Battling the Status Quo and Inertia in Healthcare Operations

By Vijay Ramnathan, President, MineralTree

As individuals, we all get into habits of doing things certain ways. They become ingrained into our existence, part of our own ‘status quo.’ The same is true in a lot of healthcare organizations. It might be in the types of people we hire, how we make supplier payments, or evaluate new technologies. This type of inertia can act as a guardrail or as an inhibitor. Sometimes both. 

As a guardrail, the status quo can produce highly repeatable and dependable processes. Because these processes are more established, they are less dependent on individual employees’ tribal knowledge. Decision-making is more disciplined because we require more validation points before we are willing to change things. 

As an inhibitor, the status quo keeps us stuck in old ways because they are familiar and comfortable. A business process may not be “broken,” but that does not mean it’s optimized for the current task at hand.  This is not uncommon in healthcare where compliance requirements and regulations create more resistance to change.    

Risks and Rewards

The more an organization feels it has to protect, the more it may cling to existing ways. This has less to do with size and more to do with mindset. Many organizations have been successful precisely because of their ability to adapt and move quickly. And, conversely, there are many stuck in place because they were too risk-averse. 

Organizations typically cling to the status quo for control and risk mitigation. But as has been well documented in business case studies, that does not assure success. Some get stuck in their ways and are slow to adapt to changing market dynamics. We all have examples we can point to. The highest profile ones typically involve new business models or product innovation, e.g., Apple and Blackberry, but in most cases, inertia is less obvious and unlikely to bring an organization down on its own. Instead, they are minimized ‘by a thousand cuts’ as competitors use digitization to move more quickly and efficiently to differentiate around things like telehealth, patient portals, billing, and customer service. Inertia can slowly eat away at an organization’s productivity, preventing it from capitalizing on new opportunities for efficiency and growth, and hurting employee productivity, satisfaction, retention, and recruiting.

It’s a balancing act — between change/digitization and control/risk mitigation. In many cases, change in the form of automation and digitization can actually enhance control and reduce risk. For example, when you digitize finance processes like accounts payable, healthcare organizations can automate the invoice approval workflows to increase protection against errors and fraud, while also accelerating the process and making it more efficient for staff and their suppliers.

Disruption as a Motivator

The pandemic disrupted the status quo for many organizations, healthcare included. Consider the back office. Prior to COVID, most healthcare organizations made conscious decisions about remote work, and how often they required non-patient facing staff in the office. The pandemic threw all that out and made remote work the default. And most found they could work just as effectively remotely as they could in the office. Still, many healthcare organizations are planning on requiring employees to come back to the office. Why?  Because that’s how they have always done it?

Having employees back in the office might be the right decision, but not because that’s the way you’ve always done it. What did you learn during the pandemic that can help you operate more effectively? Every organization needs to make its own decision. But they should make an informed decision based on what they learned. 

There are lots of other examples, including in our own market. Our technology helps businesses automate their accounts payable (AP) processes – digitize manual, paper-based workflows to reduce costs and increase efficiency. The pandemic was a big driver for a lot of finance teams to automate AP because of remote work requirements. Yet, in a recent survey about AP practices, we learned that 45% of respondents still use paper checks to pay their suppliers over half the time. When asked what drove their decision, 60% cited ease of use and 44% cited the cost of payment method. These responses are ironic given the high costs and considerable additional work required to use checks for AP staff. “How we’ve always done it” was cited by 38% of those making more than half of their payments via check. More status quo.

Automation and the Status Quo

Automating business processes typically challenges the status quo because it forces people and organizations to do things differently. The pandemic put a spotlight on automation because a lot of manual processes became difficult to manage in remote work environments. But the reality is, a lot of organizations would have benefited from automation without the pandemic.

Too often we keep doing what we’re already doing until the business pain dictates a change. For example, your manual finance and accounting systems might work well today, but will they meet your needs if your organization continues to grow? Take the opportunity now to lay the foundation for the future and set your organization up for success down the road. Delaying those improvements now might really slow your progress later. 

About the Author

Vijay Ramnathan is the president of MineralTree, a company specializing in AP and payment automation for middle-market and enterprise-level companies. A self-professed fintech and payments geek, Vijay has spent over 20 years in the space including strategic leadership and operational roles at companies including US Bank, Fifth Third Bank, and COMDATA/Fleetcor.