Three health system CFOs presented how their organizations stepped up to the challenges and opportunities related to the pandemic.
HealthLeaders recently hosted the CFO Ideas Exchange to present three approaches to financial strategy amid the ongoing COVID-19 outbreak.
The event, sponsored by Optum, featured presentations from three HealthLeaders Exchange member CFOs, including Robert Flannery, senior vice president and CFO at UW Health, Bernadette Spong, CFO at Orlando Health, and Chris Pass is CFO at John Muir Health.
Below are highlights from their respective presentations on the challenges and opportunities related to the pandemic.
COVID financial strategies and workstreams
At UW Health, Flannery said the system based in Madison, Wisconsin established a COVID-19 Impact and Response Planning (C-19 IRP) Leadership Team to oversee the coordinated decisions and workstreams.
For the finance leadership, Flannery said UW had four workstreams: financial projections/modeling, liquidity/banking, government and other agency reimbursement, as well as operating margin improvement.
Financial projections provided flexible modeling of "various scenarios," updated the senior leadership at regular intervals, and informed the budget process for fiscal year 2021.
Liquidity and banking were led by the organization's treasury division and maintained a "rolling 90‐day cash projection."
An important element to the liquidity crunch caused by COVID-19's effects on the capital markets was securing appropriate lines of credit and advanced Medicare payments. Additionally, Flannery said it was crucial to monitor the interest rate environment and "determine if any opportunistic refinancing exist."
Similarly, UW approached the government reimbursement workstream looking for any federal or state funds to reimburse for COVID expenses, reviewing terms for adequate compliance, and assuring the information is "gathered in a way to simplify reporting."
Finally, operating margin improvement was informed by modeling to "determine what levers/opportunities exist to minimize damage."
Right people, place, time, and price
Orlando Health sought to improve its labor productivity program during the pandemic, according to Spong, the organization's CFO.
"The goals and initiatives of the Labor Management program and the Corporate CSO should be based on and aligned with the goals and expectations for the organization," she said.
The bedrock of Orlando Health's approach was budget and roster maintenance, managing staffing to demand, and managing expenses related to premium pay as well as avoidable labor expenses.
Reflecting on the system's Labor Management program, Spong detailed what Orlando Health wanted its leaders to focus on:
- "Provide leaders with information to help them budget appropriately"
- "Help leaders understand what their roster needs to be and help them get it right"
- "Help leaders understand their departmental workload and shape it accordingly"
- "Help leaders determine their optimal schedule for workload and agility"
- "Help leaders hone their skills at managing staffing to demand effectively"
CFO recovery strategies during COVID
At John Muir Health, an integrated nonprofit health system based in Walnut Creek, California, Pass said there was an outline to the recovery effort put into place during the pandemic: define, communicate, work, and view the recovery as "not a destination but a process."
In the short-term, Pass said John Muir Health sought to bring its business back online and build confidence in patients to seek care. This took place by opening access to patient services that included both virtual and in-person care.
Another short-term business focus was to understand that the impact of 2020 would not be permanent and aim to preserve jobs. Long-term, Pass said his system is refreshing its strategic plan and resetting its organizational focus.
Like many other healthcare organizations, John Muir Health is relying on dynamic budgeting to "address timing and impacts of the unknown," along with quarterly business reviews and forecasting.
His advice to other CFOs involves three components: lead with the voice of the CFO, communicate and take advantage of opportunities to engage, and lean in to show the organization "you have their back."
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.