Hospitals and providers face thinner margins, shifting reimbursements and rising emergency department visits, even as coverage losses and cost controls squeeze liquidity.
As these pressures mount, healthcare systems are looking beyond traditional cost cuts and into the core of their financial operations, seeking stability through specialized banking partnerships and smarter automation.
Liquidity, Capital Under Pressure
Adam Keck, senior vice president and director of managed service solutions at Fifth Third Bank, told PYMNTS that health systems are managing “a lot of uncertainty” and that “many are running on razor-thin margins.”
He added that coverage losses are compounding the problem. “You’re going to see less preventative care visits from that population,” Keck said. “That will lead to an influx of people coming into emergency rooms.”
That shift has a direct cost impact. “There are laws around the fact that you must treat,” he said. “You’re going to increase the cost of care, and then on the back end you are getting reimbursed for those services provided, and it really now falls to the patient. You’re going to see bad debt rise.”
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In this environment, access to liquidity and specialized credit facilities has become a critical lifeline. “It comes down to really thinking about specialized liquidity and capital needs and how that impacts the cash flow of our health system clients to weather the storm,” Keck said.
Turning Payables Into Strategic Assets
Historically, the payables function has been treated as a cost center, but Keck said that with the right tools it can be turned into a profit center. Fifth Third works with healthcare clients to automate accounts payable, negotiate early-pay discounts and introduce payment tools that generate revenue while increasing visibility. Optimized payables can drive revenue streams and efficiency into the overall ecosystem of the health system, he said.
“When you start thinking about getting better visibility to invoices sooner and taking advantage of early pay discounts,” he said, three pillars — liquidity, revenue cycle and payables — are critical to financial capability.
Fifth Third’s healthcare banking practice has built solutions and partnerships around all three areas. “We have industry experts that understand those three areas and how they dynamically play together,” Keck said. “Wherever we may not have best-in-class capability, we bring in the right partnerships to give that expertise to our clients.”
For chief financial officers, resilience begins with what Keck called “fundamental blocking and tackling.” That means monitoring metrics such as denial rates, patient collection percentages and payer mix shifts, not just accounts receivable days outstanding, to spot early warning signs.
“If you’re starting to see collection time slip or AR buckets aging longer, that’s an indicator that over time you’re going to have a cash flow problem,” he said. The goal is to build action plans around those indicators and “know when to pull in that liquidity measure to really smooth out the entire process.”
Keck said every disruption in finance reverberates downstream. “Any impact here that a CFO sees or experiences has the downstream impact on the patient, which we have to keep at the center of everything we do.”
Automating the Back Office at Scale
Keck said healthcare systems gain the most from automation when they implement it “at scale, growing with you, handling disparate systems and capabilities and creating the right level of visibility across the board.”
Many providers, he said, are still relying on “homegrown solutions or even spreadsheets with really amazing macros,” which work until key staff move on. Scalable automation, he said, brings immediate payback by improving accuracy and freeing staff capacity. “When you automate back-end processes, you free capacity within your organization,” he said. “Then you can go tackle other big challenges like patient front-end engagement or denial management.”
For CFOs who have already made large technology investments but have yet to see results, Keck advised starting with change management and process evaluation before buying new software. “Once the technology’s put in place, has the right change management structure been put in place to ensure it’s being fully embraced?” he said.
He added that Fifth Third often provides modular solutions that allow clients to build gradually. “Sometimes what we have to put in place is more the fundamental blocking and tackling,” he said. Once that foundation is solid, “the huge unlock comes from the value-add analytics and additional features we can add and turn on.”
Real-Time Visibility as the Next Frontier
Keck said that “real-time visibility in healthcare is going to continue to be the name of the game.” As in banking, healthcare executives are moving toward embedded, data-driven systems that provide instantaneous insight into liquidity, investments and payables.
To make that possible, Keck urged healthcare CFOs to “think slow, act fast.” That means spending time on planning and structure before execution. “The preparation that you put in, ensuring you have the right structures ahead of starting actual hands-on integration work, is the most critical thing you can do,” he said. “Spending the time there will then pay off in much faster execution and much more quality execution.”
