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CFO Healthcare Survey 2022

Challenges facing healthcare leaders 

Deloitte’s CFO Healthcare Survey has captured the views of 44 finance leaders across Australia to understand their priorities and responses across financial sustainability, talent, capital deployment, health equity and ESG.

The COVID-19 global pandemic triggered one of the most significant
global disruptions in recent history with the health system at the forefront of
this disruption. 

The disruption and legacy impacts of the health system’s responses
to COVID-19 remain despite the Australian sector already transitioning towards
a post-COVID situation. Many health finance leaders are assessing ways to
address the removal of COVID-19 funding required to maintain operational
performance and financial sustainability in a post-COVID environment.

Short-term funding arrangements are unwinding, while many cost impacts are embedded and ongoing.
Queensland Healthcare Finance Leader

This combined with key macro-environment factors such as rising
inflation, supply chain disruptions, workforce shortages and burnout are
creating significant challenges in Australia’s health system.
<p>With 85% of CFOs planning to include capital deployment in digital technologies (virtual health, AI, analytics, automation, etc.) and 71% in core business technologies there is a clear agenda amongst CFOs for digital transformation.</p> <br> <p>Other areas where capital deployment has been prioritised are in hospital and health service infrastructure (54%) and alternate care sites (46%). However, with 93% of CFOs witnessing increased clinician shortages in medical, nursing, and allied health professions, a challenge exists to resource new facilities. </p> <br> <p><img src="/content/dam/Deloitte/au/Images/custom/accordion/au-ps-cfo-survey-graph1.jpg" alt=""></p>
<p>69% of health service providers are seeing higher than historical remuneration increases for health staff. This is one of the drivers behind 58% of CFOs expecting that operating margins in FY23 and beyond will decrease or deteriorate further.</p> <br> <p>Embedded consumable, system and process costs arising from healthcare responses to COVID-19 are applying additional pressure to their ability to maintain sustainable financial results.</p> <br> <p>In response, CFOs are envisaging some cost offsets in additional operating revenue forecasts - with 56% of CFOs anticipating revenue growth over the short to medium term. Despite this expectation, there remains challenges to addressing the removal of some short-term government remediation funding and equally challenges from privately insured and CMBS income streams.</p><br> <p>As a result of these factors, 65% CFOs identified cost containment as their number one priority and the single most important item for healthcare providers to achieve financial sustainability.</p> <br> <p><img src="/content/dam/Deloitte/au/Images/custom/accordion/au-ps-cfo-survey-graph2.jpg" alt=""></p>
<p>Health equity and ESG are firmly on the agenda across healthcare CFOs with 88% of CFOs anticipating a growing focus on increasing the provision of health equity across the system.</p> <br> <p>With an increasing amount of health organisations planning and piloting health equity initiatives, the role of the CFO is going to be critical in the process of elevating and measuring their success.</p> <br> <p>A similar theme was found with consideration for implementing ESG strategies. 46% of CFOs stated they expect their organisation to define an ESG strategy in the next 12-24 months. This is in addition to 24% of CFOs who responded that they have already defined their strategy.</p> <br> <p>Although this is on the agenda only 10% of CFOs responded that their organisation is measuring the impact of their ESG strategy.</p> <br> <p>This demonstrates there is an opportunity for CFOs to drive the maturity of strategies and initiatives across health equity and ESG.</p> <br> <p><img src="/content/dam/Deloitte/au/Images/custom/accordion/au-ps-cfo-survey-graph3.jpg" alt=""></p>
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