Finance executives in healthcare today are facing a unique combination of pressures and headwinds. Large-scale inflation has placed severe pressure on everything from the procurement of supplies and services to facility maintenance. Fast-moving changing trends in the workforce have led to staffing turnover, instability, and labor shortages, further impacting the bottom line.
Finally, the possibility of recession or deepening economic challenges loom over leaders and decision makers in the healthcare sphere. In a report that calls current circumstances in healthcare a “gathering storm,” industry consultants McKinsey & Company offer a stark observation: “The highest inflation levels since the 1970s, the growing likelihood of a recession, and low consumer sentiment are buffeting the US economy—and the healthcare industry is not immune to their effects.”
But the same report points out that forward-thinking leaders in healthcare also have opportunities in today’s conditions. Potential best practices that have been under consideration have now become acts of necessity. Areas such as simplifying administrative functions and enabling cost reduction through technology automation have gone from luxuries to requirements for the profitability of healthcare organizations.
The procurement of goods, supplies, and services is the lifeblood of healthcare organizations such as long-term care hospitals, senior living facilities, and inpatient rehab facilities. It is also one of the main areas of financial spend, yet it has traditionally been mired in inefficient, time-intensive, and poorly tracked practices and workflows that cost more than they should.
The benefits of automated procure-to-pay software solutions for healthcare procurement can be found in every sector of the healthcare sphere. Enterprises in both post-acute care and non-acute care are perfect candidates for shoring up against the “gathering storm” with P2P automation.
E-procurement solutions have the versatility to provide results across a range of healthcare markets. Automation in procurement, inventory management, and accounts payable reduces costs in the following ways:
- Finding and Eliminating Duplicate Spending and Over-Billing. E-procurement’s data visibility makes identifying and flagging duplicative spend and financial leakage through over-billing the low-hanging fruit of cost savings. Healthcare organizations can start seeing immediate spend, recoup over-billing expenses, and avoid such pitfalls moving forward. Soon crucial functions all the way to accounts payable processes are in the proper alignment.
- Saving Expenses from Manual Systems. The healthcare industry has been hesitant to adopt automation innovation in a variety of areas, and procurement and accounts payable are chief among them. Manual, paper-driven processes and workflows across the procure-to-pay continuum simply no longer make sense. E-procurement efficiencies eliminate related costs associated with paper and postage and save money through greater workforce efficiency.
- Leveraging Data and Reviews. E-procurement opens doors to easy-to-use access to reports such as spending patterns, top financial outlays, and spending against budget in real-time. Pulling automated reports from centralized invoices gives financial officers deep insight into where the money is going, with pre-set alerts and visibility to make the right financial adjustments and decisions.
- Managing Vendor Relationships. Vendor relationships in markets such as senior living and skilled nursing facilities are crucial. Automation across the procure-to-pay process enables a clear and direct understanding of the costs of goods and services and documentation of errors or duplications. This helps set clear and verifiable expectations with each vendor or supplier, which is particularly crucial in times of inflation and supply chain disruption.
- Maximizing Workforce and Staffing. Automating procure-to-pay processes can make a crucial difference in times of workforce instability and staffing challenges. Productive employees can be freed up from cumbersome workflows to make a greater organizational impact. The impact of unfilled roles might be lessened, and automation can have a positive impact on morale and talent retention.
- Reviewing Contracts and Contract Compliance. With the data collection, reporting, and sorting capabilities of procure-to-pay automation, easy-to-use access to contract review and compliance are available for both the procurement office and financial leaders. This can lead to areas of cost reduction and potential renegotiation when circumstances change.
- Ensuring Supplier and Inventory Accountability. Outdated manual processes often mean healthcare procurement teams can’t get a real-time handle on the status of orders from suppliers and can’t access much-needed accurate inventory counts. E-procurement brings oversight and accountability into inventory management and every transaction with vendors and suppliers.
- Accessing Insight into Spending Trends. With the reporting capacity of P2P automation, spending, budget, and inventory trends become highly visible. Spend against budget is available in easy-to-use real-time reports and alarms. Short- and long-term trends can be identified and analyzed before excess spending gets out the door. Trend analysis can be one of the most impactful tools against inflation.
- Making Spend Completely Transparent. Access to easy-to-use data tools at your fingertips is the greatest cure for combatting the unidentified “rogue” spending that undermines budgets, forecasting, and the fiscal bottom line. In non-recessionary times, e-procurement is simply the best practice; in times of financial challenge in multiple markets, it’s simply a must.
- Empowering Planning. Leaders in healthcare finance, operations, and procurement can best serve their enterprise with the benefit of mindful and intentional planning focusing on cost containment and the freeing up of financial resources for expansion or investment in current facilities.
Looking to Reduce Your Annual Spend?
Procurement Partners helps customers reduce their annual spend by more than 10% with an easy-to-navigate procure-to-pay solution where users can place orders and process invoices for all suppliers. Procurement Partners is the leading procure-to-pay management system for post-acute, non-acute, and continuum of care providers and has helped organizations achieve 40% time savings and 95% supplier contract compliance through automating the procure-to-pay process.