A flawless budget sheet is an ideal that few organizations, if any, can claim as a reality. Excess spending and miscalculated allocation amounts are just a part of the game when it comes to managing financial outlooks in any industry. However, recent numbers suggest to me that the healthcare sector has taken it too far this time, demonstrating a lack of fiscal responsibility that needs to be addressed immediately. With powerful ERP healthcare software available on the market today, there's no excuse for medical field decision-makers to allow for such poor budget management and negligence.
Money Washed Down the Drain
Just how bad is the current state of affairs in the world of healthcare spending? According to a recent article from ZaneBenefits, analysts predict that an estimated $765 billion will be spent excessively in 2014 alone. The source broke down this alarming figure, revealing that $210 billion will go toward unnecessary services, $190 billion will be spent on excess administrative costs and missed preventive care opportunities will result in another $55 billion being thrown away. These components do not add up to the $765 billion sum, suggesting that analysts may not even know where money is going.
While these findings may be frustrating for patients, medical professionals and stakeholders alike, there is hope for a more financially sound future in the healthcare industry. I believe that ERP software for healthcare can dramatically cut down on the frequency of faulty budgeting, providing institutions with enhanced visibility of their funds and forecasts. An article from Medical Economics revealed that there is no shortage of cash being funneled into the sector, but that with increasingly complex demands on the rise, these funds will have to be used wisely.
"The improving economy demonstrates that structural changes in the health sector have taken the steam out of run-away cost inflation," the piece stated. "The challenge for industry executives is to continue to control spending even in the face of countervailing winds such as expensive new innovations, improved consumer confidence and an aging society that requires more medical care and services."
Smart Budgeting, Starting Now
With billions of dollars seemingly disappearing into thin air, there will not be a quick fix for this crisis. Addressing healthcare's financial fiasco may take time, but medical institutions can take a step in the right direction by seeking IT consulting and mapping out a plan for the future.