The healthcare industry is increasingly complicated, with a need for personnel to comprehend massive amounts of data, navigate ever-changing regulations, implement new technologies and operate in the new value-based care model. Health executives must manage these challenges to ensure that patient care doesn’t become unmanageably expensive. Most health systems utilize at least one technological platform to keep track of data and expenses, with many using numerous platforms.
Health information managers are essential to understanding the information that these tools provide and for strategizing for the future. Individuals interested in understanding the connection between health information and healthcare financial management should consider earning an advanced degree, such as an online Master of Science in Health Information Management.
Why Healthcare Financial Management Matters
Healthcare financial management deals with the business side of healthcare by making sure that facilities provide quality patient care in a fiscally responsible manner. Proper management of a health organization’s finances allows it to improve patient care, minimize risk, make needed investments, and explore new streams of revenue.
Until a few years ago, most care facilities charged payers for each service performed or product used, which made billing somewhat simple. That has been changing as more providers are implementing a value-based payment model. In that system, caregivers are paid based on patient health outcomes rather than on services performed. Healthcare providers are rewarded for helping patients improve their health, including by helping them reduce their risk of chronic disease, which reduces the long-term cost of patient care.
Leaders in healthcare finance management must monitor, mitigate, and prevent risks. The healthcare field carries a significant amount of risk related to patient safety and caregivers making life and death decisions. Beyond those factors, healthcare risk management also involves ensuring that a facility’s electronic medical records are secure from hackers, which includes keeping up with the latest in medical research and understanding the complex reimbursement policies of insurers and the government. Technology can help manage all these pieces of data, but health information managers are vital to understanding the compiled information.
Investing in medical research and specialized medical equipment can lead to more successful and cost-effective care strategies. The ability to track and analyze financial expenditures as well as related patient outcomes and the overall cost of care gives leaders the information they need to make smart investments for future growth.
New Revenue Sources
Data gleaned from proper financial management can also suggest alternative methods for generating income. For example, a hospital might acquire a nearby physician’s practice to add outpatient services to its revenue stream. Or, in a state where cannabis is legalized, a healthcare facility might consider adding dispensary services to its offerings. Understanding the potential risks and rewards of each option enables healthcare leaders to make better decisions.
Health Information and Healthcare Financial Management
Health information managers are responsible for such tasks as overseeing patient billing and preparing department budgets. These tasks play a vital role in helping facilities develop effective and cost-efficient healthcare strategies.
Due to the complexity of the health information manager’s duties, those in the role must have advanced mathematical, technical, analytical, and organizational skills. Technical skills are necessary to understand the software hospitals use for data management. Analytical abilities are required to help executives make important strategic decisions. Organizational skills are vital because managers deal with a wide range of information and documents. Health information professionals must also be able to communicate effectively, including having the ability to present complicated data in easy-to-understand terms, and must possess strong problem-solving, leadership, and time-management skills.
Emerging Trends in Healthcare Financial Management
Modern trends in technology are also impacting healthcare financial management. Artificial intelligence (AI) has numerous medical applications, including in tools for early melanoma detection, robotic-assisted therapy for stroke patients, and software that helps capture quality images and video of the heart.
Blockchain can be used in payments and payer contracts by automatically and transparently verifying and authorizing contractual information; blockchain can also be used to aggregate data on a population’s health. And the adoption of cloud technology can cut operating costs as well as improve access to healthcare through telehealth services. Those in health information management roles can apply the skills they have in technology to incorporate AI, blockchain, cloud computing, and other trends into their finance-related strategies.
Careers in Health Information Management
According to the U.S. Bureau of Labor Statistics, the job outlook for medical and health services managers is expected to rise by 18% between 2018 and 2028, a rate that is much faster than the overall average. The aging population should only increase the demand for healthcare services. In 2019 the median salary for these professionals was $100,980.
Learn how the University of Illinois at Chicago’s Master of Science in Health Information Management program can help you advance your career. With coursework in health information technology and systems, quality management and data analysis, health information systems analysis and design and more, the program can help you gain the skills you need to embark on a career as a health information manager.
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Becker’s Hospital Review, “9 Things to Know About Blockchain in Healthcare”
Healthcare Finance, “Investment in Medical and Health R&D Not Keeping Up with Needs of Nation, Report Finds”
Health IT Outcomes, “5 Ways Cloud Computing Is Impacting Healthcare”
HealthTech Magazine, “The Future of Artificial Intelligence in Healthcare”
Houston Chronicle, “Major Objectives of Healthcare Financial Management”
Houston Chronicle, “Role of Financial Management in Health Care”
NEJM Catalyst, “What Is Risk Management in Healthcare?”
U.S. Bureau of Labor Statistics, Medical and Health Services Managers