At a glance
The role of accounting within healthcare is an important and specialised area. This is especially the case given it is subject to strict government regulations and financial decisions in the sector can have a big impact on people’s lives.
Importantly, healthcare sector businesses look to employ accountants that can marry the right behavioural traits with superior technical skills. In addition to technical proficiency, the ability to fit into the team and do the job is what employers want. This is the same no matter whether the accountant is working in a hospital, nursing home or another area within health.
“Ninety per cent of jobs are not so much about knowledge of health as they are about knowing how the organisation reports performance. But cost accountants do need to be able to apply standard costing procedures for components of medicine so they can build an accurate cost of goods and services,” says Andrew Brushfield, a director of recruitment firm Robert Half.
Healthcare businesses are also looking for accountants who are passionate about the sector. Importantly, accountants need to understand how government funding works in the public system and how insurance works in private sector healthcare.
As Geoff Balmer, co-founder of Richard Lloyd recruitment notes, “if you work in a hospital you need to understand the cost of procedures like knee replacements, although this is more necessary in analytical roles. In aged care you need to understand the rebate models.”
The pain points
One of the challenges facing new accountants in the health sector is prior industry knowledge. According to David Cawley, the Sydney-based regional director of Hays Accountancy and Finance, job candidates who lack prior health sector experience may struggle at first with the terminology used and the dynamics of the health sector. But how much health industry knowledge accountants require depends very much on their role.
However, it appears there’s demand for accountants that do have sector-specific experience in health. For instance, a current drive to centralise hospital billings has revealed there’s a huge shortfall of people skilled in this area. Accordingly, salary expectations have risen considerably for these positions.
Cawley says there is also a shortfall of private patient liaison officers who encourage people to use their private health insurance so the hospital can generate maximum amounts of revenue.
Understand big data
Health is one of the industries where “big data” – the analysis of large amounts of digital information to identify industry and other trends – has plenty to offer businesses.
Accountants need to be front and centre in health businesses when it comes to developing systems that collect and examine information, and in using this information to build better health businesses.
Cawley says how much knowledge accountants are required to have in this area depends on how senior the role is.
“Someone sitting in a government shared service, reconciling accounts data, may need to work with Excel spreadsheets with tens of thousands of lines. To do this they need a strong understanding of advanced Excel functions such as Pivot, VLOOKUP and perhaps some macros.
“They also need to be able to define reporting parameters according to user needs and extract and manipulate from the ERP system.”
Commit to risk management and compliance
Exceptional risk management and commitment to compliance are also paramount for healthcare sector accountants.
There are substantial legal and compliance issues in this sector and it’s often the finance department, working alongside the legal department, that’s responsible for ensuring health businesses remain inside the law.
It’s also the accountant’s role to ensure the business responds to any regulatory changes, especially those with financial impacts. A good example is the recent sweeping reform in how patients pay for aged care services.
Bone up on your technical skills
Previous experience in organisations with complex business structures is very useful when moving to a finance role within healthcare, as it gives a candidate exposure to multiple division reporting structures and budget allocations.
“For not-for-profit healthcare providers, experience with government funding allocation and commercial revenue streams is important,” says Cawley.
In terms of specific accounting software packages, he points out most of the public health system in New South Wales uses Oracle for all accounts, patient billing revenue collection and patient health care records.
“NSW Health is moving to have all medical records available for patients online to speed up the ability for a patient to access information between different healthcare providers. NSW Health is also doing an Australian pilot implementation of a new rostering system. This is a massive undertaking when you consider it runs one of the biggest payroll shared services in the southern hemisphere.”
The private health system uses a variety of software depending on the size of the organisation, including SAP, MidTech, Totalcare, Kronos, chris21 and Dynamics. Small medical clinics might run on a basic MYOB or QuickBooks solution.
There’s no doubt there are plenty of opportunities in health for accountants. This will only increase as Australia’s population ages and the demand for healthcare grows.