The two resounding topics on healthcare websites and in related blog posts: (1) increased labor costs and (2) burnout or shortages of clinical staff. The article published in “Healthcare Finance” Labor Budget Increases, Staffing Shortages Loom Large for Healthcare Executives in 2019 highlights this exact topic.
This isn’t surprising considering access to healthcare for all has increased; therefore, there are more patients to see which, in turn, requires more staff which results in increased labor costs…see where I’m going here? It’s easy to see how this can quickly become a major concern for providers to analyze and keep up with demand.
It becomes evident while working with numerous healthcare clients that not all healthcare companies are treated equally regarding their maturity scale when answering specific labor questions, providing/analyzing data, or even supporting a labor productivity solution. Edgewater Ranzal’s complimentary Healthcare Labor Productivity Assessment Workshop not only helps reset clients’ expectations, but also uncovers clients’ enterprise-based labor productivity solution capabilities.
Our solution utilizes Oracle Cloud or on-premise technology to help clients see an immediate return-on-investment just by analyzing contract agency usage statistics, providing detailed overtime analysis, and offering the ability to compare productivity across national standards that are loaded into the system. Additionally, we help clients align their labor productivity solutions with their planning/budgeting processes to improve budget detail and accuracy. Comprehensive experience with data integration – often a challenging task for clients – allows us to work with staff to bring all the required data elements together to create a cohesive picture of labor productivity details.
Take a look at our webinar recording of The Key Ingredients to Understanding Labor & Productivity to learn more about our solution to uncover best practices in addressing labor productivity in your organization. Then contact Edgewater Ranzal’s Healthcare experts to answer specific questions about implementing a solution to help cut labor costs and provide data-rich analytics to your organization.
Healthcare providers are always seeking innovations and evaluating strategic alternatives to meet growing demand while healthcare legislation is adding challenges to an already complex industry. As the population continues to age and development increases the demand for high quality healthcare, providers must put themselves in the optimal financial position to deliver the best care to the communities that depend on them.
To do this, many are turning to a service line model so that they can identify profitable areas of their organization that will generate future growth and capture market share. In order to identify the strategic value of each service line, organizations need to have a long-range planning tool that will enable them to quickly forecast each of their service lines over the next 3-5 years and evaluate growth areas so that investments can be made in the service lines that will generate the greatest long-term economic value for the organization.
Utilizing Oracle’s Hyperion Strategic Finance, Edgewater Ranzal has helped many organizations chart a realistic financial plan to achieve their long-range goals and vision. Some of the ways that we have helped organizations are as follows:
- Forecast detailed P&Ls for each service line using revenue and cost drivers such as number of patients, revenue per procedure, FTE’s, and payer mix to accurately forecast profit levels of each service line.
- Easily consolidate the forecasted service line P&Ls to view the expected financial results at a care center level or for the Healthcare organization as a whole.
- Layer into the consolidation structure potential new service lines that are being evaluated to understand the incremental financial impact of adding this new service line.
- Run scenarios on the key business drivers of each service line to understand how sensitive profitability, EPS, and other key metrics are to changes in variables like number of patients, payer mix, FTE’s and salary levels.
- Compare multiple scenarios side by side to evaluate the risks and benefits of specific strategies.
- Evaluate the economic value of large capital projects needed to grow specific service lines beyond their current capacity. Compare the NPV and IRR of various projects to determine which ones should be funded.
- Layer into the consolidation structure specific capital projects and view their incremental impact on revenue growth and profitability at the service line level as well as the healthcare organization as a whole.
- Use the built in funding routine of HSF to allocate cash surpluses to new investments and to analyze at what point in time the organization is going to need to secure more debt financing to fund its operations and its capital investments in specific service lines.
Regardless of where you are in your understanding, analysis, or implementation of service lines, a viable long-term strategy must include a critical evaluation of how will you identify the market drivers for growth, measure sustainable financial success, and adjust to changing economic, regulatory, and financial conditions.