healthcare finance professionals say they are under pressure to control costs and maximize revenue for their organization. ⅓ are under a great deal of pressure to do so. But they could be underestimating one of the levers to pull to get there.
Under pressure to boost revenue, contain costs, what are healthcare finance leaders prioritizing?
85% of the 300+ healthcare CFOs and senior financial leaders Flywire recently surveyed agree they need to do more to improve their collection/payment experience, and that they’re losing time and money because of it. Better technology would allow them to shorten the revenue cycle, 83% of those surveyed said.
But the majority of those surveyed said that while both are important, their primary focus is on reducing costs (63%), not increasing collections (37%).
Both are linked, and core to improving and protecting the financial health of the hospital and health system. Increasing collections also helps to reduce costs – by millions of dollars – a separate Total Economic Impact analysis showed. For instance, using Flywire’s patient financial engagement platform, healthcare organizations increased revenue by 29% and reduced bad debt as a percentage of net revenue from 5.5% to 4%. Other Flywire clients have reported to reduce their cost per patient payment by 43%.
Patients satisfied with the financial aspect of their care were twice as likely to pay their bill, twice as likely to return for services, and five times as likely to refer us to a friend.
Vice President of Revenue Cycle interviewed for Flywire’s Total Economic Impact report.
The healthcare finance leader’s responsibility to drive top-line growth came through loud and clear in our survey. 87% said the need to ensure top-line growth for their organization is one of the parts of the role that has changed the most over the last few years, coming in only slightly behind their expanding role in bringing in new technologies.
There are many competing priorities: improving the patient experience, having to pay more for staffing, rising self-pay costs, staffing shortages and industry consolidation were all named by more than 80% of respondents as impacting the financial stability of their organizations.
It is little wonder that 88% said it’s more complex being a healthcare finance leader than it was five years ago.
But the upside is that increasing responsibility comes with a seat at the table.
Healthcare finance leaders say they are playing a much bigger role in determining strategy for their organizations (93% say their role has become more strategic over the last few years). And it’s with purpose: 90% said one of the best parts of the role is the feeling that what they do actually helps people. Finance professionals are well positioned to be critical leaders during this challenging time for the healthcare industry. And one way to do that is through payments innovation. Leaders clearly see the value in providing patients new ways to pay, increase self-pay and decrease the cost to collect. Survey respondents are interested in bringing in new patient financing tools and AI-driven technologies to that end. As one respondent put it:
In the next 5 years, financial leaders in hospitals and health systems will play a pivotal role in navigating evolving healthcare landscapes. They'll focus on optimizing revenue cycles, managing costs, and leveraging data analytics for informed decision-making. Additionally, they'll drive innovation in financial models to ensure sustainable healthcare delivery while adapting to regulatory changes and technological advancements.”
At a glance: 5 key findings
Finance is more aligned with IT than ever before. 88% of those surveyed said they work well with senior IT people in their organization (that jumps to 93% for CFOs). Leaders name the CIO/Head of IT as the person they work most closely with – ahead of the CEO, Chief Medical Officer/Chief Nursing Officer and the Chief Marketing Officer. Nearly half say they’re working more closely with innovative technologies – and helping to find strategic partnerships for their organization.
There’s high concern over managing patient out-of-pocket costs while balancing affordability concerns. 86% say so – while 9 in 10 say that out-of-pocket costs have an impact in keeping healthcare affordable for patients. The patient financial experience is a big part of the patient experience – and that impacts loyalty. 89% of those surveyed said patient experience impacts loyalty – with more than ⅓ saying it impacts it a great deal.
There’s a strong appetite for innovative solutions. 45% are putting the pieces in place to offer patient financing – and 22% are thinking about offering it. Investments in technology have had a major impact on the financial stability of the organization. Predictive technology, AI and machine learning are high on the radars of 94% of those surveyed – and 79% say AI and machine learning will be more important for the financial success of their organizations than automation. Only 21% picked technologies that will automate as their priority, signaling that technology that helps to automate processes is becoming more table stakes.
