CFO Exchange: Weighing Expenses Against Quality Mandates

Last month, Arndt continued, Donald Berwick, MD, head of the Centers for Medicare & Medicaid Services, visited La Crosse to get examples of ways hospitals are reducing costs to benefit CMS, the kinds of programs hospitals would be doing more of if "there weren't perverse disincentives," Arndt said.

Arndt described the care coordination program and asked Berwick, "How much more of this can we afford to do before it becomes really financially stupid?"

Arndt said Berwick thanked him for the $18 million. "And I said, you know, if you would just make it financially neutral for us to do more of [these kinds of programs], there's more of those $18 millions" that would accrue to CMS, Arndt added.

Hospital and healthcare system CFOs convened in small groups at the CFO Exchange to discuss the importance of investing in value-based purchasing improvements, in order to take advantage of financial incentives that CMS will reward to hospitals providing higher-quality care.

One hurdle for value-based purchasing is getting nursing staff and other employees to understand its importance. "They're not concerned about what we get paid," said Charlie Hall, executive vice president and CFO of Piedmont Healthcare in Atlanta. Senior management can try to influence behavior with bonuses and other incentives, but "money is not an issue with nurses. They're concerned about care, appropriately so," he said.

Ann Pumpian, senior vice president & CFO with Sharp Healthcare in San Diego, and James J. Moylan, vice president of finance & CFO of Griffin Hospital in Derby, CT, said that while value-based purchasing is important – since the public will be able to see and compare hospitals’ scores – CFOs can only do so much.

And after that, Pumpian said, "you move on to the next fire, because there are plenty of fires to go to."