Across all industries, finance has traditionally provided timely and accurate reporting of an organization’s past performance. Today, those expectations are changing as technology offers new possibilities. While historical reporting remains relevant, other functions are increasingly looking to finance for near real-time and more accurate forecast reporting to make more informed business decisions.
Healthcare finance teams are in a position to take advantage of smarter use of data and the adoption of predictive analytics models. By transferring data from old architectures into more agile systems, combining internal data with a broader range of external sources, and exploiting the skills of data scientists, finance can produce far richer insights.
As healthcare CFOs take on a more strategic role in their organizations, enhancing reporting with predictive analytics will help improve decision making and organizational execution. Predictive analytics provides the key to planning investment, evaluating shifts in the business model and value proposition, and assessing future scenarios.
Laying the foundation
According to Accenture’s latest research, "The New Healthcare CFO" industry CFOs aspire to implement predictive capabilities. Finance teams are evenly split between carrying out tasks that report the past (51 percent) and those that predict the future (49 percent). There is, however, a clear intent to become more forward-looking and to provide other parts of the organization with better information to create new value.
CFOs view themselves as the ones to take the lead in planning and realizing the future. Some 75 percent state that finance is best placed, of all the organization’s functions, to help the business understand the economic model underpinning new technology investments. Moreover, 82 percent believe the ability of finance to forecast the long-term value of specific technologies is much greater than that of other functions, including technology.
Our research reveals four areas where CFOs have made the most progress in applying advanced financial reporting: planning, budgeting and forecasting; investment planning; risk management; and setting business goals and investments.
They also cite other areas for future enhancement. CFOs state their number one priority for making the most of new technologies, for example, is innovation and the monetization of new care delivery models. Investment planning and physician network development are also singled out as priority areas of focus.
Closing the gap
Healthcare finance organizations have progress to make to close the gap to advanced predictive analytics. While 88 percent say they have adopted predictive analytics solutions tools to some extent, less than a fifth have rolled them out across the entire finance team. This is a superior adoption rate to the other technologies being adopted by finance—including robotic process automation and artificial intelligence—but nonetheless suggests that many are in the early days of advanced predictive reporting.
Moreover, finance teams will need to consolidate their strengths in other areas if they are to exploit new tools to their potential. Data analytics—where finance already has an edge over other functions—is one clear enabler of better predictive outputs. So too is the establishment of a rich, accessible data set from which to extract insight. In this regard, the finance function needs to get better at combining external data sources, such as population health information, with the internal data sets it already has.
In an environment where resources remain constrained, and competition for those resources is growing, such intelligence helps the finance function with the means to support the organization in predicting profitability more accurately and in making more informed decisions on where it is placing its capital.
Conclusion: The edge
Trends show CFOs in high-growth healthcare organizations are poised to advance the strategic direction of their organizations by generating key insights through the use of data and analytics. These insights combined with forward thinking can enable healthcare CFOs to pivot to predictive and address affordability, lay the groundwork for pricing and boost revenues.