Two major strategies are at the forefront of one CFO's 2024 financial planning.
Hospital and health system CFOs are finally seeing some financial relief as revenue increases offset rising expenses and operating margins stabilize, but 2023 was far from easy.
This means CFOs need to step up their 2024 planning to ensure financial stability, and on top of streamlining its revenue cycle, Dave Mazurkiewicz, EVP and CFO of McLaren Health Care, will be doing this by prioritizing its supply chain cost containment and the organization’s overall growth.
Read on to hear how Mazurkiewicz will be achieving these two tasks.
Supply chain cost containment
On the supply chain side, McLaren is tightening up its vendor processes with vendor management initiatives, Mazurkiewicz says.
“For example, we want more complete compliance with our registration policies when representatives come on our property to call on our physicians. We want reps to negotiate with our purchasing colleagues directly and not distract our physicians or take time away from patient care,” he says.
“We make commitments to our suppliers that we fully honor, so we’re ensuring they honor their commitments to us, too.”
McLaren will also dedicate more resources to focusing on contract management value analysis.
There’s a flood of new medical devices and implants coming to market to try to replace some of the revenue suppliers lost when elective surgeries disappeared during the pandemic, he says, and these new products are not necessarily coming to market because they are a great value.
That means in 2024, McLaren will be doing a value analysis on patient and economic benefit every time it considers switching a preferred product.
“No hospital can do a procedure with a loss; that math doesn’t work,” Mazurkiewicz says.
McLaren’s other focus for 2024 is on growth.
“We continue to expand our digital solutions to make it easier for patients to access our services. We want people to choose us for our quality but also for ease of access. We’re putting extra effort into understanding the patient’s preference and what they consider ‘easy,’” he says.
Many patients now want to be able to schedule appointments from their phone at a time that’s convenient for them, so Mazurkiewicz says, McLaren must make sure it has the tools for patients to do that easily.
Another initiative McLaren is expanding in 2024 to fuel growth is the continued build out of its data warehouse, which Mazurkiewicz says is “our single source of truth.”
“As an example, we now know our margin for each MS-DRG—whether it takes place on the inpatient or outpatient side—by hospital, by physician, and by patient. This is critically important when evaluating the financial impact of our decisions, on which our growth depends.”
“No hospital can do a procedure with a loss; that math doesn’t work.”
Dave Mazurkiewicz, EVP and CFO of McLaren Health Care
Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.