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Analysis

New CFO Talks Rural Hospital Strategy, Clinical Partnerships

By Jack O'Brien  
   August 02, 2018

Morris Hospital CFO Mary Lou Tate discusses her move from HSHS St. Elizabeth to a stand-alone organization amidst widespread industry consolidation and policy changes.

The healthcare industry is still in the swing of a rapid embrace toward consolidation, impacting stand-alone hospitals that either join larger health systems or fold due to financial pressures. 

In April, Mary Lou Tate took over as CFO of Morris Hospital & Healthcare Centers in Morris, Illinois. Tate had most recently served as director of finance at Hospital Sisters Health System (HSHS) St. Elizabeth in Belleville, Illinois.

Tate spoke to HealthLeaders about her experiences on both the clinical and financial sides of health systems, as well as giving advice for how smaller hospitals can survive in today's financial landscape.

The following transcript has been lightly edited.

HL: What are some challenges that you face in the northeastern Illinois market?

Tate: In Morris we're suburban, yet we're rural. We're trying to find a good place for us because we function more as a rural hospital than as an urban hospital, yet we're in the Chicago metropolitan market. Some of the things that are difficult for us are making sure we have what works for the Chicago market, and yet [address] all of the unique issues that we have being in a rural setting.

HL: What has been the biggest change coming from St. Elizabeth's and being part of HSHS?

Tate: One of the drawbacks is [no longer] having that additional support and a built-in network of people I could call and say, 'Hey, how are you handling this?' Even having that corporate structure that can help with larger projects like bond issuances and treasury management. At a smaller hospital, we're doing all of that inside the four walls of a hospital. It's different in that there is a lot more to keep abreast at a community hospital. It's both a blessing and a curse because there is a lot more control here locally but, at the same time, you don't really have those resources.

Related: Not-for-Profit Operating Margins Continue to Decline

HL: How is Morris positioned to handle the changes coming out of both Washington D.C., and Springfield? What kind of strategies are you putting in place to ensure Morris' financial well-being going forward?

Tate: Illinois has a lot of challenges, especially with delayed payments coming from Medicaid. As a smaller facility, it can put a hamper on the cash flow for the organization. Morris has weathered that fairly well. So we're looking at our payer contracts, we're looking at our CDM pricing, and even the systems that we're using to make sure that we're well vested to make the best business decisions for the future.

HL: What is some advice you have for younger CFOs as they enter their position?

Tate: Don't be afraid to reach out to peers. I've been trying to identify other hospitals in Illinois that are like-sized and have dialogues with them of how they're handling different situations, who they're using for different vendors, and how they're dealing with the complexity of healthcare today. I'm making sure that we keep that dialogue going and identifying even the larger systems that might be able to assist us.

HL: Do you think that process can act like a stand-in for a hospital that is not part of a larger system?

Tate: I do, I think it's key. You hear nationwide [reports] of hospitals closing; it's almost weekly now. We get updates saying, 'This hospital is about to close' or 'This one's having financial concerns.' As an independent hospital, we need to work together with other independents to make sure that we all stay abreast and have the resources not only from a financial perspective, but from a quality and a patient care angle because they're all interconnected. You need to have those partnerships with your clinicians to make sure that you're providing the best care because payments are now tied to that. Having a network of other peer hospitals around you is definitely key.

Related: Despite Rural Hospital Crisis, Wyoming System Plows Ahead

HL: Are you looking at updates to your current EHR system as a way to potentially cut costs and improve revenues for Morris?

Tate: Yes, we are currently reviewing our EHR, reviewing the functionality of the system that we have now, and taking a look at whether we need to upgrade or replace. I always use the phrase that 'We're data-rich, but information-poor,' just because we don't necessarily have the systems in place to help us process all the data that we have in the EHR to make informed decisions.

HL: What are some areas of concern that you're focused on and believe other CFOs should take note of going forward?

Tate: A CFO needs to be well-versed in the operations, and I think CFOs typically stay in their office, work in the financial realm of treasury, bond marketing, and financial statements. But we really don't get into the clinical reasons of 'why?' And so I think that's one area that the industry is starting to pay attention to but hasn't necessarily moved completely in that direction yet, which is making sure that the CFO is clinically aware of what's going on and understands the why behind the numbers and not just focusing on the numbers. I also think having [a] partnership with clinicians [so the financial team] understands the clinical nature, and having the clinicians understand the financial ramifications of the decisions they're making [is a] fine dance that happens between the two [sides].

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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