Perspective from Andrew Limouris, President & CEO, Medix
U.S. healthcare budgets have never been simple, but now they’re more complex and scrutinized than ever.
Capital planning involves prioritizing components of a system’s infrastructure to decide which will get the biggest and smallest pieces of the pie. This field is evolving as the ground shifts under the feet of the healthcare leaders charged with the task.
The pandemic was a watershed moment that upended previously existing norms in the healthcare industry. Suddenly, care providers, researchers, administrators, and others had to reinvent how almost everything got done.
Nurses, among those most burdened with the responsibility of somehow making everything work, are experiencing burnout at unprecedented levels. According to the National Council of State Boards of Nursing, 100,000 nurses quit their jobs during the pandemic. Many others cut their hours, switched to administrative roles, pivoted to remote work, or explored travel nursing, the latter of which can be exceptionally costly for hospitals and health systems. There continues to be an alarming nursing shortage, which has dramatically changed recruiting and hiring practices.
Among their budget priorities for 2024, healthcare leaders will be streamlining and simplifying systems and processes to help right the post-pandemic boat.
A Balancing Act
The U.S. economy is another elephant in the room, including rampant inflation, much of which eclipses reimbursement. Leaders must weigh cost increases against crucial priorities, including employee well-being and quality care. Added into the mix is the cost-benefit of incorporating the best tech available, along with the talent to support it. Every day, we see more organizations turn to staff augmentation with temporary talent, as a means of maintaining the support staff they need, while adhering to tight budgets.
In a post published by Becker’s Hospital Review, C-suite healthcare professionals from across the country shared budget goals, strategies, and obstacles to both heading into 2024.
Among the hot-button priorities were:
- Addressing medication costs
- Addressing issues that include cost effectiveness when staffing hard-to-fill roles from within
- Cultivating strong partnerships across industries
- Enhancing cybersecurity measures
- Expanding access to primary and preventive care, non-surgical specialty care, and existing surgical specialties
- Making healthcare more affordable
- Redesigning the workforce with the goal of improved retention
Many of these leaders echoed the sentiment that uncertain economic times make the process more difficult, including Dr. Hilton Hudson, chief of cardiothoracic surgery at Franciscan’s Michigan City and Olympia Fields health systems. Dr. Hudson is also CEO of HPC International, an educational purchased services supplier for health care, corporations, and academic institutions.
In this piece in Healthcare Business Today, he describes five healthcare industry trends to watch for in 2024:
- Eliminating healthcare disparities
- Expanding access to ACA (Affordable Healthcare Act) insurance plans
- Greater focus on information security
- More AI presence in healthcare
- Protecting the safety of healthcare workers
Healthcare Leaders all in on Technology
Despite the aforementioned economic uncertainties and razor-sharp focus on balancing costs and benefits, healthcare organizations must continue to innovate to handle a higher volume of patients and improve patient care. According to a recent survey conducted by QuestionPro and Medix Technology, 54% of America’s healthcare technology leaders plan to “increase recruitment efforts,” and 52% plan to “explore outsourced staffing or consulting services” over the next two years. These staffing investments are primarily for implementation and optimization projects related to electronic health records, customer relationship management systems, security, and cloud infrastructure.
The current environment has forced healthcare leaders to revamp their staffing strategies. In 2024, we expect to see an even greater emphasis on building cost-effective and flexible teams—teams that can be augmented quickly based on project needs. In the same survey, nearly 40% of respondents said that they plan to hire temporary workers over the next two years for the following reasons: to manage costs and stay within budget (39%), and/or to have the ability to quickly scale staff up or down based on changing demand (33%).
With an industry-wide push to innovate and a tight labor market, it will be critical for hospitals, health systems, and provider organizations to prioritize recruiting early and often in 2024—and even now—to win the battle for talent and control costs.
Increased Government Scrutiny and the Biden-Harris Proposed 2024 Budget
Using the pandemic as its pivot point, the federal government is raising its scrutiny of healthcare systems and making government-sourced funding more challenging to obtain.
During the worst of the COVID-19 onslaught, Congress spent $178 billion to help hospitals stay staffed, equipped, and afloat. That crisis triggered closer monitoring of how healthcare systems managed their funds, teams, and patients. Congress took a special interest in healthcare in its discussion about the future of Medicare.
On March 9, 2023, the United States Department of Health and Human Services released the Biden-Harris proposed budget for 2024. The HHS budget reserves $144.3 billion for discretionary spending and $1.7 trillion in mandatory funding for fiscal year 2024. Here are some of the budget’s overarching priorities:
- Broaden access to healthcare to allow better care for underserved communities and people experiencing homelessness
- Build scientific knowledge to help those who have or have had cancer, including $7.8 billion towards prevention, detection, and treatment
- Extend Medicare solvency by at least 25 years
- Expand the healthcare workforce, in part through $2.7 billion for the Health Resources & Services Administration, which is charged with broadening healthcare workforce capacity nationwide
- Prioritize public health preparedness, for which $20 billion was earmarked for entities including Centers for Disease Control and Prevention and National Institutes of Health
- Reduce drug costs, especially for seniors and anyone using insulin
- Safeguard the welfare of children and seniors through support of programs like the Child Care and Development Block Grant and Head Start for children coupled with stronger Medicaid home and community-focused initiatives for seniors
- Transform behavioral healthcare to improve and broaden substance abuse and mental health services, including $836 million to fund crisis intervention and suicide prevention
Healthcare leaders and government budget planners appear to be working toward the same goals: a range of innovations and reforms that lead to more equitable access. Healthcare leaders all seem to be focused on reducing costs, improving secure communications and record-keeping, and, ultimately, improving patient outcomes.
At Medix, our goals have always focused on positively impacting lives, and partnering with our clients to create tailored solutions to their workforce needs. Through seasonal surges, economic uncertainty, budget constraints and more, Medix is committed to empowering healthcare organizations to deliver positive patient outcomes while managing their bottom line.