Chief financial officers from some of the country's top hospitals and health systems meeting at HealthLeaders Media's third annual CFO Exchange shared the exciting and often frustrating adaptations they're making to accommodate healthcare reform.
For a hospital or health system CFO, there's a lot to fear in today's marketplace. Volumes are down. Governments, employers, and payers are ratcheting back reimbursement. Hospitals and health systems are becoming the focal point for disdain for many patients as more of their healthcare is being paid for out of their own pocket.
Providers face daunting information technology investments—in some cases reinvestment. They must manage sometimes contentious relationships with clinicians who have to get used to a new, more accountable way to practice medicine. Finally, consolidation threatening their jobs is the cherry on top of an unappetizing sundae.
But where there is great challenge, there is also great opportunity, and as the second and final day of HealthLeaders Media's third annual CFO Exchange wrapped up in Colorado Springs Friday, most of the CFOs in attendance sounded notes of optimism in spite of the challenges they face.
In group discussions, the event's nearly 40 participants shared with each other and HealthLeaders Media's editorial staff the exciting, arduous, and often frustrating adaptations they're making to their business models in the midst of healthcare reform.
That term in itself has become fraught with so many different meanings that it's difficult to convey how much and how quickly change is coming to the financial side of the C-suite. No longer are CFOs locked away in their ivory tower of financial analysis, devoid of context to the value of their work as it relates to actual patient care.
Indeed, they are asked to work collaboratively with groups they have infrequently collaborated in the past. From reimbursement changes to labor costs to capital projects, little is familiar anymore.
Some organizations are transitioning to taking on actuarial risk, but whether they are or not, the risk of change itself is never far from the forefront of their minds. Often, they're expected to integrate the financials of many hitherto disparate parts of the healthcare continuum into systems that have never had to manage, for example, a skilled nursing facility and its labor and capital needs.
They're wondering how best to collect from a patient population that is bearing the first-dollar cost of their healthcare expenditures as never before. They're trying to influence physician decision-making, always an exercise fraught with professional peril.
But no matter the challenge, the leaders who gathered in Colorado Springs last week aren't doing it alone. Collaborating and sharing solutions, problems and successes with their peers is more important than ever before, which, after all, is the reason why this event is so important.
A sampling of the attitude of collaboration and innovation exhibited among this year's participants can provide a snapshot of the challenges and opportunities ahead.
On taking risk:
"We think our biggest organizational risk is thinking like a hospital system. Lots of health problems are socioeconomic. If we're going to take risk, we have to go beyond the medical stuff."
– Dennis Dahlen, CFO, Banner Health
On the patient's growing role and emergence as a critical "payer" as deductibles and coinsurance makes up a greater part of each healthcare bill:
"We won't schedule an elective procedure anymore until we figure out how they will pay, and we're changing the formula for physicians so they have a vested interest in getting that collection tool into practice."—Kendall Johnson, CFO, Baton Rouge General Medical Center
On the often exorbitant cost of investment in the electronic medical record:
"The biggest miss we've had as an industry is not standardizing the EMR across the country.
—Linda Hoff, CFO, Meriter Health Services
On the debut of the health insurance exchanges:
"Payers know they will take a big haircut on exchanges as [they are] fee-for-service. That's why so many in our state decided not to participate. Because the healthy young won't join and older people will at lower price than their risk. Whoever decides to do it for market share is taking a huge gamble."
—Rich Rothberger, CFO, Scripps Health
Today's CFOs identified numerous challenges, but they're not just cataloguing those challenges—they're doing their best to implement solutions. Through this kind of information sharing, HealthLeaders is doing its best to help facilitate the transfer of knowledge in perhaps the most challenging time not only for healthcare CFOs, but for the entire healthcare system.
Healthcare is changing rapidly, and CFOs aren't standing still—they're racing to innovate.
Philip Betbeze is the senior leadership editor at HealthLeaders.