Three Ways (and More) to Strengthen Your Healthcare Organization's Financial Viability Now

Running a successful healthcare organization that prioritizes the patient first in today’s climate is challenging. Some would say it’s almost impossible. Escalating costs, staffing shortages, and a rapidly changing healthcare landscape can make it extremely difficult to attain and maintain financial stability while delivering top-notch care. 

Yet, no matter where your healthcare organization stands regarding fiscal health, multiple strategies and initiatives exist that will improve its financial strength regardless of your starting point. If you are an executive leader within healthcare, you probably want to know which ones give you the most valuable returns fastest.

At Smith Mountain Advisors, our playbook prioritizes practical techniques that create significant value while minimizing disruption. With this in mind, we break down three concepts you should consider implementing now to improve your bottom line so your organization can better focus on your primary mission: delivering world-class health care that truly puts the patient first. 

Let’s dive in.

1. Initiate a Departmental Efficiency Analysis to Streamline Operations

Sometimes, the solution to your financial struggles lies not in changing your whole system but in improving your internal processes. Performing a departmental analysis can reveal inefficiencies that, once addressed, can save significant time and money. If you have a good idea of where your biggest challenges are, those are great places to start. 

Ideally, every department within your organization should operate efficiently to reduce costs, which ultimately helps the bottom line. However, the reality is that many healthcare organizations struggle with bottlenecks that drive up costs and reduce productivity. Maybe the clinical departments take too long to process patients. Perhaps the administrative side gets bogged down with manual paperwork that slows billing cycles.

A thorough review of each department's workflow can expose unnecessary steps, outdated procedures, and not-so-glaring redundancies. Identifying these speed bumps in efficiency will lead to more streamlined processes, faster patient throughput, and better financial performance. Often, your staff will follow outdated processes because “that’s how they’ve always been done.” But nine times out of ten, there’s usually a better way, and some existing staff members have valuable ideas on improving those inefficient processes. You must simply ask the right questions to tap into that hidden vein of precious productivity.

2. Enhance Interoperability to Maximize the Power of Your Systems

In healthcare, efficiency and accurate data sharing are critical. Enhancing interoperability can directly and significantly improve both patient outcomes and your financial health. 

Most healthcare organizations already have robust software systems, but are you really using their full potential? Whether you’re running Epic, Cerner, or another healthcare system, there are often underutilized features that can significantly improve the speed and accuracy of information sharing. Properly integrating and optimizing lab results, medical histories, imaging, and billing processes allows for smoother operations and a better patient experience.

Start by conducting an internal audit of your existing technology. Does your billing software seamlessly and optimally connect with your patient care system? Are you leveraging automation to reduce manual data entry and errors? Consider having an internal systems expert review your workflows, system build and staff education to ensure you get the most out of what you're already paying for.

3. Ensure Accuracy in Billing and Payment Processing

One of the most frustrating financial challenges for healthcare organizations is revenue leakage due to inaccurate billing and missed charges. How do you know charges for services rendered are documented correctly or even billed at all? This can happen for many reasons, from human error in data entry to miscommunication between departments. And it happens more often than you think.

Imagine a scenario where a patient undergoes a complex procedure, but a portion of the services wasn’t captured in the billing system. Not only does this impact your revenue, but it also complicates patient communication if surprise bills appear later.

Your billing and payment processes should be as airtight as possible. Conduct regular audits of your billing systems to identify and correct any inefficiencies. Make sure all departments are communicating effectively and there’s a clear process for capturing all charges the moment they’re incurred. 

Revenue leakage can be a severe drag on any healthcare organization's financial health. Many entities are shocked by how much legitimate revenue they have not billed once the proper audit has uncovered it.

Going Above and Beyond (Bonus List)

Want more ideas to improve your financial health? Because Smith Mountain Advisors thrives on helping clients succeed, we’ve included additional improvement ideas to consider

4. Address Staffing Shortages with Creative Solutions by Rethinking Workforce Management

Staffing shortages continue to plague the healthcare industry, making it increasingly challenging to deliver quality care. Whether it's nurses, imaging techs, or administrative staff, a lack of skilled personnel can lead to delays, overworked employees, and a strain on patient care. 

