The “freshness” of your budgets matters more than ever.
You can thank a pandemic, the rising influence of consumers in healthcare, and changes that impact your local facilities, but the costs and risks associated with static budgets are compounding every day. The answer to this challenge, broadly, is dynamic budgeting — budgets that can roll with the punches to keep your margins healthy and ensure you’re investing where your patients, staff, and community need it most.
But the shift is more fundamental than increased meeting frequency or even hospital decision support software that reduces cycle time. Rolling budgets are labor intensive and can be difficult to sustain without the proper approach. To ensure the full positive impact of dynamic budgeting, hospitals will need to consider a few fundamental shifts in perspective.
Prioritize Organizational Alignment
One of the most challenging aspects of dynamic budgets is a shift in responsibility. Instead of being concentrated in one or two departments, now, the entire organization owns budgeting.
But without the proper planning and tools that will facilitate clean communication and interdepartmental coordination, avoidable conflicts will likely arise. To get ahead of this, make sure that all affected departments are involved in your transition and that they are aware of both their responsibilities and the benefits they stand to see from a new way of approaching hospital budgeting.
On the software side, encourage your staff to take advantage of functionality like communication and collaboration features, customizable budgeting preferences, and dashboards that facilitate a shift away from spreadsheets. It will be critical that clinicians feel empowered to contribute to the budgeting process and comfortable with any new tools that are being introduced to their work.
Embrace a New Approach to Data
Shorter budget cycles don’t happen if your departments and users are stuck wading through inefficient and outdated data management processes.
One of the biggest challenges in implementing a new approach to budgeting is that there’s little room for wasted time. This means that the hours you’re currently spending on cleaning and reconciling data — they might have posed minimal risk in the past, but now they can completely derail your transition to dynamic budgeting. To minimize time spent reconciling and maintaining data, focus on implementing simple, singular data feeds — the kind that prioritize accuracy and support communication between all your financial tools and applications.
Not sure if this is an issue at your organization? A few conversations with analysts and financial managers to determine how much time they spend each month on reconciling reports will shed light on the potential free space you have if you rethink your data strategy.
Invest in Agility
If you choose a rolling forecast approach, you’ll need systems, strategies, and tools that can adapt quickly.
In an age of rolling budgets, your people need technology that supports speed and efficiency — and that starts behind the scenes. If they’re still sifting through software that was cobbled together on the back end from yesterday’s decision support tools, they’re at a disadvantage and your budget efforts are likely dead in the water.
Look for opportunities to shift FTE hours from data maintenance and hygiene to the analysis required to support increased budget frequency. Additionally, simple, instant, customizable reporting will be a boon since fresh information is now a requirement for your budget efforts.
The move to dynamic budgets can be a major change for your organization, but it can actually be the catalyst that moves you to a new strategic relationship with technology and new levels of freedom and enablement for your clinical and financial users. Whatever your methodology, to learn more about the tools that can enable this shift, start here.