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3 Strategic Alerts for Financial Leaders

Karen Minich-Pourshadi, for HealthLeaders Media, May 14, 2012

CFOs already juggle a lot. In one hand they have their organization's financial plan. In the other are ever-changing government regulations that affect the bottom line. It can be hard to keep up with the constant flow of healthcare news and separate significant developments from the noise. To ease your burden, I've called out three recent reports that may impact your financial strategy, and what you can do about it.

1. Push for fee-for-value. Moody's Investors Service recently released a report instructing not-for-profit hospitals to get on the stick with fee-for-value. The Moody's report notes that credit ratings will rise and fall depending on how well hospital management teams adjust to being paid more for quality of service than for quantity.

"Different reimbursement models will develop in different stages over time, requiring hospitals to manage multiple and diverging payment models simultaneously, such as traditional payments that reimburse based on volumes and new methodologies based on cost and quality," says Moody's associate managing director Lisa Goldstein, author of the report.

The hard part is that balancing fee-for-value and fee-for-service payment models simultaneously will likely temporarily decrease a hospital or health system's bottom line. It's a risk worth taking, though—just ask the folks at Iowa Health System, who I interviewed on the necessary financial loss that comes with population health management and how healthcare organizations can try to offset it.

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