A new survey found that 80% of health system CFOs believe that their organizations need to engage in digital transformation efforts if they’re going to remain competitive – or perhaps even to survive.
To prepare the report, which looked at how CFOs and other financial leaders view finance technology and outsourced services, Black Book Research surveyed 1,534 executives in healthcare organizations, including revenue cycle managers, controllers, vice presidents of finance and business office managers.
In the report, Black Book says that the role of health system financial leaders is becoming far more technical. “Financial managers must have a strong technical background and CFOs will require the data science skills that currently fall under the health system CIO,” it argues.
The survey results seem to bear out this conclusion. When asked about their technology-related responsibilities, 97% of CFOs reported being tech purchase influencers in finance areas and 66% in non-finance areas. Forty-four percent said they used data analytics to inform their technology strategy, and 80% said they were involved in managing finance department technology. In addition, 98% of CFOs said they were responsible for risk associated with health system IT and 44% manage the IT investment budget.
Researchers also found that 83% of financial leaders rated big data and advanced analytics as the biggest disruptors to their current workflows and operations, and 67% of financial leaders rated emerging finance-related technologies as the biggest disrupter to their health system operations.
Despite the growing importance of technology to their job, many seem to be struggling to get their arms around it, with 85% of senior healthcare financial leaders telling Black Book that they didn’t have suitable financial metrics for IT ROI, compared with 36% of CFOs in other industries.
To date, just 8% of hospitals have had 50% or more of their finance work digitized or automated since 2017, with 12% of hospitals having 26% to 49% digitized or automated, 48% having 1% to 25% digitized or automated and 30% having none or close to none digitized or automated.
However, those organizations that have made progress in this area have been happy with the results. Of hospitals which have digitized more than 25% of their financial processes, 86% have seen a substantial return on investment and 3% a minimal return, with none reporting that they hadn’t seen any return at all.
The top healthcare financial process automated by respondents in Q2 2019 was accounts receivable/accounts payable, with 80% of healthcare finance leaders reporting this shift, followed by financial reporting and control (84%) and working capital management/treasure (70%).
In addition, 86% of healthcare financial leaders expect to automate financial planning between 2019 and 2023, along with advanced financial analytics (83%), budgeting and cost account (79%), forecasting (75%), strategic planning (61%) and financial reporting (58%).
Meanwhile, given the strong initial returns, it’s little wonder than 79% of CFO respondents and 89% of all other senior finance officers in health systems expect to increase their digital transformation investment by the end of 2020, with 68% projecting that they’ll increase such spending by more than 20% by the end of Q1 2020.
Also of note, 94% of CFOs said that they intend to dedicate more time to the use of digital technologies to finance tasks without CIO input over the next five years.