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Annual Budgets or Rolling Forecasting? Healthcare Organizations Need Both

August 25, 2020

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Fewer than half of healthcare organizations rely on rolling forecasts, with most favoring annual budgets instead — but COVID-19 is changing that. Drastic reductions to hospital revenue and increased costs from the pandemic have highlighted the value of rolling forecasting, which reexamines financial information on a regular cadence to provide timely visibility into changing financials.

With 2020 budgets blown, healthcare finance leaders are scrambling to adapt planned budgets and wondering how to incorporate rolling forecasting into existing budgeting and financial planning processes. Should they discontinue annual budgeting until after COVID-19? What rolling forecasting techniques work best for healthcare? What length of time should they forecast ahead? Should rolling forecasting replace annual budgets?

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