Financial concerns, including driving growth and cutting costs, are top of mind for today’s healthcare leaders. Without a basic understanding of a healthcare organization’s financial drivers, decisions on inventory management, cash flow, cost management and revenue capture are made in silos, with no one truly managing the big picture.
Learning the language of finance helps your team – even those who are not in directly finance-related roles – to understand the challenges and the opportunities your organization faces. Considering aspects of daily healthcare, such as CMI adjusted length of stay, case mix index, profit margin or the rising cost of supplies, gives your team a clearer picture of the true state of your business.
With most of the country’s healthcare organizations facing increasingly ambitious economic goals, it is advisable, even critical, to implement internal communication programs that education and inform, to ensure evert employee can contribute to the financial success of the hospital.
Empower Your Managers. Allowing your leaders at every level to make decisions that are tied to the economics of the hospital sets your entire organization up for success. Providing this type of visibility creates the opportunity for your managers to think long-term and to understand the big picture. Without transparency around the economics of your organization, managers often make decisions focused on the short-term in order to cut costs and they may miss opportunities to increase long-term value.
Educate Your Team. Most healthcare employees joined the industry to help patients, and many are hesitant to mix finances with patient care. However, the two are inextricably linked and one cannot improve without attention to the other. Before your team can make better decisions regarding care, they need to understand how their decisions impact the cash flow of the hospital. Once they know the basics, they will start to identify ways to make improvements that benefit both the patients and the bottom line. In the long-term, it will hardwire financial education as a part of your culture when you include it as an aspect of on-boarding for all new employees.
Encourage Open Communication. Once the team understands what the numbers mean, it is important to openly share where the numbers stand. Transparently sharing the key metrics your organization tracks and how each is connected to your long-term strategic goals will keep the team united and committed to achieving those goals. Demonstrating key ratios and providing regular updates on metrics linked to KPIs will give your team visibility into how and why decisions are made.
Build Checkpoints into the Process. A key part of creating a culture of open communication and education is keeping your team updated on their progress and identifying where improvements still need to be made. Provide regular reporting on the financial performance of the organization and encourage discussion around the numbers – this creates the opportunity to further educate the team on the current financial challenges and gives you the opportunity to re-focus and re-energize the team to achieve their goals, while brainstorming on new solutions for challenges on the horizon.
Patient care is the first priority of every healthcare organization, but to ensure that priority is supported appropriately, financial health must be front and center. To keep your team informed and focused on your organization’s specific goals and challenges, it is critical to provide financial education, be transparent with your data and encourage team members to be part of the solution. To learn more about leadership development and building a successful team, contact the Cejka Search team here.