My 14-year old daughter made a huge mistake, which would horrify any teenager: She gave her father access to her Instagram account. As a tech geek, my real goal wasn’t to check up on her (I swear), but rather to see whether the hype of Instagram matched the utility. Instead what I found was the answer to a different and much more important question — why healthcare costs are such a mystery.
Applying Agile Principles to Healthcare Finance
Healthcare is one of the most, if not the most, dynamic industries in the US. From shifting demographics, to evolving business models, to complicated regulatory oversight, there is no shortage of change to which healthcare systems must be able to adjust.
While care delivery is slower to evolve, teams responsible for the administrative aspects of healthcare systems, such as FP&A, are finding it increasingly difficult to plan for and and manage financial performance amidst all this change.
Taking a cue from the fast-paced world of software development, FP&A teams can apply a number of principles from Agile methodology to help them address these complicated dynamics:
Principle 2: Welcome-Changing Requirements Even Late In Development. Agile Processes Harnesses Change for Customer (i.e. the healthcare system, as an internal customer) Competitive Advantage
- Completion of the budget should be the first, not last, step in planning for the following fiscal year.
- Instituting a quarterly forecasting process, either within FP&A or ideally involving cross-functional teams, can help evaluate targets-based short term changes affecting financial performance.
Principle 4: Business People (i.e. Finance Teams) and Developers (i.e. Clinical/Operations teams) Should Work Together Daily (i.e. Regularly)
- Engage operational, clinical, and service line leaders in designing annual and quarterly plans.
- Empower operations managers to understand and improve the financial performance of their departments/business units.
Principle 12: At regular intervals, the team should reflect on how to become more effective, then tune and adjust behavior accordingly.
- Do not underestimate the need to re-evaluate planning processes, tools, and methodologies.
- Establish and enforce a cadence for discussing the effectiveness of planning and performance management processes, and embrace opportunities to improve.
Agile methodology isn’t just for developers. Leveraging these principles can help your organization manage financial performance amidst the complicated and evolving dynamics of our industry.
Core reference: Agile Manifesto © 2001