CFOs are increasingly chief risk officers. When asked what their role would be in five years, the open-ended question yielded some of the survey’s most interesting data. Many point to their increasing role as “Chief Financial Risk Manager” and their duties to mitigate financial-related risk, including revenue cycle uncertainty, pressure from cost growth, changes in health insurance payments and changes in laws and regulations.
Leaders want more tools to optimize the revenue cycle, including access to financing. 84% of those surveyed said their organization has lost money due to time spent dealing with A/R. If they had better technology, they could shorten the revenue cycle (83%) and increase collections (82%). Finance leaders are actively exploring new ways to fund bills, such as offering financing assistance to patients in order to help pay their medical bills. While only 25% are actively offering it, many are putting the pieces in place to offer it (45%) or thinking about it (22%).
One thing unique to healthcare compared to other industries Flywire has surveyed is that feedback across different sizes and types of hospitals was pretty consistent. Across these issues, healthcare financial leaders are mostly of one voice.
Deeper look at the data
What is different about the role of the healthcare finance leader today?
Healthcare finance leaders are working more closely with new/innovative technologies. 94% say predictive technologies and AI/machine learning will be important over the next few years, with more than half saying it’ll be very important. AI and machine learning now trump automation as a priority - perhaps because the latter is becoming more table stakes. 79% say AI/machine learning will be more important for the financial success of the organization vs. 21% saying automation.
Other expanding duties include:
- Helping to find strategic partnerships
- Educating more people internally about maximizing revenue streams
- Become more involved in non-financial matters
- Outsourcing more non-clinical processes
- Helping to find new lines of business
What is challenging about being a healthcare finance leader today?
There are external pressures. Consolidation in the industry makes the job more difficult (82%) and leaders need to be more adaptable than before (87%).
There are many different factors impacting the financial stability of healthcare systems and hospitals, these include:
Rising self-pay costs are impacting affordability
What are some of the key healthcare finance priorities?
1. Improving the patient experience
The majority of those surveyed said that one of the best parts of their job is the feeling that what they do actually helps people.
- 93% say the patient experience important to them
- 89% say patient experience impacts patient loyalty
- 92% say the patient experience impacts decisions
- 85% say improving it has impacted financial stability
2. Offering patient financing options
While only 25% are actively offering it, many are putting the pieces in place to offer longer-term options for funding patient payments (45%) or thinking about it (22%).
What are the important requirements?
- 90% having a partner that will manage both in-house and financed plans
- 86% interest-free financing and loans
- 86% embedding functionality in the patient payment portal
- 83% all patients qualify
- 83% terms that extend beyond 48 months
- 83% non-recourse financing model
3. Streamlining the A/R process
Healthcare financial leaders know that there’s much room for improvement and opportunity in streamlining the A/R process.
- 84% say their organization has lost money due to time spent dealing with A/R
- 83% say better technology would help me to shorten the revenue cycle
- 82% say if their organization had a better way of dealing with A/R they could increase our collections
With the Flywire technology, we were able to use more analytics to drive the best patient experience in terms of what patients may afford and the options they have to satisfy their balances
Greg Arnold, Senior VP, System Revenue Cycle, Northshore-Edward Elmhurst Health
7 ways Flywire can help with healthcare finance leaders biggest challenges (checklist)
83% say better technology would help shorten the revenue cycle. Here’s how Flywire can help.
- Personalize payment plans and options to patient financial capacity.
- Reduce time spent dealing with accounts receivable.
- Increase self-pay collection.
- Extend collection terms beyond 12 months with integrated financing.
- Provide a single platform for in-house and outsourced payment plans.
- Integrate with an EHR strategy.
- Ensure compliance with regulatory and industry standards, such as HIPAA and PCI DSS v 4.0, and better mitigate risk.
Learn more about Flywire for patient payments.
Are you ready to transform the patient payment experience?
Flywire commissioned Regina Corso Consulting to conduct a survey of senior healthcare financial professionals who work in health systems and/or hospitals to understand the pain points they have and how they deal with issues today.
This survey is among 304 US adults who are at least a Vice President and work in a senior financial decision-maker role in a hospital and/or health system. It was conducted online between August 24 and 30, 2023.
Notes for reading charts and tables – percentages may not add up to 100% due to rounding or because the question was a multiple response allowed item, unless otherwise indicated.