Healthcare is changing at a rate faster than ever before. Long-term care facilities face increasing consumer expectations, declining reimbursement rates, changing regulations and a shift in payment for care. Keeping up with the dynamic environment of healthcare is of utmost importance, but comes with its own set of challenges, particularly when it comes to managing financials.
Finance teams in the healthcare industry face three major challenges to growth and improved performance – delivering data in real time, remaining HIPAA compliant and accessing forward-looking analysis.
How LTC facilities overcome these challenges is dependent on the financial management solution they implement. Any large technological or management switch can be challenging, and some see only the risk of change. Whether it be their razor-thin margins, limited operating budget, or concerns about protecting personal health information (PHI) as a major barrier, financial executives in healthcare facilities have been slower to adopt modern, cloud-based technology. However, finding the right financial solution is the foundation for growth at LTC facilities. By ensuring the right financial solution is in place, LTC facilities can overcome these common challenges as well as have tools such as industry and data-driven insights needed for rapid growth.
Create access to real-time data
One of the biggest problems LTC facilities face when it comes to accounting is the overwhelming amount of data that they need to consolidate. Often times teams are collecting data from multiple entities from all across the country, all with different financial systems, at the same time. And even more often, LTC facilities need to leverage this data to make decisions about the future of the company. With outdated technology, controllers, CFOs and executive team members are often forced to wait for the data to be collected and consolidated at the end of the month, and by the time they receive it, the information is already out-of-date.
With a cloud-based financial management solution, LTC facilities can gain unparalleled visibility into their finances. With cloud financial software, the finance team has access to real-time information at the click of a button — anytime and from anywhere. Using a solution with a modern general ledger can also open up the ability to capture operational data for deeper analysis — such as looking at costs by treatment, department, caregiver, etc. — and across locations. LTC facilities can utilize this up-to-date data to develop reports that better support facility growth and scalability.
We’ve seen LTC facilities reduce infrastructure costs faster, unlock collaborative access to information, and reduce manual processes. For example, Bay County Medical used Sage Intacct to increase finance team productivity by 50%, shortened its monthly close process by 90% and gained real-time access to data via dashboards enabling them to make the necessary strategic decisions to support a $12 million capital improvement project.
Always stay HIPAA-compliant
As a healthcare company, staying HIPAA compliant is always top-of-mind. When looking at new technology, its impact on your compliance is important, and that is especially important with your financial systems.
Unfortunately, not all financial management solutions are created equal, and some are not HIPAA-compliant and do not adequately support the needs of LTC facilities. With HIPAA compliance fines can be significant, it’s important to ensure your financial technology partner can support your HIPAA compliance. Your focus should be on things like improving patient care, not on whether your technology solutions are leaving you at risk of sharing access to personal health information.
One way to ensure you have a good technology partner is to ask them to sign a Business Associates Agreement (BAA). This contract establishes specifically what the software provider has been engaged to do with any PHI in their system and the standards of protection of PHI by the company. For example, Sage Intacct has specifically built in added audit capabilities to ensure HIPAA compliance for our financial system and we offer to sign a BAA with our healthcare customers. If the vendor you talk to won’t do this — it is time to look for other alternatives. It’s not just the fines and criminal prosecution you risk; it’s about reputation. Residents at LTC facilities expect their PHI to remain private and a breach of that trust can be far worse for the organization.
Look at the future of your company
The right financial management solution should allow you to not only automate tedious tasks and have access to real time data, but also provide the ability for forward-looking analysis so you can plan the future of your facility. Finance teams are not just number crunchers anymore, reporting on what happened previously, they are responsible for thorough analysis and guiding their organizations into the future. In order to succeed in this new normal, having a financial system that offers increased visibility into receivables and financial performance across multiple entities and the ability to analyze patient profitability and caregiver performance is a must. With modern, cloud-based systems, healthcare professionals have the ability to automate tasks that free up time for increased analysis and the tools necessary to do what-if planning.
For example, Sage Intacct financial dashboards show company executives the big picture at a glance. Every user can customize their dashboard to show the metrics that matter most, and enables them to track financials with operational metrics and ratios, like available capacity and revenue per treatment. They can easily analyze performance and ratios across locations to identify trends and share best practices to improve performance.
When personal healthcare adopted new financial technology, each nursing home was able to analyze its revenues, expenses and income on a per-patient-per-day basis. Using Sage Intacct, Personal Healthcare became a more agile business. Incorporating the number of residents in each facility at any given time, Personal Healthcare’s regular monthly financial reports now provide profit and loss data for both the current month total and the current month per-patient-per-day, as well as six-month and year-to-date figures for comparisons. Now they are able to make better, faster decisions about how to improve revenues or minimize expenses.
Using technology to achieve your financial goals
Increasingly, LTC facilities have realized that the problems they face with traditional finance systems outweigh the stress of trying to keep up without modern, cloud-based technology. Facilities can remain HIPAA compliant, have better visibility into profitability and location-specific finances, and save time across the board when they choose to shift their accounting system to the cloud. With a finance team equipped with all the right tools, LTC facilities will be empowered to grow faster and have technology designed to scale right along with them.
Brian Bogie is the director of the healthcare vertical for Sage Intacct, a leading accounting and financial management software that is part of Sage Business Cloud.