Five Key Strategies to Strengthen Healthcare Budget Resilience

By MacKenzie Gonnelly

While healthcare organizations are eager to participate in advancing technology solutions, HIT executives are prioritizing budget optimization in response to administration budget cuts and associated funding changes.

Managing limited resources was a major discussion point among healthcare leaders during a recent CHIME Foundation virtual session: Budget Challenges and Priorities. We’ve highlighted key session takeaways for optimizing outcomes under budget constraints, starting with organization-wide financial collaboration.

1. Prioritize a collaborative budgeting environment.
   Budgeting in healthcare is no longer siloed. It requires a combination of operational leadership, clinical expertise, and strategic vision, achieved through cross-departmental collaboration. To ensure budget effectiveness, HIT leaders should aim for centralized spending with decentralized input. For example, the CIO team should manage the overall IT budget, but a variety of departments must contribute insight into workflows, customization and training needs, and support priorities to ensure technology investments meet operational demands. Key voices must include nurses, physicians, operations, HR, revenue cycle management, and more.
   
   
2. Begin planning early to allow for more strategic decision making.
   By starting the budgeting process early, healthcare organizations are better equipped to plan for contingencies and navigate the unpredictability of the healthcare industry. The first step is to establish a comprehensive financial road map that outlines projected revenue, expenses, and potential funding gaps. This allows leaders to determine the feasibility of strategic initiatives and allocate resources effectively.
   
   A proven best practice recommendation is to begin financial forecasting five years out to create a long-term strategic vision. Additionally, healthcare organizations should evaluate key systems at least two years out to account for vendor selection, implementation, and high cost. This proactive approach not only supports financial resilience but also creates the flexibility needed to respond to evolving clinical, regulatory, and market demands.
   
   
3. Consider leveraging workforce partnerships to achieve cost-effective innovation.
   When profits are under pressure, healthcare organizations must get creative to diversify their services, revenue streams, and care models to remain successful. This includes developing strategies that maximize ROI throughout IT initiatives or vendor partnership agreements. With approximately 50% of an IT department's budget typically allocated to staffing, the remaining half must be carefully distributed across maintaining existing systems, supporting day-to-day operations, and investing in innovation.
   
   To make the most of limited resources, it's essential to clearly differentiate between "must-haves" and "nice-to-haves." Once determined, trusted workforce partnerships are an excellent way to achieve a resource balance. These partnerships allow health systems to reduce the burden of support and maintenance costs to free up budget that can be redirected toward transformative initiatives.
   
   
4. Prepare for continued financial uncertainties.
   Amid persistent government cuts, labor shortages, and increasing costs, healthcare will continue to experience financial uncertainty for the foreseeable future. With inflation increasing and reimbursement rates declining, healthcare leadership must prepare for potential financial loss. As a result, many providers may shift focus toward profitable service lines — such as surgery and multi-specialty care — to help subsidize mission-driven or less profitable areas like primary care or behavioral health.
   
   Healthcare organizations should optimize their EHRs to facilitate accurate coding by multi-specialty provider, training such providers on proper documentation procedures for RCM alignment. If clinical documentation, prior authorization, insurance verification, or proper coding is lacking or missing, claim denials rise (or sit in purgatory without payment). Ensure clinical care is effectively documented and coded to its highest applicable level, maximizing accurate payout possibility.
   
   In this financially constrained environment, IT investments must be held to a higher standard. Only solutions that deliver measurable, hard ROI should be considered. To ensure sound decision-making, healthcare leaders must apply financial models like Net Present Value (NPV) to evaluate the long-term benefit of any technology investment, prioritizing those that drive efficiency, reduce costs, and directly support clinical or operational outcomes.
   
   
5. Shift expectations for C-Suite leadership roles.
   Today's C-Suite leaders must expand their traditional role to think as collaborators and strategists. A CFO is no longer solely responsible for the numbers. They must also have a deep understanding of operations to inform smarter financial decisions. Similarly, a CIO must move beyond technical expertise to clearly communicate how technological investments drive both clinical performance and financial outcomes. Ultimately, strong alignment is essential between IT and finance as the CIO champions and enables critical initiatives while the CFO approves and funds them.
   
   

By combining these five key strategies for optimizing healthcare budgets amid resource constraints, HIT leaders can strategically balance daily operations, maintenance and continued innovations to align with patient care priorities and financial objectives.

Contact Stoltenberg Consulting today to learn about our Healthcare Revenue Cycle Consulting and strengthen your budget resilience.

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