Although hospitals sit atop $60 billion of accounts receivable, a surprisingly large percentage of chief financial officers lack confidence in the people responsible for collecting those accounts, a new survey has found.
Moreover, many CFOs are willing to consider outsourcing some or all business office functions.
The survey marked the first time Zimmerman & Associates, a Hales Corners, Wis.-based consulting firm, has attempted to quantify CFOs' opinion of receivables outsourcing.
"To my knowledge, this is the first survey of this specific nature," said Chuck Lund, the firm's president.
Conducted in May and June, the survey of 2,000 hospital CFOs generated 150 responses. The findings should serve as "a wake-up call" to the hospital industry, Lund said.
In the survey, business offices were rated either "somewhat ineffective" or "average" by a total of 42% of CFO respondents, while another 42% of CFOs rated their business offices "somewhat effective."
On "overall competence," business office staff were said to be "not competent," "below average" or "average" by a total of 40% of respondents. Thirty-seven percent deemed the staff merely "somewhat competent" (See chart, p. 3).
These mediocre-to-unsatisfactory impressions have been formed at a time when CFOs are under growing pressure to reduce hospital expenses and increase cash, said David Zimmerman, chairman and chief executive officer of Zimmerman & Associates.
"So I'm not surprised that hospital CFOs are considering outsourcing," he said.
A majority of CFOs-88%-said they're willing to consider outsourcing some or all business office functions, even though CFOs who have had some previous experience with a receivables outsourcing firm gave them only average marks. Only 12% said they have no interest in outsourcing.
Asked to rate the importance of various issues affecting outsourcing decisions, CFOs indicated that the most important factor is patient satisfaction, followed by increased cash flow and cost reductions.