The healthcare industry is a complex business model with unique challenges, including managing financials, supply chain, and hiring and developing talent. On top of that, the industry is in the midst of drastic changes. Not only is the shift from fee-for-service to value-based reimbursement impacting business models, but hospitals are also getting hit hard by the COVID-19 pandemic, from increased patient volume to strained resources and staff.
More than ever, the healthcare industry needs ways to address the challenges they face in everything from supply chain management to staffing. Luckily, modern tools can help healthcare organizations adapt to these changes, stay competitive, and scale to growth. Modern tools like a cloud-based enterprise resource planning (ERP) solution.
Read on to learn more about what an ERP is as well as what those in the healthcare industry should look for from an ERP solution.
What is an ERP?
Think of an ERP solution as the central nervous system of your organization. In addition to collecting information about the activity of all your various departments, it makes this information available to other parts so they can use it productively. Amazingly, a 2016 Black Book ERP survey revealed that less than a third of all hospitals in the US used an ERP product, despite how much one could improve their efficiency. (Just imagine how effective you’d be at work without a central nervous system…) Three years later, Black Book published a report in 2019 that showed that 94 percent of US hospitals are considering outsourcing their ERP.
This lack of adoption is likely due to healthcare providers focusing their investments on their electronic health records (EHR) systems and neglecting the back office. But now the back office is coming to the forefront. Just as healthcare organizations need lab technicians, nurses, doctors, and more to ensure patients get the best care possible, they also need folks in payroll, IT, and finance to ensure that everybody gets paid and that all those fancy technologies keep working the way that they should.
In other words, they need an ERP.
How ERPs Can Help Healthcare Organizations
If you’re thinking about implementing ERP software at your healthcare organization, you need to think about what’s most important to you. Obviously, whatever solution you pursue should boost operational efficiency, improve patient care, and provide cost monitoring. When you’re evaluating ERP solutions on the market, you need to make sure they deliver on these key functions and features to maximize your investment.
Financial Planning and Management
Your ERP system should also be able to keep track of patient payments, costs of supplies, and services without extra administration staff or the risk of inventory mistakes. It can also ensure payments from various managed care providers are reasonable—benefitting both providers and payers. These features will help maintain the profitability of your healthcare organization while keeping patient care affordable.
Data Security and Compliance
Your ERP acts as a central repository for all your data: EHRs, insurance claims, lab results, etc. A lack of recorded medical information could put your hospital at risk for medical malpractice, (and a breach of data could cost you a ton). Whatever ERP solution you choose should be secure and HIPAA-compliant.
Supply Chain Management
Advanced supply chain management features can help you keep track of supplies and medical tools. Supplies account for nearly one-third of a healthcare organization’s total budget, making the supply chain an area to focus on for cost-saving. Improved efficiency in supply chain management can also impact customer care, as your staff can shift their focus from supply-related tasks to taking care of the patient.
Talent Recruitment and Development
Another major expense for healthcare organizations is turnover. An effective ERP solution can maximize your resources by streamlining the process from hiring to onboarding and professional development. Also, depending on your needs, we recommend you look for solutions that can manage compensation structures like union contracts, contingent labor, and FLSA mandates, to save you from headaches down the road.
Ready for an ERP Solution?
Implementing an ERP solution in your healthcare organization can offer you a wide variety of ways benefits, from improving the efficiency of your supply chain to helping with financial planning and management. Lightening the load on the business side of things also means your healthcare providers can focus on delivering the best patient care they can.
An option that many of our clients have been implementing lately is Workday’s Healthcare solution. If you’d like to learn more about it, check out our recent article highlighting some new Workday features healthcare organizations should love from the company’s upcoming 2020 R2 release.
If you’re ready to implement an ERP solution, our senior-level Workday consulting team is here for you. We understand the challenges you face in the healthcare IT space and will bring that experience to your project to ensure you have a successful implementation.
Contact us today to get started.