Budgeting is at the top of every business and healthcare executive’s mind right now. With the residual effects of the pandemic’s public health crisis, looming recession fears, and inflation driving up the costs of necessary supplies, proper budgeting and strategic planning is more critical than ever. It’s even more urgent for behavioral health and human services organizations, which already operate with particularly tight budgets and high levels of demand.
What’s more, these agencies need to prioritize patient care rather than cash flow. It’s easier for traditional for-profit businesses to cut costs, increase output, or raise prices to balance their annual budget. Healthcare systems, on the other hand, often have limited opportunities to increase funding and can’t rush or compromise on service delivery to patients in order to save money or increase productivity.
In ContinuumCloud’s 2022 Executive Trends Report, behavioral healthcare leaders expressed that financial sustainability was a top concern. Proper healthcare budgeting can allow such organizations to remain financially sustainable by helping healthcare leaders plan expenditures and properly allocate the funds they do have.
Let’s delve into how behavioral healthcare organizations can improve the budget planning process and enhance methodologies for overall financial management.
The Importance of Healthcare Budgeting in Behavioral Health
The demand for behavioral health services continues to grow while budgets remain limited. This places a large burden on providers who must allocate their resources carefully to stretch their budgets as far as possible to care for as many patients as they can.
The behavioral healthcare industry has also been experiencing significant staffing shortages due to the increased demand that formed during the pandemic and the high burnout rates among industry workers. These staffing difficulties can further strain budgets as behavioral healthcare facilities may need to allocate additional funds for temporary help like travel nurses, recruiting expenses, and other costs (such as training) associated with turnover.
Many human services providers rely on government funding or grants to provide services to clients and need to carefully budget those funds for the fiscal year. Others rely on insurance reimbursements as their primary revenue source even though reimbursement rates are generally lower for behavioral health providers than other medical specialties. Regardless of the business model, behavioral health and human services organizations have to work harder than standard for-profit businesses or even other medical providers to carefully manage budgets.
How to Improve Budgeting for Health Care
Managing the healthcare budgeting process on your own is a time-consuming and complex process. Fortunately, there are tools like ContinuumCloud’s human capital management platform that can help you more easily track your costs and plan your budget.
Track Labor Costs in Real-Time With Position Control
Labor costs are often one of the largest expenses for behavioral health and human services. As such, it’s vital for these organizations to have access to tools like Position Control and real-time reporting (both included in ContinuumCloud’s HCM) to carefully manage labor spending and stay on financial track.
Most human capital management systems are employee-based, which can make healthcare budgeting difficult due to the fluidity of the behavioral health workforce. Behavioral healthcare facilities often have very high turnover along with higher rates of internal transfer than most businesses. Tracking labor costs accurately gets even more complicated when employees split their time between different departments or programs within the company. This can all make it challenging to track the labor budget at any given moment.
Position Control eliminates this challenge by using a position-based system to give leaders a clear view of their workforce and total cost by position, department, or program. It's easy to pull reports and metrics on the labor costs associated with each of these characteristics for detailed up-to-date budget reporting. Position Control can even account for unfilled positions when forecasting and tracking your labor budget.
Position Control also allows healthcare leaders to easily compare budgeted versus actual costs in real time. This real-time data helps organizations stay on budget and can aid in day-to-day decision-making. For example, managers can check in on the daily or weekly labor spending before approving overtime.
Position Control can also help organizations make hiring decisions that fit financial benchmarks. For instance, one common problem in behavioral health is overhiring. With employees continually coming and going or transferring to different departments, it can be easy to accidentally overhire. There may also be open positions that the organization must wait to fill due to budget challenges.
Position Control can prevent overhiring by ensuring that only approved positions are filled. Organizations can set up an approval workflow in the system so that the position must be approved to be filled by finance or another assigned stakeholder. A salary range can also be assigned and approved for each position to ensure that everyone stays within the budget for the role. Organizations can also review daily lost revenue reports to identify which vacant positions should be prioritized in recruiting efforts.
Utilize Revenue Cycle Management
In addition to tracking labor spending, healthcare executives also have to keep track of incoming cash flow. For many behavioral health organizations, the bulk of their revenue comes from health insurance reimbursements. These reimbursements come from insurance payers like Medicare and are based on the services provided to patients.
Unfortunately, it isn’t always easy for organizations to collect the reimbursements that they are owed. Behavioral health organizations often have to deal with claim denials from insurers, which can result in lost revenue if not appealed. That’s why tracking these reimbursements closely and appealing whenever necessary is a crucial aspect of healthcare budgeting.
Behavioral health leaders can leverage revenue cycle management tools like ContinuumCloud’s electronic health record (EHR) software to keep track of claims and automate the billing workflow to reduce errors and save time. Organizations can set up billing rules and configure their own billing processes to ensure that claims are submitted properly to lessen the likelihood of denials.
The billing dashboard on ContinuumCloud’s EHR allows administrators to quickly check the status of claims and address any denials or other billing issues. This supports the healthcare budgeting process by ensuring that all projected revenue is received in a timely manner.
ContinuumCloud’s EHR can also be used to track insurance processing times, claim denial rates, and compare operational costs to billed charges. This makes financial planning easier and allows organizations to accurately track and adjust their operating budget.
Optimize Healthcare Budgeting With ContinuumCloud
Behavioral health and human services organizations operate with tight budgets while working to meet high demands. These organizations need the right tools to obtain better visibility around their workforce and budget cycle.
ContinuumCloud’s HCM platform is the only human capital management solution built with the budgeting needs and challenges of behavioral health and human services organizations in mind. Our HCM system is built with Position Control for better healthcare budgeting, labor allocations, and reporting.
What’s more, behavioral health businesses can also use ContinuumCloud’s EHR software for revenue cycle management to improve claim management workflows and more accurately track operating costs.
Contact us today to learn how ContinuumCloud can help your company improve its healthcare budgeting.