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Insights & ExperienceEditor's Pick
Hospitals Overspending on Corporate Services, Could Reduce Costs Without Impacting Quality
2020 HFMA/Navigant, a Guidehouse Company, Corporate Services Trends Survey
Seventy-five percent of provider executives think their corporate services spending could decrease – 36% of them suggesting reductions of 10% or more – without negatively impacting quality or efficiency, according to a survey from HFMA and Navigant, a Guidehouse company.
Results from the survey of 114 hospital executives also show:
- More than half of execs say they’ll be held accountable for reducing corporate services budgets (29%) or holding them flat (26%) over the next year. To do so, they’re targeting revenue cycle management (23%), supply chain (20%), and IT (19%) expense reductions.
- Providers lag other industries in leveraging IT and automation of back-office functions through RPA and ERP:
- Just 15% of providers have automated their corporate services functions.
- While 32% of providers have deployed an ERP system, only 12% have optimized them. Moving forward, 51% of providers predict they’ll deploy or optimize their ERP over the next 2 years.
“Revenue growth remains a constant challenge for hospitals and health systems due to such aspects as stagnant reimbursement and meager inpatient growth, prompting many providers to grow inorganically via M&A while targeting corporate services for meaningful cost reductions. This economic reality requires providers explore creative opportunities to simplify and streamline a complex organizational structure while consolidating, automating, and outsourcings functions to drive more efficient and effective corporate and shared services delivery.
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Robert T. Green, Partner and leader of Guidehouse’s Corporate Services Peer Network and Database, comprised of 55 health systems nationwide