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Common Challenges in FP&A in Healthcare Organizations

The global pandemic has changed the face of the world. One of the biggest industries that has been at the forefront of this pandemic is healthcare. And the focus is not just on patient care, providers, and the other support staff, but also the underlying business divisions that manage the day-to-day operations, especially finance.
As strategic advisors to the Office of Finance, our corporate performance management practice has amassed years of expertise rooted in a myriad of projects delivered for both payers and providers. Through this experience, we see common challenges in FP&A again and again. Chances are, you’ve experienced one or more of these pain points yourself.

Inflexible Non-Driver-Based Planning Models
More now than ever before there is an imminent need for an integrated, flexible driver-based planning model. When we talk of healthcare – it’s not just the provider and the hospital business, but also the research and education business areas that go along with it. These different business areas could have different planning and reporting needs along with differences in accounting practices. One of the biggest challenges of a health care organization is different shields that roll up under one umbrella – Clinics, Hospital, Research and Education. An integrated system that caters to the needs of all the different shields at the same time provides an enterprise-wide analysis and review capabilities, is one of the basic needs.

Inability to Scale with Growth
With the changing environment and dissolving international boundaries – Healthcare organizations are also expanding. Healthcare organizations are having to look beyond just local processes. They need to consolidate and analyze global requirements.

Inability to integrate different functions/models
As any other organization – revenue is one of the biggest items that Healthcare organizations focus on. Revenue planning can be quite involved and varying by different service lines defined by patient diagnosis, and volumes driver by different providers/patient type. As such a financial Planning system is required that can analysis by service line/payor mix as well as provide a traditional view of a full P&L. All this along with revenue planning for education business areas and grant/fund planning for research areas which can be quite different as well.

Inability to model Staff based on volume
Next biggest challenge for healthcare as of late has been staffing issues. When planning, ability to link staffing to physician ratio or staff to volume ratio becomes highly critical. A waterfall model whereby volume drives the staff needs and corresponding clinical effort by providers is the ideal state.

Inability to plan and compare different scenarios
Some of the historical models and past actual data is no longer a predictor for future. This issue has become even more pronounced with the pandemic and the emergence of new variants. A system that not only looks at history but also allows strategic models with different scenario planning is the need.
An example scenario could be the Clinic referring patients to the downstream areas like lab, radiology departments. The model requires to create what-if scenarios, impact analysis of referring patients to internal lab services or utilizing external sources, comparing profitability of different patients by service line, payers and/or different group codes.

So how to decide which models work best, which tools to use and how to solve for these pain points ? Stay tuned for solution discussions.

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Nandini Nehru

Nandini Nehru is a Sr. Solutions Architect at Perficient in the Oracle EPM group. She has worked for ten plus years on various projects performing analysis, design, development, configuration and testing of applications. She has implemented Oracle Hyperion planning, HFM and Essbase applications for various industries like Healthcare, Public sector, Manufacturing and Oil and gas. She is a certified Oracle Trainer for Oracle Hyperion Financial reports, Planning Create and manage and Administrator class. She is also Oracle Hyperion Planning 11 Certified Implementation Specialist and Oracle Enterprise Planning and Budgeting Cloud Service 2017 Certified Implementation Specialist. Nandini works closely with the financial planning team at her clients across different industry verticals and implements IT solutions to meet their financial planning and budgeting needs. Nandini holds an honors degree in Bachelor of Engineering in Information technology and an MBA in Finance from Rice University. She was also a recipient of the renowned Jones Scholarship at Rice University, Houston.

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