Robin Damschroder says that moving forward from healthcare's current financial challenges means a rapid redesign in the way hospitals engage with patients and employees.
Hospitals and health systems are eager to put the pandemic behind them, and while the physical devastation may be slowing, its impact, along with the labor crisis, rising expenses, and inflation are still taking its toll on healthcare providers.
Robin Damschroder, the CFO for Henry Ford Health—the Detroit-based healthcare provider with $6.8 billion in total patient revenue—is at the forefront of the fight to regain the health sector's financial stability. She recently connected with HealthLeaders to discuss these and the other challenges keeping CFOs up at night.
HealthLeaders: What was it that drew you to the CFO role for Henry Ford Health?
Robin Damschroder: I fell in love with the team and the mission of the organization. In general, health systems have similar missions, but we think more deeply here at Henry Ford. We have a mission to be part of the community, a commitment to diversity, and an effort to reduce health disparities. We're deeply embedded in our communities, and not just through the services we provide. We are involved with economic development and education around healthcare. It just depends on the needs identified and the partnerships that we have within the communities.
I would say that's the other big thing about Henry Ford culturally, partnership and collaboration is the part of who we are and how we respond. That just resonated with me strongly because I believe you never get anything done alone. And when you're talking about something as hard as social determinants of health, equity, and reducing health disparities, we're not going to do that alone. The engagement helps us attack things like infant mortality, reducing opioid use in the community, or the ability of access to behavioral health services in an online community effort. Those are not problems that any one party is going to resolve on their own.
HL: What challenges are impacting hospitals' financial well-being?
Damschroder: We've moved on and we're hopefully seeing the end of the health crisis. However, we're now starting to see the rise of the financial health crisis, and it's been a roller-coaster. In the first days of the pandemic, it was just watching your bottom line drop. We were busy getting credit lines and that kind of stuff. And then we were fortunate to get provider relief funds, and the accelerated payments from Medicare were extremely helpful. We repaid most of those accelerated payments here in September.
The labor piece has been a challenge. It's just led to the entirety of the wage base, all the way from the [lower end of the] pay scale to nursing, rising anywhere from 5% to 8% over the last three years. Experts are projecting that those costs on the wage side will continue into 2023, maybe even part of 2024.
The largest challenge is that we don't have the opportunity, the way other industries do, to pass those costs on to our customers. We're also watching a little bit of an increase on the payer side for commercial, but Medicare and Medicaid are responding with 5% increases in rates.
HL: How do organizations move forward from that?
Damschroder: It means a rapid redesign of the models that we have. As you have to pay people more, you have to create automation. There are not enough workers in the workforce right now, and that's because people are retiring, and others are choosing to go to other industries with more competitive pay. It is a perfect storm where we're being asked to do what the airline and banking industries probably had to do 20 or 30 years ago when they had their own structural financial crisis. And that's where healthcare finds itself. Healthcare has been slower at that rapid change and growth than other industries, but we're all adapting to that quickly.
HL: What strategies are you utilizing to solve these issues?
Damschroder: By implementing automation. One way is to create more ease for our patients. Think about echeck-in at the airport. Currently, when you go to the airport, you check in on your phone, you get your own bag tag and drop your bag off, and you walk through security, and unless you're having trouble, you're not talking to anyone. Some of our sites already have kiosks where you can walk in, touch a kiosk, check yourself in, and it will alert the techs you've arrived. There's usually one person floating around in the waiting room to offer help but creating ease for patients [reduces the need for some labor].
Another example of implementing automation is an app that our employees can use to pick up shifts around the system, as long as they are credentialed. So a lab tech can pick up a shift at Henry Ford Health or could go out to one of our ambulatory sites. It's a way for us to make sure our own employees get the best access first to whatever shifts we have available [before finding outside labor].
And then there is automation on the back end. For example, patients can pay bills online. We've had that option, particularly during COVID; it's had a lot of uptick. Now we have fewer people having to make calls to patients through our contact center. [Another] item would be if a patient wanted to sign on and become a Henry Ford Health patient, they can use MyChart rather than having to call and talk to somebody. In the past, that might have taken anywhere from 5 to 15 minutes depending on the situation. Now you can do it all online, and 70% of our new MyChart accounts are done online, which makes our current call centers—which have been overwhelmed—more available to do complex appointments.
HL: What should healthcare CFOs keep an eye on going into 2023?
Damschroder: Supply chain issues are still out there, even though it's improving; we all still see that it's slow. We're attentive to that. We are maintaining more inventory again, which costs more than we have done in the past.
The other challenge is interest rates. Whether we're investing in digital systems or IT systems around healthy population or consumer experience, or just for ease of care for consumers, to new facilities, the interest rates rising are concerning. I spend a lot of time talking about how that's going to impact our ability to invest.
There's also been a lot of discussion around price transparency. There's a lot of pressure—as there always has been—on reimbursement rates. Henry Ford Health system and a lot of folks rely on 340B discounts and other mechanisms like disproportionate share payments. We're a big teaching institution, so a lot of these special payments that we do in order to teach the healthcare leaders of the future or make sure that we can take care of vulnerable patients are extremely important. So that is an area that we and others are actively—in our advocacy—ensuring that these programs stay intact or evolve to a place that enhances the programs for the people that were trying to care for.
Amanda Schiavo is the Finance Editor for HealthLeaders.
Photo credit: The Henry Ford Health System/James R. Martin/Shutterstock.com