By Manish Singh
When it comes to spend risk, healthcare businesses face similar challenges to other industries. Employees are distributed, making purchasing decisions on behalf of their employer. Among them are individuals who might make purchases wastefully, might purchase items from the wrong suppliers, or even be involved in outright fraud. Wherever people are spending organizational dollars, there is an inherent spend risk.
Contending with these sorts of operations-related spend risks is no different for healthcare organizations than for any other enterprise. To spend money optimally, the organization must create a culture of compliance. It must breed sound decision-making and ensure a watchful eye.
Where things are different for healthcare organizations, though, is in risk related to regulatory compliance. With significant oversight into healthcare organizational dollars ensured by government legislation such as the Sunshine Act, the Foreign Corrupt Practices Act, and OFAC, U.S.-based healthcare organizations are responsible for dollars spent, with whom, and why. Additionally, healthcare organizations often have high volume spend with indirect suppliers, which introduces more opportunity for risky spending.
Whether operations-related, as in the case of fraud, misuse and waste, or through violation of regulations, spend risk comes to a healthcare organization in the form of people and their judgment calls – employees as well as indirect suppliers. The variation in decisions, which are reflected in business transactions, can have a material impact on cash leakage, fines, audit costs and reputational losses. Without sufficient quality controls to guide better spend decisions, the human variable can be an expensive one.
How do healthcare organizations take steps to ensure that they are on the right side of federal and international regulations? How do leaders in the space showcase their commitment to reductions in risk profile as it relates to fraud, misuse and waste?
The answer to both questions is: continuous monitoring.
Today, what leading organizations in healthcare are doing is pretty simple, when contrasted against the confusing patchworks of business interests, competing local, state, federal and international laws, various regulations, guidelines, mandates, acts, decrees and oversight committees.
The healthcare businesses that are managing spend risk best are adopting technology to mitigate risk. They place an AI and machine-learning platform on top of their spend activity to proactively provide a layer of advanced scrutiny to their spend, providing continuous spend risk monitoring and analysis, and ensuring near-real-time alignment with regulations.
The goal is to remove the variability that can exist in business interactions; to explain that variability; to capture it and document it; to adhere to regulations before they have ever been violated. More importantly than detecting and documenting what happened, it is the ability to understand the whys of healthcare finance and the actions an organization must take to ensure that it guides better spend decisions for an optimal state of compliance.
The reality of healthcare is that it is complicated. There is a patchwork of considerations at every level, and more scrutiny of an organization’s navigation through the business playing field than most other industries. Yet, some tools support these efforts proactively. There are ways a finance operations team can manage, in real-time, against all these risk variabilities. It is possible today to ensure that everyone in the organization maintains consistency in judgment quality; a way to ensure that people are guided in advance to make the right type of decisions and to highlight when decisions deviate from the norm, and ultimately the chance to create a culture of compliance.
Manish Singh is COO at Oversight.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.
