“With healthcare organizations, their downfall can be that they don’t have proper data management and data governance to actually use the data assets they have.”
Brennan said that, compared to an industry like banking which commonly uses predictive analytics to identify fraud, manage portfolios, analyze loans, healthcare is about providing patient services, and has different capital constraints, traditionally relying on more descriptive and manual analysis of data. What this means is that the industry, as a whole, is a bit behind others in modernizing its finance operations, Brennan said, which can present itself as an opportunity for improvement if realized. In that circumstance, the introduction of process automation leveraging RPA technology can produce better data gathering, collection, and timely cash flow management and forecasting.
Healthcare organizations also have the burden of an unusual amount of government compliance requirements, Ramirez said, something automation can track and address. Healthcare’s relative lag in modernizing finance compared to other industries also means lessons learned from other sectors can be adopted with less trial-and-error.
Health systems must provide high-quality healthcare but also have to manage expenses for medical supplies, equipment and staffing, so the goal is to find a sweet spot where patient outcomes are of foremost concern while the cost-savings from better financial management are realized, Brennan said.
For instance, Tyler said from a purely financial interest, a healthcare system may have the potential to adopt a fairly aggressive bill collection process or pursue rapid growth. But leadership may not want to achieve optimal financial goals if doing so conflicts with the mission of a healthcare system, because its overall goals are likely different than those of a bank or a profit-focused business.
“All health systems are focused on margins and good financial performance, but there is some altruism involved in this business, too.” Tyler added.
More versatile options
One prime consideration for healthcare organizations looking to improve their finance functions is determining whether it should accompany moving the ERP systems into the cloud. This trend started less than 10 years ago in healthcare, and for many organizations, costs savings and reduction of risks of compromised data were the primary drivers.
However, Brennan said moving organizational data to the cloud also can have a real benefit for the finance function since not only can it be a transformative process, but likely enables better usage of peripheral and complementary automation solutions such as RPA, optical character recognition (OCR), and intelligent document processing. Brennan said there are opportunities for improvement in many finance functions. Routine and transactional tasks associated with month-end close, account reconciliations, comparing balances of critical general ledger accounts, and invoice processing can be automated more, and particularly if their systems have not migrated to a cloud-based solution. Adopting technology for scanning and processing documents directly into the ERP system can enhance invoice payment and contract management, for example.
More significant opportunities can be found for financial reporting, too. Having systems in the cloud can more readily enable organizations to pull disparate data from multiple sources, including from electronic medical records’ billing information, and with that use, for instance, enable more accurate, consistent, predictable, reliable reporting for management on a month-to-month basis.
“We’ve done a lot of work in modernizing accounts payables process and technology,” Brennan said, as well as maturing cases in cash forecasting and accounts receivable management.
The shift to automation in the cloud takes organization and effective change management, Ramirez said, since as an organization is able to become more predictive in its financial processes, it takes a mindset shift to be able to make decisions based on the probabilities that the models are generating.
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