Healthcare News & Insights

Top financial challenges in health care

Every day, it becomes more challenging for hospitals to survive in the current healthcare climate, particularly regarding financial matters. It’s tough to find the money to fund care quality initiatives and other improvements while staying afloat. 

money-pileWith that in mind, Siemens Financial Services surveyed healthcare finance managers around the globe to find out about their top challenges in the current financial landscape. It chronicled the results in a new report.

The biggest economic challenges healthcare providers face right now are fairly universal despite each facility’s location and size.

According to the report, the top four are:

  1. Managing investment in a capital-constrained environment. Between frequently changing laws, expansion of healthcare access and growing patient demands, hospitals need access to more financial resources to keep up. Plus, the pressure to cut costs while boosting outcomes puts restrictions on how much money hospitals can spend to improve patients’ health.
  2. Accessing digital innovation and technological transformation. New medical technology is being developed at a rapid pace, but hospitals can’t always take advantage of its benefits, whether it’s due to cost constraints or an outdated IT structure. But because there’s increased pressure to use technology for improved patient outcomes, more facilities are exploring how they can come up with the money to implement new medical devices, interoperable electronic health records systems and other innovations.
  3. Adapting to market forces. Mergers are a significant part of the healthcare landscape. Large payors are consolidating into even larger companies, and hospitals are joining forces under the same corporate umbrella. There’s increasing pressure from government officials to make sure these arrangements are aboveboard. Patients are also letting their voices be heard as consumers. Those pressures, combined with the difficulty in recruiting and retaining top clinical talent, have created increased financial pressure for facilities.
  4. Meeting regulation and compliance requirements. Hospitals and healthcare providers have to make sure they’re compliant with a number of rules and regulations governing everything from patient privacy to outcomes from procedures. Cutting corners here could land facilities in hot water, so it’s key to have the funds available to invest in meeting compliance guidelines.

Reacting to challenges

Healthcare providers are responding to these challenges in a number of ways, such as:

  • finding alternative sources of funding for capital improvements
  • looking into different methods of paying for services (e.g., leasing or renting equipment)
  • bundling services to save on total costs of ownership (e.g., using unified systems from the same vendor that include maintenance, software and service costs), and
  • sharing resources with other hospitals and healthcare providers.

However a hospital chooses to create a financial strategy, it’s critical to consider a variety of elements so there’ll be several options for the facility to cover its financial responsibilities from value-based payments, market pressure and technological improvements.

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