CFOs rated cost reduction as the most important performance management activity for 2018, according to a new Kaufman Hall survey of senior finance professionals.
Nearly 30 percent chose "identifying and managing cost-reduction initiatives" as the most important performance management function for their organizations, from a list of five choices, according to the 2018 CFO Outlook: Performance Management Trends and Priorities in Healthcare.
The other four priorities, in order, are improving performance reporting to operational leaders (25.8 percent); predicting and managing the impact of changing payment models (18.1 percent); developing more integrated and planning processes across financial planning and strategic capital allocation (16.3 percent); and leveraging rolling forecasting as part of a more continuous planning and financial performance monitoring process (10.7 percent).
Most CFOs, however, also said they have limited confidence in their organization's ability to manage the financial impact of evolving business conditions. Only 15 percent said their organizations are "very prepared" to manage evolving payment and delivery models with current financial planning processes and tools.
Seventy-percent said they have cost measurement tools that are too simplistic or provide inaccurate data that can't be trusted or have no tools in place at all, according to the survey of senior finance executives at 350-plus hospitals and health systems.
Fifty-six percent of CFOs and executives said their organizations lack
access to clean, consistent, and trusted data, while ninety-percent think their hospitals should be doing more to leverage financial and operational data to inform strategic decisions.
CFOs said long budgeting cycles are preventing value-added analysis by finance teams. Sixty-nine percent have a budget process that takes more than three months from initial rollout to board presentation. For 9 percent of these organizations, the process takes more than six months.
The survey addresses the rapidly changing healthcare business environment, and the growing role and importance of the CFO function to inform strategic business decisions that will impact long-term success, according to consulting firm Kaufman Hall.