Rolling Forecasting Through COVID-19

Another buzzword in healthcare is Rolling forecasting; under descending financial pressure, increasing revenue, and market volatility. 

Most healthcare industries have started implementing their forecasting strategies right during the Coronavirus pandemic. But the pandemic is not over yet and we are slowly moving back to normal; The New Normal (Living with the Coronavirus).

In their new report, Kaufman Hall stated that even before the coronavirus outbreak healthcare industry in the US  is facing a stumble in revenue. 

Due to the steep decline in Hospital financial Health, 2020 is considered “Tumultuous” since the decline of hospital margin hits 55.6% downhill. 

We cannot blame the virus completely for the downfall; even before the pandemic, most hospitals hit a negative operational margin. To be precise the hospital margin was 3.5% but why?

 When the coronavirus hits, the figures kept going down; facilities are forced to stop non-Covid care programs since they are busy handling the virus-affected patients.  This resulted in a decrease in patient visits and revenue; on the other hand, expenses in the form of PPE kits soared up. (Most facilities ran sort of this kit, physicians, nurses, and nurse practitioners had to buy it themselves.)

Reasons behind the downward flow of healthcare operational margin are:

  • Increased Covid-19 hospitalization rate

  • Decreased elective care program visit

  • Declined outpatient revenue

  • Expense soaring up

Know the statistics behind the tumultuous 2020:

By end of the 2020 calendar year, hospitals in the US closed down their financial and operational records with the following figures.

  • Without funding from the CARES act, the median operation margin was as thin as 0.3%. It was 2.7% with the CARES act funding.

  • The invasion of Covid-19 caused a decline in patient days which resulted in the drop of 7.3% (low) discharges in the entire calendar year.

  • But the average length of stay from January to December increased by 6.6%.

  • Emergency visits took the hardest hit, the figures fall short of 16.2% in the entire 12 months.

  • The operating room minutes also descended to 10.5% in 2020 when compared with the previous year.

Why Rolling Forecasting?

If you want accurate forecasting of your financial health and transparent data then Rolling Forecasting is the only solution. Rolling forecasting helps finance experts to develop a new finance model appropriate for this pandemic situation, to positions themselves well in the short-term and long-term effects that brings hanges to the liquidity, profitability and capital structure. 

Rolling Forecasting empowers healthcare organization in making the correct decision and bringing change to the budgeting environment.

By making use of current data available in the hospital records comparing it with the present data meanwhile taking multiple scenarios into account rolling forecasting is carried out. 

Most of the organizations usually run three tests with conditions such as Very favourable, Favourable, and Unfavourable in their Rolling forecasting model.

Based on the analysis made by rolling forecasting, finance expert calculate and make strategies for their financial health for short-term and long-term. Rolling Forecasting provide more detailed insights compared with traditional budgeting method.

Not only in Budgeting but Rolling forecasting helps healthcare organization in staffing adjustments as well. 

The world is slowly going back to normal, but many hospitals till now experience the effect of the pandemic by means of reduced flow in patient visits. Every organization is struggling to set things back to normal which is not an easy work like a snap of finger to do. 

Budgeting and Financial drop can be pulled up by using Rolling Forecasting model. If you have doubts on implementing rolling Forecatsing model in your organization feel free to Contact our Finance leaders for expert insights.

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Pain points in Business Budgeting and Solutions To Address!

No matter how you start budgeting with an optimistic mind it will always make you insane by all the details, reports, calculation etcetera etcetera… We all know that the budgeting season keeps you up and running that you might forget the night and day.

Budgeting is a time-consuming process where a whole department should be deployed to accomplish the process perfectly within the timeline. But somehow it will drag with lots of modification, cuts, and inclusions.

These pressures you handle during budgeting turns into pain points and ultimately into problems. The endeavor to grow stresses you which becomes even worse when you have to calculate what is going to happen in the future and prepare a budget based on that data.

OOPS! That will wear you out. No worries! Here’s the rescue; after long research, we have noticed some of the pain-points that businesses face during budgeting and found some solutions to address those problems.

  • Managing Cash Flow

The cash that flows within your organization is the most difficult to handle above all. Most small businesses run by limited funds at hand with slim margins and they tend to struggle when a client makes a little delay in their payment. What should they do? 

Sometimes their expense exceeds their income and unexpected expenditures damage their cash flow which will be a big hit to their budget. 

Here comes the…

Solution:

Calm Down! Never stress yourself out because your brain cannot think clearly when you stress it out. Manage your accounts accurately and never miss even a single penny. 

You have to be up-to-date about the money that goes in and out of your enterprise. This may look simple but this is where many businesses lose it. You may even hire software like PivotXL to meet your accounting requirements. 

  • Staffing

We can predict the budget but one human cannot predict another and their future plans. Yup! Some staffs work with you for a long term and some might quit and go whenever they wish. 

Hiring and retaining those staff is the bigger pain; when you hire an employee, you spend your time and money in training them for their role, and suddenly when they walk-out your efforts are wasted without fetching any profit to the business. 

Solution:

To be honest – we cannot stop an employee from walking out when he decided to quit. But we can suggest you another way of saving your time and money in the recruiting process. 

Make use of HR software available online that can meet your hiring needs. AI-based recruiting software automates every hiring process from finding a qualified candidate, training them, Attendance, salary & appraisals, regulating the compliance issues, and finally firing them when they are inefficient.

  • Payment Overdue

You might think that keeping the customers in a tight rope can make them pay you perfectly. This is where most business owners go wrong, We cannot be right at all times. 

When you keep your customers in a tight fold they will be frustrated with you and might pay you later than expected which will make a massive lump in your current cash flow. 

 

Solution:

Be friendly (not over-friendly)! With your clients. Offer excellent customer service and make them feel like it’s their responsibility to pay you on time. It won’t cost you for being friendly with your clients. Go for it! And so share with your friends.

Another tip! If a client is purposely making late payments then feel no guilty and cut your ties with them. You can find another client rather than sticking with the one who always pays you late.

  • Set Realistic Targets

We all love to achieve what we assume is impossible but that doesn’t work with budgeting. While setting budgets within your team, make sure to set targets that are achievable. 

If you set unrealistic targets and force the team to achieve them then you are going to lose your staff. They will be overwhelmed. It is more like indirectly you are forcing them to quit. 

Solution:

Set targets that are achievable and motivate your employees. Greet them every day (if you can). Arrange for team outing and refreshment sessions at regular intervals and see where your staffs can take you.      

That’s all from our end! Now it’s all in your hands to implement them and bring success to your business. If you have any queries or expert advice Contact Us and we will solve it as much as possible.

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