective ways to maintain financial health.
FACING HEALTHCARE CHALLENGES WITH HWA ALLIANCE
Though vaccinations and other preventative measures have helped curb the spread of the virus, healthcare organizations and their financial challenges are far from over. They are still a long way from pre-pandemic levels. Healthcare industries are constantly striving to improve the safety and quality of care they can provide to their patients. However, without implementation of comprehensive financial management, healthcare’s objectives of security and quality care and financial stability would only fail, resulting in much more profound ramifications and risks to the organization.
Today’s healthcare industries are financially vulnerable, particularly in the absence of a strategic all-encompassing plan in their financial management. It’s in times like this when an organization, in high demand of solutions, needs to reach out to the “Specialists,” a type of “A-Team,” prepared and well able to offer sound, effective and cost-efficient financial management services. HWA Alliance of CPA Firms is the right solution for you. Our highly qualified professionals understand and can resolve the vital economic issues that your organization is currently facing. We conduct a thorough analysis of your organization’s current state to provide strategic insight into your company’s future. We believe quality financial management will result in a solid and well-organized financial foundation and efficient care to all your patients.
Our business is to understand your business and provide creative financial solutions to it. Today is your opportunity to build the tomorrow you want. For more information about our healthcare industry services, please visit us at https://www.thewrightcpa.com/healthcare-industry/.