Finding creative solutions to staffing challenges is critical. Consider flexible staffing models, such as part-time or contract workers to fill gaps during peak times. Investing in staff retention programs can also help you keep the valuable employees you already have. Offering training and development opportunities, creating a positive work environment, and providing financial incentives can go far toward reducing turnover.

Another solution to staffing challenges is leveraging technology, such as telemedicine or remote care options. This not only helps reduce the demand for on-site staff but also expands the range of services you can offer your patients.

5. Manage Escalating Healthcare Costs by Embracing Adaptation

Healthcare costs are rising with no easy way to reverse that trend. However, understanding and adapting to these rising costs is essential for financial sustainability. Whether it's the skyrocketing prices of pharmaceuticals, increased labor costs, or more expensive equipment and technology, healthcare organizations need to stay ahead of these trends.

One effective way to manage escalating costs is through careful vendor management and negotiation. Evaluate your contracts with pharmaceutical companies, suppliers, and even insurance providers to see if there’s room for renegotiation or more cost-effective alternatives. In some cases, joining a group purchasing organization (GPO) may help you achieve lower prices on the goods and services you regularly use.

Another key strategy is implementing cost-saving measures in day-to-day operations. Energy-efficient upgrades, waste reduction initiatives, and better supply chain management can result in significant savings over time.

6. Bring Healthcare into the 21st Century: Leverage AI and Advanced Technology

Artificial intelligence (AI) is no longer a futuristic concept. It's here, and it’s revolutionizing many industries. AI has the potential to transform everything from diagnostics to administrative workflows, improving both the quality of care and the financial viability of healthcare organizations.

In clinical settings, AI can assist in analyzing patient data to predict outcomes, streamline diagnoses, and personalize treatment plans. AI algorithms can sift through mountains of medical records, lab results, and imaging studies faster and more accurately than human clinicians, helping to identify patterns and risks that may be missed otherwise. This leads to better patient outcomes and reduced costs in the long run.

On the administrative side, AI can automate billing processes, reduce errors, and even assist with scheduling and staffing. This reduces the burden on your human workforce and frees more time to focus on patient care.

A major key in implementing AI is having safeguards and reviews in place to ensure accuracy. But the cost of these measures is significantly outweighed by the savings of AI.

While implementing AI can seem like a daunting and expensive task, the long-term benefits are well worth the investment. Starting small—such as automating certain administrative tasks—can help you ease into more advanced AI applications over time.

7. Transition to Value-Based Care: Aligning Payments with Outcomes

The shift from fee-for-service to value-based care is one of the most significant changes happening in healthcare today. Under the value-based care model, healthcare providers are reimbursed based on the quality of care they provide rather than the number of services performed. For patients, this results in better care coordination and outcomes. For healthcare organizations, it means a focus on improving efficiency and reducing waste.

While this sounds like a win-win, the transition can be complex. Healthcare providers must adjust to new metrics, establish more collaborative relationships with payers, and adopt new technologies that track patient outcomes over time. The potential financial rewards are great, but if not managed well, the shift can lead to losses instead of gains.

Start by examining your current payer contracts. Are you properly incentivized to provide high-quality care? Are you tracking the right metrics to improve outcomes? Building a comprehensive strategy around value-based care requires solid planning, careful execution, and sometimes a significant cultural shift within the organization.

8. Enlist outside help

Maybe your organization took a gallant, internal run at implementing the above strategies, but the effort stalled because, hey, let’s face it, those enlisted to help already had too much on their plates. Or maybe those same individuals are too close to the everyday fray. Outside perspectives usually yield above-and-beyond results that often pay for the consulting cost when missed revenue leakage is identified and plugged. Consider bringing in optimization experts to be your trusted partner in attaining your financial health goals.

Become the Best Healthcare Organization Possible

Strengthening the financial viability of your healthcare organization is not just about tightening the budget; it’s about building resilience, adaptability, and a commitment to sustainable, patient-centered care. By streamlining internal processes, enhancing interoperability, ensuring accurate billing, addressing staffing needs creatively, managing costs strategically, adopting AI, transitioning to value-based care, and possibly seeking external expertise, you position your organization to thrive amidst the challenges of modern healthcare. At Smith Mountain Advisors, we believe financial health is essential for a healthcare organization’s ability to fulfill its mission of exemplary patient care. Embrace these strategies, and you’re not only securing your organization’s financial future but also empowering your teams to deliver the world-class care your patients deserve.