PriyaPatelTLDR:
A survey by BDO Healthcare found that approximately 80% of healthcare CFOs expect improved profitability in 2024, following a similar upturn in 2023. However, regulatory pressures, COVID-era funding clawbacks, and challenging loan and covenant agreements remain challenges for CFOs. The survey revealed that dealmaking is on the agenda for 72% of CFOs, with promising sectors including specialty services, home care, ambulatory services, and telehealth. Strategic cost reductions and improved revenue cycle management are areas of focus for CFOs, with labor shortages leading to staff cuts and increased spending on recruitment. AI is also a focus for healthcare leaders, who need to identify where it can have the greatest impact while ensuring proper data usage and oversight.
A survey conducted by BDO Healthcare has found that healthcare CFOs are optimistic about improved profitability in 2024, following a similar upturn in 2023. The survey revealed that approximately 80% of the CFOs surveyed expect their organizations’ profitability to improve in 2024, indicating a positive outlook for the industry. However, the survey also highlighted some challenges that CFOs need to be aware of, including regulatory pressures, COVID-era funding clawbacks, and challenging loan and covenant agreements.
Despite the overall optimism, healthcare CFOs need to approach their financial strategies with caution. The report authors noted that misplaced optimism can occur when CFOs are unaware of or fail to consider the potential challenges and risks they face. They emphasized the importance of cash flow management, cost optimization, and risk management to ensure the continued provision of care to patient communities.
The survey also indicated that dealmaking is on the agenda for many healthcare CFOs. While 72% of respondents expressed interest in pursuing deals, the report highlighted the need for flexibility due to the persistently uncertain market. Factors such as geopolitical crises, inflation rates, the upcoming US presidential election, and consumer uncertainty can influence the execution of deals. The report identified specialty services, home care, ambulatory services, and telehealth as promising sectors for dealmaking.
In terms of financial management within their organizations, healthcare CFOs will focus on strategic cost reductions and improved revenue cycle management. The survey revealed that more than one-third of organizations plan to implement strategic cost reductions, including staff cuts, despite ongoing labor shortages. However, 48% of organizations plan to increase spending on recruitment, indicating a need to address staffing challenges. Additionally, 46% of organizations plan to increase compensation and benefits for their staff in 2024.
The survey also highlighted the growing interest in artificial intelligence (AI) within the healthcare industry. Healthcare leaders are exploring how AI can enhance various aspects of their operations, such as customer satisfaction, supply chain optimization, and physician productivity. However, the report authors cautioned that proper data usage and clinical oversight are crucial to ensure the effectiveness of AI systems. They noted that while AI can have significant benefits, it should not replace human decision-making and expertise in healthcare.
In conclusion, the survey findings indicate that healthcare CFOs are cautiously optimistic about improved profitability in 2024. While there are promising opportunities in dealmaking and the potential of AI, CFOs must navigate regulatory pressures, funding challenges, and loan agreements. The report emphasizes the need for CFOs to focus on cash flow management, cost optimization, and risk management to ensure resilience in their operations. Furthermore, strategic cost reductions, improved revenue cycle management, and addressing labor shortages are key priorities for healthcare CFOs in the coming year.
