Healthcare businesses must be proactive in tackling the economic situation

While inflation may be declining, economic conditions continue applying pressure on healthcare businesses in various ways. Healthcare leaders can tackle inflation by reducing expenses and strengthening efficiencies by focusing on labour costs, revenue cycle management and supply chain.

Since reaching record figures during the pandemic, inflation has continued to have a significant impact on the economy. Every industry has been affected in some way, including the healthcare industry.

Hospitals and healthcare systems, however, are in a delicate position of being particularly susceptible to rising pressures when margins are relatively thin. This scenario has forced senior executives and CFOs to adapt and ensure finances remain healthy. 

According to a recent survey by Deloitte, most healthcare CFOs consider the current economic situation a priority concern. C-Suite leaders must assess every financial decision regarding how it is affected by inflation. Ultimately, tackling inflation means exploring ways to minimise expenses and improve efficiencies. The C-suite must collaborate and prioritise specific areas, like labour costs, revenue cycle and the supply chain.

One of the biggest challenges for healthcare leaders since the onset of the pandemic has been the workforce and the associated decline in employees combined with the rise in labour costs. Investing in employees to strengthen retention and attract new people is how CEOs and CFOs can support the workforce. This means providing competitive salaries and enhancing employee wellbeing. 

Investment must also go beyond the workforce. Senior leaders must assess revenue cycle management processes and explore ways to implement technology to reduce administrative duties.

To tackle financial challenges in healthcare, businesses must explore processes to optimise operational efficiency and invest in innovative technology. For example, AI is pivotal in tackling financial challenges by streamlining workflows and strengthening revenue cycle management. Whether the priority is an end-to-end solution or an additional vendor to provide support, healthcare businesses can benefit from embracing automation. The key is determining the appropriate technology or vendor to invest in. 

Another area where inflation has caused issues is with the supply chain, creating disruption and product price rises. With a better understanding of how products are made and their input costs, the better their ability to manage potential cost increases. 

Businesses can reduce unnecessary costs by determining opportunities for streamlining products and supplies, enabling less dependence on multiple vendors. Technology can enhance inventory management and reduce possible waste. 

The pressures from inflation remain high, and the healthcare industry is still in a challenging situation where C-suite leaders must adopt the necessary processes to tackle further disruption.

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