4 Stories CFOs Tracked in 2023

Staying abreast of the healthcare finance market is a must for CFOs, and there were four stories that were top of mind for leaders.

Here are the four stories that CFOs tracked in 2023:

Mclaren St. Luke's closed down in 2023 due to 'historical financial losses'

McLaren St. Luke’s, a Maumee, Ohio-based healthcare provider, closed the hospital in the spring following years of declining revenues and an unstable reimbursement environment.

"Despite the tireless dedication of everyone associated with McLaren St. Luke’s, we have not been able to overcome the historic financial losses experienced by this hospital—losses that began long before COVID-19 that now run into the millions each month," Jennifer Montgomery, RN, MSA, FACHE, president and CEO of McLaren St. Luke’s, said in a statement announcing the closure. "Our passion for patient care and commitment to clinical excellence have never wavered. But sadly, we are not on a financially sustainable path."

Read the full story here.

Steward Health Care System CEO said we would see more VBC in 2023

Steward Health Care Systems prides itself on being a leader in the transition to value-based care (VBC). This Dallas-based operator of 39 hospitals across Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania, Texas, and Utah generates roughly $6.5 billion in annual revenue and was founded on the VBC model.

CEO Ralph de la Torre, MD, connected with HealthLeaders this year to discuss the organization’s success with the VBC model, why hospitals may be reluctant to adopt a VBC model, and why he thought that would change in 2023.

Read the full story here.

How CFOs are balancing physician compensation with lowering labor costs

Hospital and health system CFOs are facing a bit of a dilemma when it comes to recruiting and retaining physicians. On one end, physician compensation is rising. On the other, slashing labor costs is a priority.

That reality necessitates that CFOs achieve a balancing act between employing top talent while keeping expenses in check. But hospitals' bottom lines aren't just affected by how much it costs to pay a physician. There are also opportunity costs and other expenses associated with physicians walking out the door in search of better compensation.

For that reason, cutting corners with physician salary isn't at the top of CFOs' to-do list. If anything, the opposite seems to be true, with hospitals acknowledging the competitive landscape for attracting and retaining physicians and showing willingness to invest in their workforce.

Read the full story here.

Deal Or No Deal: 3 ways CFOs can take a stand in contract negotiations with payers

If it seems like contract negotiations between payers and providers are becoming more adversarial and playing out in public more often, that's not just perception—it's the reality in which the fragmented healthcare system currently operates.

Thanks to economic headwinds made up of record inflation and operational challenges, hospital and health system CFOs find themselves with their backs against the wall in negotiations with insurers. Operating margins may be slowly improving, but they remain razor thin for many, especially in comparison to the profits payers continue to reap.

As contracts agreed upon in a different financial climate reach their expiration, the two sides are being forced to come to the table and find new common ground during a new normal in healthcare.

Read the full story here.