Respond Quickly to Change
How does the traditional budget present challenges for hospital finance teams?
Planning and budgeting for hospitals and healthcare delivery systems is badly broken
In hospitals across the U.S., thousands of hours are spent each year creating a budget that is typically tens of millions of dollars off the mark and cast aside almost as soon as it is submitted. Rather than helping to control costs and build strategic alignment, the budget is viewed as a distraction, providing little to no value and even negatively impacting performance.
The typical large healthcare delivery system spends four to six months and up to 20,000 hours building their annual budget. Senior executives and financial managers devote up to 30 percent of their overall time throughout the course of the year to this process. But 66 percent of healthcare chief financial officers say their organization’s budget is irrelevant within the first three months, due to built-in inaccuracies and the difficulty of adjusting the plan to changing conditions.
Today, as healthcare providers face a volatile environment, they will need to adopt more advanced planning methodologies to react quickly and optimize performance.
What can hospital finance leaders do to adopt more advanced planning?
Adopt advanced planning methods like rolling forecasting
By adopting advanced planning methods like rolling forecasting, organizations can more quickly, accurately, and efficiently model and analyze new opportunities and risks in their financial planning.
StrataJazz® assesses how a volatile healthcare environment with receding volumes, new payment models and increasing costs will impact your organization’s profitability. Using the tool and advanced planning methods, your hospital can respond to change, providing more timely and accurate monthly projections and financial performance statistics while identifying opportunities for improvement.
Using rolling forecasts to advance planning
Use a rolling forecast to respond to change
Leverage a library of forecasting algorithms to more efficiently drive your baseline plan and analyzing new opportunities and risks
Improve your organization’s planning over time using automated lookback analyses to identify the most accurate methodologies
Update the forecast in days for even complex health systems, whether on a monthly, quarterly, or as needed basis
Adopt a rolling forecast to improve your organization’s agility and focus on closing gaps