3 Biggest Challenges Facing Healthcare Administrators

For many practices, the burden of daily challenges like budgeting, office operations and staff management falls on healthcare administrators.

Different offices will face different challenges depending on location, patient demographics, staffing needs, and so on.

But there are some universal challenges that all healthcare administrators will have to deal with at some point or another.

The least of which include changes to healthcare legislature, the budgeting requirements and restrictions that result from those changes, as well as a shift in consumer and patient demand.

Other elements like staffing shortages can also impact decision making, leaving admins in a tough situation.

In most cases, however, there are things that can be done to remedy, or at least curtail some of the difficulties.

Here are the top challenges that healthcare administrators will face in the coming years and how to make the best of those challenges to come out ahead.

Challenge #1: Practice Cost Management

Caring for the financial well being of any business can be difficult, especially one as complex as a healthcare practice.

Getting reimbursed from insurance companies, collecting co-pays, paying staff salaries, managing supplies, updating tools and equipment, drug fees, legal fees, and other financial burdens can cause headaches for administrators.

In one healthcare administrator survey, 57% of those polled said that one of the top six challenges they face is expense reduction.

In the same survey, two-thirds of healthcare executives also found that budget and expenses were a major concern.

While there are certain elements that administrators may have no control over, there are ways to create a manageable budget that still keeps costs low.

For example, many practices can save on rent space by reducing the amount of paper files they use for patient medical records. Switching to Electronic Medical Records (EMRs) can aid in this endeavor.

Other cost-saving solutions include investing in the right staff (consider hiring MAs instead of RNs, or vice versa, for example) and focusing on staff retention strategies.

Staff inefficiencies are seen as one of the biggest in-office money wasters for private practices.

Making sure that your equipment is up-to-date is also important, but if you have control over the medical devices and vendors you can choose, look at less expensive alternatives to commonly used devices.

Smaller changes elsewhere in the budget, like switching to primarily digital marketing instead of print advertising, can also reduce expenses over the long haul.

Challenge #2: Changes in Pay Structure

Along the same lines as reducing office expenses, another challenge that administrators will have to deal with in the coming years is changes to pay structures.

Most healthcare practices struggle with payment, and studies show that over half of all hospital bills don’t get paid at all.

Changes in pay structure rulings surrounding Medicare and Medicaid – which are outside of administrative control – can also cause serious financial setbacks for any healthcare practice.

New regulations make it mandatory for hospitals to charge fees based on the patient’s overall quality of care and outcome, instead of a pay-for-service model used in the past.

MACRA, or the Medical Access and Chip Reauthorization Act, was passed to help practitioners transition into these new regulations, but many clinics still remain unaware of how it affects them.

In one study, 50% of practitioners said they had never even heard of MACRA, even though it’s designed to help them get paid.

Other mandates, laws and changes to healthcare around the nation can also impact the financial status of private practices.

There are a number of uninsured and underinsured Americans throughout the nation that may have their own financial strain preventing them from seeking the care they need.

Offering care for the non- or under-insured can be a challenge for practices, especially considering that payment plans or financing can be difficult to manage.

While administrators may not always be able to resolve these issues on their own, it will be important to pay attention to any mandates regarding pay schedules in the future, as changes in pay structures could impact clinic survival.

Take the time to stay informed about MACRA and any other Medicare and Medicaid rulings that could impact your payment schedules so that you don’t miss out on opportunities to get paid when it matters most.

Challenge #3: EMR/EHR and IT Requirements

The move to electronic medical records has been an ongoing process for many clinics for some time now (since 2009).

While around 78% of private practice physicians and 96% of hospitals have upgraded to digital records, there are still concerns about the costs of transition and upkeep for EMR/EHR solutions.

For example, some practices may not have the budget to hire an in-house IT specialist to manage and maintain an EMR system.

Other healthcare clinics may find that certain vendors charge too much to store their data, or they are worried about the safety of patient data being stored in the cloud.

Other technology challenges, like the use of Big Data to improve healthcare operations, as well as things like technology acquisitions and implementations, have also been somewhat slow to catch on.

According to one survey, healthcare technology ranked as the third greatest challenge faced by healthcare practices.

While it can be a good idea to hire a Chief Information Office who can oversee some of the technological challenges, this also creates budgeting concerns for smaller practices that still struggle to hire more essential staff.

In some cases, having healthcare technology is a privilege.

So what can healthcare administrators do to make sure their technology is up-to-date and effective without breaking the bank?

The key is to start small and focus on the essentials.

Upgrading to EMR/EHR is a necessity, but that doesn’t mean you have to settle for expensive solutions.

Look for EMR vendors that can work within your budget while addressing safety concerns. You might find that it’s cheaper using a third-party vendor for your digital records than keeping things in house (then again, you might not).

Take your time to research the right EMR/EHR solutions, and remember that technology is an investment in the future.

You can also take steps to make smaller IT changes that will make your practice more profitable, like upgrading to digital intake forms and improving your website.

These changes can be made for lower costs and add significant value over time.

It will also be important for healthcare administrators to stay current on the latest technology trends to assess which IT solutions will be helpful for the practice and which will be a waste of time, money and energy.

Interested in how healthcare administrators can help to reduce costs? Download our free resource that gives 5 way to save.

Final Thoughts

While healthcare administrators face many challenges, some will be more important to the future health of the practice than others.

Some will also be more controllable than others. Payment schedule changes, for instance, may be outside the administrator’s control, but understanding other rulings like MACRA can help mitigate that challenge.

Understanding how technology fits into your practice will also be an essential component to success.

Administrators will do well if they can find smart IT solutions that can help them improve the efficiency of their practice, retain staff, and improve patient care, all while keeping the practice compliant and under-budget.