CFOs Look at the Staffing Shortage Crisis - and Its RCM and Automation Implications

Nationwide across the U.S. healthcare system, CFOs are facing a staffing shortage-fueled financial crisis, one that is requiring them to think about revenue cycle management and automation in new ways. Leveraging the best technology they can acquire to optimize their revenue cycle management (RCM) systems, rethinking staffing and other resource-intensive issues, thinking about alternative sources of revenue, and above all, readjusting their perspectives to be able to plan for instability and unpredictability going forward into the future. In a report published this spring by the Chicago-based Healthcare Financial Management Association (HFMA), which represents and supports CFOs and other senior finance leaders in hospitals, medical groups and health systems, CFOs spoke out about what they need to do in the coming months. The report is entitled “CFO of the Future: The new and improved healthcare finance leader of tomorrow,” and was authored by Lisa A Eramo.

‘The traditional fee-for-service model doesn’t work for a healthcare organization focused on trying to bend the cost curve.’ Marion works with Franciscan Alliance’s leadership team to advocate for value-based and bundled payment programs with commercial payers,” Eramo notes in the report. ‘It has been a journey we’ve been on for a number of years, and it has not been easy,’ she said.” Indeed, the Chicago-based Kaufman Hall consulting firm found this spring in its “National Hospital Flash Report: April 2022,” authored by Erik Swanson, and released on May 2, that, while some positive signs had emerged by March of this year, and “…hospitals saw early signs of relief as outpatient volumes and revenues returned and expenses eased with fewer high acuity patients, even so, the latest performance results suggest a long road ahead with actual hospital operating margins in the red for a third consecutive month as organizations struggle with inflation, national labor shortages, and other operating pressures.

The median Kaufman Hall year-to-date Operating Margin Index was -2.43 percent in March.” Indeed, even as the stats improved over this spring, the overall financial struggle for hospitals has continued, the report found, stating that “The median change in Operating Margin rose 32.7 percent from February to March and 85.6 percent compared to March 2020. Year-over-year (YOY), however, the median change in Operating Margin was down 48.7 percent and the median change in Operating EBITDA Margin declined 37.8 percent compared to March 2021.” At the center of all of this right now, experts agree, remains clinical staffing, especially nurse staffing, which is in real crisis, as more and more nurses leave healthcare rapidly or at least, leave their staff positions, often accepting contracts as agency/traveling nurses, even while staying in their hometowns. Many of our own staff shifted to becoming agency staff and traveled in the region,” causing a nurse staffing cost crisis. We did increase our base pay some, and 14-week contracts at a higher rate, and some scheduling options—not unlike what they would have to commit to under agency staffing. And we’ve seen some movement there.” The bottom line, he says, is that CFOs and their colleagues are going to have to continue to plan for volatility in some key operational cost areas.

A report posted on Sep. 7, 2021, by Patrick Boyle of the Washington, D.C.-based American Association of Medical Colleges (AAMC), noted in “Hospitals innovate amid dire nurse staffing shortages,” that “Health field leaders have been warning for years that hospitals face a nursing shortage. The main reasons, according to such groups as the American Nurses Association, are waves of baby boomer nurses entering retirement age, an aging population that will require more medical care (and more doctors and nurses), faculty shortages that limit the capacity of nursing schools to accept more students, and more nurses moving away from direct patient care or leaving the health field altogether because of stress. I’m personally concerned about rural hospitals; if you struggle to staff nurses in a rural hospital, there aren’t a lot of alternatives,” he says. In a recent survey we conducted on staffing concerns” - the firm’s “Reviving Workforce Resilience: 2022 Healthcare Workforce Survey,” published on May 16-"37 percent of our survey respondents said that they think the staffing outlook will improve in the next year, 33 percent think it will stay the same, and 30 think it will get worse.” And where there’s a nurse who did follow-up calls, maybe a part of that is done by a robot.” In other words, technology will inevitably need to be leveraged for a variety of purposes related to anticipated ongoing staffing shortages, especially of nurses, but also of others. “The notion that we should just continue to do everything we’ve been doing and assume somehow the elapsing of time, or our dashing good looks and effervescent personalities, will carry us through, is delusional,” Sylvan says.