Pandemic-era struggles fading from relevance, healthcare CFOs optimistic about the fiscal future
U.S. provider organizations squeaked by on slim operating margins for the whole of calendar year 2023.
On the other hand, December brought the 10th consecutive month with balance sheets in the black—and most healthcare CFOs believe the momentum will have some legs.
So shows new survey-based research suggesting a majority of financial leaders are heaving sighs of relief over COVID-19’s fadeout and feeling sanguine about the fiscal future.
The research was conducted by Strata Decision Technology, a Chicago-based supplier of financial software and services.
For the project, the company queried around 100 finance execs of hospitals, health systems, physician practices, integrated delivery networks and other provider orgs. The company also analyzed data from three large and discrete databases.
In findings released this week, Strata reports that 52% of the survey cohort rank their optimism at 4 or 5 on a 5-point scale.
Unsurprisingly, this same proportion of respondents is looking for revenues and operating margins to widen over the course of 2024.
By comparison, a cautiously optimistic 28% expect financial performance to remain flat, and only 14% are anticipating decreases in margins and/or revenues.
Very few, just 1% of the field, are not at all optimistic about their organization’s financial outlook for the current year.
Other key findings from Strata include:
- Addressing high costs is job one. Despite the optimism, 55% of healthcare finance leaders cited reining in costs as a top priority for 2024, Strata reports. Other top priorities include managing strategic and performance improvement initiatives (51%) and managing service line financial performances (45%).
- Healthcare orgs must leverage data. Some 92% of finance professionals stated that their organization needs to do more to leverage financial and operational data to inform strategic decisions, Strata says.
- Benchmarks matter. More than a third (36%) of healthcare finance leaders use benchmarks to measure financial and operational performance, Strata reports, adding that 28% use data to compare labor and productivity against peer organizations.
“For the first time since the pandemic, healthcare leaders have cause to be optimistic about their organizations’ futures,” comments Steve Wasson, chief data and intelligence officer with Strata Decision Technology, in a news release. More:
“While operating margins were narrow throughout 2023, gains in revenues and margins in the latter part of the year laid the foundation for further stabilization. To continue that momentum, organizations will need to commit to using data and other tools to help them manage performance and navigate market changes in the year ahead.”
Strata is offering the full report in exchange for contact info here.
Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.