Five Solutions to Transform Outpatient Growth into Margin

Hospital and health system CFOs are facing one of the most challenging financial environments in decades. And according to HFMA’s CFO of the Future survey, they know it.

In response to the survey, 39% of CFOs said their biggest challenge is positioning their organization for success through transformation, while 31% cited responsibility for the financial health of the organization. Juggling an ever-increasing workload (21%) and strained payor-provider dynamics were also cited as ongoing obstacles.

These pressures are intensified by:

• Rising patient responsibility (now accounting for >30% of system revenue)
• Growing outpatient volumes that strain legacy RCM processes
• Persistent denials, write-offs, and bad debt
• Limited capital budgets and workforce shortages
• The expectation to deliver margin improvement while preparing for future transformation

So how can CFOs navigate this complexity and protect operating margin? Insights shared by XiFin executives in the HFMA Revenue Cycle Workshop webinar highlight five key solutions that leading health systems are implementing, addressing some of the challenges identified by CFOs in HFMA’s survey. We’ve excerpted:

1. Reframe Outpatient Strategy as Margin Strategy

Margins are under intense pressure, and outpatient misalignment can turn a thin positive margin into a negative one. According to Harly Ross, XiFin CCO, operating margins are so thin that if your outpatient and ancillary strategy is off, you risk driving your entire health system into a negative margin.

Organizations, however, are struggling to ensure their key strategies help protect their margins. In fact, survey respondents overwhelmingly named “transformation readiness” as their top challenge, and reframing outpatient strategy as a margin initiative is key to ensuring transformation efforts deliver measurable ROI.

2. Treat Patients as Your Largest Payor

Patient financial responsibility now accounts for a third of system revenue—and is rising. Lack of cost transparency and poor financial experience are leading drivers of bad debt. In the Revenue Cycle Workshop, Lynnae Riggio, XiFin AVP of RCM, noted that more and more payors are shifting money to patient responsibility. Surprise bills and lack of upfront estimates undermine trust and lead to bad debt.

CFO are aware of these pressures, with survey respondents repeatedly flagging patient affordability and payor complexity as top concerns, noting that systemic process gaps create consumer frustration and delay payment. But there are ways to mitigate these dynamics.

3. Close Revenue Leaks by Reducing Avoidable Denials

Preventable denials—from missed prior authorizations to incorrect benefit verification—represent pure revenue leakage and higher cost-to-collect. When prior auth isn’t secured, you not only frustrate the patient—you don’t get paid. Further, many CFOs described the payor relationship as a “zero-sum environment,” where denials drive margin loss. The answer: CFOs must invest in process changes and technology that reduce denials and shorten A/R cycles.

4. Leverage Automation to Scale Without Adding FTEs

Staffing shortages and rising labor costs make it unsustainable to throw people at revenue cycle problems. Leveraging automation for prior authorization, insurance discovery, and denial management is no longer optional. These tools reduce manual burden and mitigate revenue leakage.

And CFOs are ready. Survey respondents highlighted technology enablement and process improvement as critical to success. Automation is how finance leaders scale RCM operations and reallocate staff to higher-value tasks.

5. Invest in Analytics to Drive Data-Backed Decisions

Financial discipline—and strategy—are inherently data-driven. Without visibility into service-line performance, payor behavior, and clean claim rates, however, CFOs are operating in the dark. Without granular analytics, how do you know how radiology, outreach lab, or DME are performing? Analytics allow you to prove ROI and prioritize investments.

Furthermore, respondents repeatedly emphasized the need for improved analytics and real-time data visibility to measure success and justify capital investments, a cornerstone of margin protection strategies.

The Bottom Line

CFOs are being asked to transform their organizations, not just maintain them. The good news is that solutions exist today — from automation and analytics to patient financial engagement tools — that can help you reduce denials, protect margins, and position your organization for sustainable growth.

In our next article, we will surface exclusive strategies and insights from your peers in managing the ancillary and ambulatory revenue cycle.

Watch the full on-demand webinar now to hear all the insights from the panel, see real-world examples, and learn how to turn outpatient growth into measurable margin improvement. The CFO of the Future report is available through HFMA.