Healthcare IT, The Invisible Shortage
There is much discussion today about personnel shortages that challenge our nation as a whole. Specific to healthcare, the nursing shortage has been pushed to the forefront with hospitals struggling to employ or contract enough nurses to handle the patient population. Additionally, personnel shortages can be found throughout the hospital and especially back-office positions. Necessity is forcing more and more hospitals to automate revenue cycle processes historically performed by team members to keep up with needs. The problem…shortages in IT are limiting the provider’s ability to implement solutions.
Healthcare leaders, already faced with large IT budgets, are having to re-evaluate how they allocate their IT spending. More IT resources are desperately needed to implement automation and solutiuons which can offset the current personnel shortages found in the non-clinical areas of the hospital. Shortages in the revenue cycle are costing providers millions of dollars due to lower clean claim rates and losses incurred due to timely filing. These shortages and loss revenue are causing IT leaders to reevaluate how they budget.
How to Budget?
Top healthcare leaders are now attempting to use time tested budgeting models to formulate IT spending for the upcoming years as to how it will reflect in business transformation or revenue growth costs.
Will this transform our organization’s business?
Will this improve the organization’s business function?
Will it make the organization money?
Billing and claims are the most important piece of a healthcare organization’s revenue cycle. Today, billing and claims processing makes up approximately 39% of a hospital’s IT expense. This staggering statistic is based mostly on maintaining legacy systems and just keeping the systems running. EMR upgrades and the increase of technology stacks to include increased patient engagement, increased digital transformation and needed automation cause industry experts to predict IT job growth in the healthcare sector at 9% over the next couple of years. That translates into approximately 34,000 jobs over the next decade. With improvements to business function potential increased revenue, what is the question?
Healthcare IT spending for 2022 is estimated at $124 Billion with projected annual growth over 5%.
The Wild Card
While healthcare IT leaders are hoping to increase their resources, budget cuts to cover clinical personnel requirements loom. Nursing shortages have had a huge effect on hospital budgets. During the peak of the COVID pandemic, travel nurses were paid as high as $175 per hour. Hospital administrators are working diligently to reduce the need for contract nurses and returned to employed nurses. Until then, non-clinical areas, including IT, will continue to be affected. On the non-clinical side, personnel shortages, reduced collections, and elimination of COVID related funding are causing additional strain on the overall financial health of the organizations. Budget reductions needed to offset increased clinical costs and lower income will surely compete with the needed increase of IT resources.
What can hospitals Do?
Look outside of the organization for partners with low cost/high yield technology solutions. Partners requiring little IT resources. Many hospitals today are utilizing project teams to identify such solution providers and vet how these solutions will affect the organization’s bottom line with little to no additional burden on the IT department. Automation areas with much financial success are coding, eligibility, and claim status. Bots are also being utilized frequently to eliminate human interaction and increase profits.
Eventually, healthcare leaders will have to double down on their IT investments to ensure the long-term financial stability of their organization. In the meanwhile, strategic partnerships with highly functioning technology companies will help the organization bridge the gap to increase profits until personnel costs can be contained. For more information to find out how partnering with MedCo can help increase your bottom line, please call 1-844-528-4338 or contact email@example.com.