​Healthcare Industry Expenses Management Costs Worst of Any Major Industry

New research shows 61% of Healthcare CFOs admit it is difficult to keep track of expenses expenditure

  • $1,427,841 average annual costs for managing business expenses for health care businesses with +500 employees vs an average of $1,075,500 for all industries
  • Almost 40% of health care business do not believe that their banks offer them with the payment options they need
  • 61% of healthcare businesses admit that their current expenses methods make it difficult to keep track of expenditure vs an industry average of just 38%
  • 30% admit that they do not have adequate oversight and control over business expenses.

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Manchester, UK, 28th April 2016Conferma has issued exclusive new research demonstrating that the average large US healthcare business is paying over $1.4m in managing their corporate expense compared to a national average of just over $1m for all businesses. Research for the leading Virtual Card Numbers providers, carried out by Opinion Matters, is able to reveal that the multiple inefficiencies in how big US business manage expenses is proving a significant hit on their bottom lines.

Simon Barker, CEO of Conferma, explained: “The healthcare industry is one that generates a great deal of expenses. Sales people have to travel coast-to-coast meetings with potential buyers and this means that they have to make business related purchases on the go. What is surprising is that an industry where expenses play such an important role in day-to-day business life seems to have so many problems controlling them.”

Across all industries there is an average of 328 staff authorised to make purchases. For the healthcare industry that number is just 198. And yet costs and concerns are far greater than in industries where more staff are authorised to make payments.

Simon Barker: It would be logical to assume that the more staff authorised to make payments, the more complex and costly the systems would be. Yet if you take IT and Telecoms, for example, in the companies we spoke to, an average 574 employees are authorised to make purchases. However, the cost for their expenses management is just under $1.2m. Three times as many authorised staff and an average bill of $200,000 less than healthcare. Clearly something is going wrong in this industry.”

The research also demonstrates that Chief Financial Officers in the healthcare industry are clearly concerned about the current expenses environment. 61% of those surveyed admitted that current expenses methods made it difficult to keep track of expenses compared to an industry average of 38%, a 60.5% increase.

All of this adds up to almost one-in-three (30%) of Chief Financial Officers of healthcare firms believing that they do not have adequate oversight and control over business expenses. Compared to a cross industry average of only 7.5%

Simon Barker: “The big question surely must be ‘why?’ Why is the healthcare industry performing so badly? One possible clue could be a question we asked about whether banks provided the payment options and flexibility that CFOs were looking for. Across all industries, 71% said yes. Yet for the healthcare industry, this is ten percentage points lower at 61%. So it could be time for healthcare CFOs and their banks to sit down and start talking seriously about how to best serve their needs.

“The healthcare industry wants to be number one in terms of service, innovation and product. Not in terms of inefficiency and waste. These stark figures must surely serve as a wake-up call.”

The research for Conferma was carried out between: 03/11/ 2016 and 03/18/2016 by Opinion Matters. The sample size was 250 Chief Financial Officers in company sizes of 500+ in the US.

More on the topic from:

Healthcare Finance News

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