Top 6 Financial Game Changers for Hospitals
The past year proved to be a very busy one for healthcare financial leaders. More than a few stories kept everyone abuzz wondering how new laws and mandates would affect their organizations' bottom line. So much happened this year, in fact, that it was challenging for me to decide which areas affected financial leaders most in 2010 and which will continue to affect them in 2011. Here’s a look at my top six choices for financial game-changers:
- Healthcare Reform. For years to come healthcare reform will sit atop everyone’s list of game-changers for the industry. For several years hospital administrators won’t know the full extent the legislation will have on their bottom line. What financial leaders do know is that they will likely have more patients coming through their doors, though they will also likely not have enough physicians to meet the demand.
Then again, others in healthcare argue that reform may just be the bottom line boost of which CFOs dream. Though reductions in Medicare are anticipated, they may be offset by an influx of self-paying patients. While government payments to hospitals that take a disproportionate number of uninsured, low-income patients will be cut, there will be less of these types of patients—so less charity care.
- Cost Cutting. Let’s face it, the economic recession has been very painful for healthcare, not just for the banking industry. This year found CFOs really digging in to find the areas they needed to cut. The goal was not to lay off any more members of their staff in 2010 (kudos to most hospitals for succeeding at that). Financial leaders took up the torch for many cost cutting initiatives ranging from predictive modeling to automating their supply chains. One healthcare leader went so far as to shave his head when his hospital employees helped the organization cut $7 million in costs. Financial leaders got creative and frugal, then just when the government declared the economic recession officially finished, CFOs were hit with another blow: reimbursement cuts.