Health System Operating Margin Outlook
Achieving Greater Efficiencies Through an Integrated Approach
Health systems need to take a holistic approach to margin improvement, focusing on areas such as workforce optimization, supply chain management, revenue cycle, and clinical care transformation. Hospitals are complex organizations where financial, operational, and clinical areas are interconnected. For example, improper clinical documentation leads to coding issues, which leads to increased denials. Workforce shortages in clinical areas lead to capacity constraints and lost revenue. An integrated approach to margin improvement drives greater efficiencies than siloed efforts that focus on individual components of the organization. Hospitals that take a holistic view of their operations— aligning financial, clinical, and operational goals—are better positioned to achieve long-term sustainability.
An Integrated Approach Drives Greater Efficiencies than a Siloed One
A Purpose-Built Healthcare Partner
Impact Advisors, a leading healthcare management consulting firm, is at the forefront of providing the expertise, tools, and strategies required to address these challenges. With a proven track record of award-winning leadership, technology expertise, and a commitment to healthcare-specific solutions, Impact Advisors is uniquely positioned to guide health systems through this complex landscape.
With a comprehensive suite of services designed to target each of healthcare’s strategic priorities, including financial improvement, clinical efficiency and quality, workforce optimization, and more, and leverage data and technology to make improved performance sustainable, Impact Advisors delivers lasting, measurable results that empower hospitals to succeed.
Impact Advisors’ Comprehensive, Integrated, Value-Driven, and Sustainable Solutions
Impact Advisors’ Integrated Margin Improvement approach is rooted in leveraging a health system’s existing infrastructure, particularly its technology portfolio, to drive sustainable margin improvement.
Technology-Connected Margin Improvement
By optimizing the use of existing EHR, ERP, and other digital tools, healthcare providers can drive operational efficiencies, reduce redundancies, and improve patient care outcomes. This enables hospitals to achieve measurable financial gains without requiring significant additional investments in technology. Impact Advisors has an unmatched understanding of electronic health records (EHR) and enterprise resource planning (ERP) systems. This expertise and strong partnerships with vendors in both spaces allows us to integrate technology into the broader margin improvement strategy in ways that maximize its impact. Health systems invest heavily in their EHR and ERP platforms. Our approach focuses on helping clients get the most out of these systems by aligning technology with operational and financial improvement goals. This “technology-connected” approach ensures that improvements are not only sustainable but also scalable across the organization.
Deep Expertise and Vendor Partnerships to Maximize Value of Technology
Tailored Approach Designed to Meet Clients Where They Are
Every health system has different needs, priorities, and ongoing initiatives. Impact Advisors’ modular approach to margin improvement allows us to create custom solutions tailored to the unique needs, priorities, and ongoing initiatives of each client. Whether focusing on revenue cycle optimization, clinical care improvement, supply chain efficiency, or all three, our solutions are flexible enough to address the most pressing challenges hospitals face while being adaptable to ongoing organizational changes.
Guiding Principles for Margin Improvement
Impact Advisors’ integrated margin solutions are built on a set of guiding principles that inform every step of the margin improvement process. These principles are:
Integrated Margin Improvement Framework and Deliberate Sequencing:
We use a comprehensive framework that ensures all margin improvement activities are aligned with the health system’s overall strategic goals. We follow a deliberate sequence of steps to achieve maximum impact.
Systematic Approach and Multidisciplinary Planning:
Effective margin improvement requires input from across the organization. We ensure that all relevant stakeholders—clinical, operational, financial, and technological—are involved in planning and execution.
Rigorous Project Governance and Data Management:
Data is at the heart of effective decision-making. We implement strong governance structures and data management protocols to ensure transparency, accountability, and accurate performance tracking.
Leveraging Best Practices and Toolkits for Implementation:
Our approach is grounded in proven margin improvement methodologies. We bring a wealth of best practices, toolkits, and templates to guide implementation, ensuring that initiatives are executed efficiently and consistently.
Success in Large Health Systems
Impact Advisors has demonstrated success working with large health systems to achieve overall financial and operational goals. Our clients have realized measurable improvements in areas such as revenue capture, labor productivity, care quality, and supply chain management. By leveraging existing technology infrastructure and focusing on integrated solutions, we’ve helped health systems achieve their margin improvement objectives without requiring significant new investments.
Conclusion
As hospitals head into 2025, the healthcare industry is seeing signs of improvement following the disruption caused by the pandemic. Financial pressures, rising expenses, workforce shortages, and increasing regulatory complexities require hospitals to adopt careful management strategies and sophisticated planning. Health systems must focus on integrated margin improvement strategies that leverage existing assets and drive sustainable results. Impact Advisors, with its healthcare-exclusive focus, extensive technology expertise, and commitment to impactful and sustainable performance improvement, is uniquely positioned to help hospitals navigate these challenges.