Three healthcare finance executives reflect on the pandemic and look ahead to changing industry dynamics.
Just over a year after COVID-19 spread across the U.S. and caused an unprecedented strain on the financial standing of healthcare organizations, finance executives are looking to the future with a new perspective and appreciation.
HealthLeaders hosted its third Healthcare Finance NOW Summit Wednesday, which featured sessions where senior healthcare leaders discussed the lessons learned in the coronavirus era and how their respective organizations have handled the acute financial pressures created by the ongoing uncertainty. The event was sponsored by RevSpring, Inc.
The virtual event kicked off with an opening keynote from Mitch Perry, CFO at Blue Cross and Blue Shield of North Carolina (Blue Cross NC). A mid-day presentation followed, from two executives at Priority Health, Mary Anne Jones, senior vice president of finance and operations, and Jian Yu, senior vice president of advanced analytics and chief actuary. The summit concluded with a presentation from Christina Severin, CEO of Community Care Cooperative (C3), a federally qualified health center (FQHC)-owned ACO based in Boston.
Below are three takeaways from these sessions.
How COVID-19 is reshaping financial management
For Blue Cross NC, like many other healthcare organizations, the pandemic was a surprise, but the company was not unprepared, according to Perry.
He said that prior to the outbreak, Blue Cross NC had performed an annual pandemic scenario stress test on its capital adequacy levels based on the impact of the Spanish flu pandemic a century earlier.
In the early phases of the crisis, Perry said that Blue Cross NC focused on its liquidity position and took a cash-forward, conservative investment approach temporarily suspending reinvestment of dividends and interest, while also activating and increasing its lines of credit.
While it was an uncertain time for payers like Blue Cross NC, Perry noted that providers also faced grim financial prospects due to the halt of elective procedures, so the organization stepped in to offer support to its counterparts in North Carolina.
Such actions included reducing the administrative burden around certain prior authorizations and copays while also changing the claims payment process to fast-track provider payments.
“I think one of the positive outcomes of the pandemic was largely due to the partnership we had with providers. It allowed us to continue our movement, even accelerating it, to value-based care,” Perry said.
Reflecting on the business strategies borne out of the past year, Perry said executives should not underestimate the value of preparedness and organizational trust amid a crisis.
“The first lesson is being prepared. There’s a benefit to having a strong business continuity plan, to have robust scenario modeling, and timely access to high-quality trusted data,” Perry said. “Speaking of trust, the second lesson is that the pandemic highlighted the importance of trust in partnerships, trust of our customers, and trust of the broader healthcare community. This allowed us to be a leader during this period. Trust amongst the executive leaders was important; we were all moving fast and so it was crucial to be able to focus on building that trust so that we could move fast together during the crisis.”
Planning amid COVID-19 and industry uncertainty
Priority Health is a health plan subsidiary of Spectrum Health, an integrated health system based in Grand Rapids, Michigan.
Like Blue Cross NC, the pandemic prompted Priority Health to assist its struggling provider partners by collaborating on automation, with goals of cutting administrative costs and shifting focus to quality.
According to Jones, the organization’s senior vice president of finance and operations, Priority Health started ‘gold carding’ in its value-based arrangements. This is an approach to bypass authorization levels if the correct medical decision-making is agreed upon at the beginning by the patient and physician and then embedded into the Epic medical records program.
She added that Priority Health’s audit work on the backend regarding claims and appeals is supported by the feedback received from colleagues at Spectrum.
“It's nice being part of an integrated health system where we have [those] within the organization who share feedback with us directly in terms of where some of the challenges and frustrations are,” Jones said. “We work to identify ways to bring down those barriers, and certainly do the same with our other provider partners as well; hearing their feedback, bringing forth some proactive ideas, and driving efficiencies.”
In addition to Priority Health’s premium relief effort during the pandemic, Yu, the organization’s chief actuary, said the company made all telehealth visits free of member cost-sharing to improve access.
“The other thing we did that was unique was we used the predictive model to help target members with higher risk exposure and engaged them with our care management team through outreach to help them mitigate the risk directly,” Yu said.
Harnessing the power of FQHCs to drive ACO success
While the first two presentations focused on how payers and providers fared during the pandemic, the closing session dealt with the roles of ACOs and FQHCs.
Severin highlighted the fact that FQHCs take “meaningful risk together,” citing C3’s internal risk model that provides “meaningful incentives” for health centers, “responsible and actuarially valid” risk-sharing, and ensuring that the organization can “manage” and “repay if needed” the risk it takes on.
When asked how C3’s financial structure was affected by the pandemic and how it took on risk amid widespread uncertainty, Severin said a driving strategy was to stay the course.
“How [are we] mitigating risk? We're sticking with our plan. I would say that the single largest thing we're doing to mitigate risk in our plan is to diversify what we're doing so that our business doesn't flow strictly by how we do on our MassHealth ACO contracts,” Severin said.
Looking at how COVID-19 will impact ACOs going forward, Severin underscored the relationship between these organizations and the public health response.
“I hope that the pandemic has taught ACOs and other members of the healthcare ecosystem that we need to listen more to primary care,” Severin said. “We need to invest more in primary care, and we need to understand that if we don't invest, get back to the basics of high-performing primary care, and get off of this fee-for-service system, then we will never be able to advance our shared core objectives in the U. S. healthcare system of advancing quality, while decreasing morbidity, health disparities, and cost trends.”
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.