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5 Hospital Finance Questions to Ask Right Now

Karen Minich-Pourshadi, for HealthLeaders Media, December 27, 2010

Late December is the time of year when we look at ahead with anticipation at what the future holds. With only days left in 2010, financial leaders will be shifting their thoughts back to financial forecasts. To help guide the planning, I checked in with two seasoned healthcare CFOs to get their insights on what 2011 may hold. These are five questions to which every CFO should have an answer.

1. What is one issue that you believe will influence your hospital/health system in 2011?
Physician shortage: "People have talked for years about the primary care physician shortage… there's a lot of talking but not much is done about it. There are a large number of people hitting Medicare age and there are fewer physicians who are taking new Medicare patients. There doesn't seem to be any solution on the horizon."–Jeff Rooney, senior vice president and interim CFO at 430-bed St. Agnes Medical Center in Fresno, CA.

EHR and Reimbursement:
"Health reform is going to impact hospitals from a couple of different perspectives: the requirement to implement EHR and how it affects reimbursements. If you don't implement an EHR and you can't demonstrate meaningful use then your reimbursement will be potentially negative. This is the number one issue that will kick in in 2011. Though you have several years to demonstrate [meaningful use], if you don't get going in 2011 it will be difficult to meet the requirement in time."–John Ortiz, partner at Tatum LLC, a Atlanta-based executive services firm, and the former director of management services at Sisters of Charity Health System in Cleveland, OH.

2. What do you anticipate will have the greatest effect on hospital's margins, and why?
Accountable Care Organizations: "The financial pressures over the years have only increased and the margins have only become thinner. The margins on outpatient services are larger than on inpatient. The whole ACO model is where doctors and hospitals … will take a more comprehensive look at the [financial] pie—it's not the doctor's pie and the hospital's pie with different margins, now there will be one pie to divide."–Rooney

Meaningful Use: "Reimbursements are going to be reduced for hospitals if they don't effectively implement EHRs, and demonstrating meaningful use is extremely costly… so the ability to actually incur that cost as well as the possible downside impact if don't implement their EHR well could be a double whammy. It's one of the reasons you'll all see more independent hospitals looking for partnerships, alliances and acquisitions."–Ortiz

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