DATA, ANALYTICS & AUTOMATION for better healthcare

Unlocking Hospital Efficiency: Ease Margin Pressures with Intelligent Automation

Written By: Amit Bhagat

Six months into 2023 operating margins in hospitals and hospital systems are well below historical norms. In fact, 2022 marked the worst year for US hospitals since the pandemic, with nearly half reporting negative margins due to rising labor and non-labor costs as well as stagnant revenue.

In response, healthcare organizations are resorting to job cuts. Layoffs are surging by a staggering 97% compared to last year. But with already problematic labor shortages and rising costs, it’s time to leverage a more sustainable solution to reduce operating expenses and ensure financial resilience.

On average, leaders who proactively adopt intelligent automation as a strategic imperative achieve a significant 1-2% increase in net margin within 3-5 years. Automation makes it possible to eliminate burdensome administrative tasks liberating human capacity, unlocking administrative efficiencies, and paving the way for hospitals to emerge successfully from the red.

Here are five ways to hospital leadership can prepare their organization for a successful automation program:

  1. Embrace intelligent automation as a strategic priority
    It’s not just a buzzword—intelligent automation is essential to driving down operating expenses in the current healthcare landscape. Acknowledgment, buy-in, and prioritization are critical at the C-level and can be transformative for the entire organization. Effective communication about how intelligent automation will improve the day-to-day work of your employees and improve health outcomes for patients is compelling. Leaders should inspire a collective embrace of automation initiatives, incentivizing stakeholders with rewards tied directly to intelligent automation-driven cost savings. As adoption advances, both employees and shareholders will feel the real impact, driving forward additional efficiencies and savings.
  2. Foster a culture of accountability
    Leadership must build strong partnerships across business areas that stand to gain the most from intelligent automation. Transparent, open conversations within a governance operating model is a strategic move, especially when initiating an automated intelligence program. Regularly monitoring the value generated against targets through performance dashboards will reinforce responsibility and ensure a worthwhile return on automation investments. Additionally, ensuring all teams adopt prudent strategies, such as refraining from backfilling roles resulting from attrition or cost avoidance, can deliver substantial cost savings when paired with intelligent automation.
  3. Transform your workforce intentionally
     The value of intelligent automation cannot be fully realized without also focusing on workforce transformation. Retooling, reskilling, and redeploying your workforce is critical to unleashing the full potential of automation. Healthcare leaders must develop a detailed and robust workforce transformation plan, complete with effective communication strategies for the entire organization.
  4. Consider a Center of Excellence
    To amplify the positive economic impact of intelligent automation, think about establishing an intelligent automation Center of Excellence (CoE) to spearhead initiatives, streamline intake processes, and create reusable assets. Intelligent automation is scalable and utilizing a CoE is an efficient, cost-effective way to institutionalize best practices and maximize profitability.
  5. Collaborate with a strategic implementation partner
    Innovation requires expertise. Engaging a strategic implementation partner well-versed in intelligent automation can breathe life into your organizational vision, decrease time to value, and build a truly scalable program. As intelligent automation becomes synonymous with efficient and effective healthcare, its absence in your organization will be a non-starter for employees, patients, and shareholders alike.


1 KaufmanHall – National Hospital Flash Report – June 2023

2 KaufmanHall – National Hospital Flash Report – January 2023

3 The Challenger Report – Job Cuts Drop 49% in June 2023, Lowest Total Since October 2022; Is the Tech Purge Over?