Boyd Chappell has replaced former CFO Jodi Howe, who left the organization back in April.
Jones Memorial Hospital—a Wellsville, New York-based hospital with 49 total staffed beds and over $121 million in total patient revenue—has named Boyd Chappell the new chief financial officer.
"Boyd comes to Jones with an impressive amount of healthcare experience and will be a wonderful addition to the administrative team," Jones Memorial Hospital CEO James Helms said in the announcement. "He also has extensive experience with the unique challenges that face those of us in rural medicine."
Chappell is taking over for former Jones Memorial Health CFO Jodi Howe, who left the organization back in April to pursue an opportunity with Alfred University. Howe served as CFO for both St. James Hospital and Jones Memorial Hospital.
"At Jones Memorial, Jodi provided vital direction and support during the launch of a capital improvement project as well as the full implementation of our new accounting and enterprise reporting systems," Helms said in a separate announcement. "Jodi has been a key financial leader for both of our organizations during the pandemic, and for that we thank her."
Chappell is joining Jones Memorial Hospital from Schoolcraft Memorial Hospital, a Michigan-based multi-specialty hospital where he served as chief financial officer and chief operating officer for more than six years. Chappell has also held financial positions at several healthcare facilities in Utah and Alaska.
"I am excited to be joining the Jones Memorial admin team," Chappell said in the release. "The combination of the rural setting and the affiliation with the University of Rochester system is an appealing blend that will allow me to build on my prior experience while providing occasions for professional growth and development."
The program will connect four hospitals, which are part of a rural healthcare network, and is designed to help older patients make the transition out of the hospital and back home.
Skyline Health—a White Salmon, Washington-based hospital with 14 total staffed beds and over $29 million in total patient revenue—has been awarded a four-year $800,000 grant to increase healthcare access across several rural counties in Washington State.
The grant will be used to create the Transitional Care Program, which will aim to improve care for patients who are recovering from surgery or another serious health issue. This project is funded by the Health Resources and Services Administration under the Federal Office of Rural Health Policy through the Small Health Care Provider Quality Improvement Program. The program will connect four hospitals, which are part of a rural healthcare network and is designed to help older patients make the transition out of the hospital and back home.
"Rural hospital leaders are the first to raise their hands to work together on a project if it means providing better care for their patients," Dr. Elya Prystowsky, executive director of the Rural Collaborative, said in a press release. "This project allows four hospitals in the Rural Collaborative to learn from each other and together make a huge positive impact on the health of their communities."
The hospital network, which includes Skyline Health, Ferry County Health, Willapa Harbor Hospital, and Lincoln Hospital, will be supported by Allevant Solutions—a joint venture between Mayo Clinic and Select Medical that offers hospital consulting services.
"This project is exciting for Skyline Health," Skyline Hospital CEO Robb Kimmes said in the release. "Not only does it help support our patients, it also supports direct peer-to-peer learning for Skyline's staff and the staff at the three other Rural Collaborative hospitals. This type of collective effort helps us all provide better healthcare to our communities."
CFOs are no longer 'bean counters.' They can serve as role models on driving culture, and how they can improve employee well-being and satisfaction, says one finance expert.
The role of the hospital CFO has evolved greatly, broadening the position's responsibilities to go beyond balancing the budget. In addition to financial wellness goals, CFOs now lead efforts that can help grow an organization through its labor, security, equality, and healthcare strategies.
The Deloitte Center for Health Solutions has released findings from a recent survey of U.S. finance leaders at health systems and health plans to find out how CFOs are taking on the challenges of their ever-evolving roles and overcoming them.
Some of the key findings from the survey include: Talent is CFOs' main concern, as is finding workforce solutions such as automation and upskilling. Additionally, four in five CFOs want to lead organizational efforts to address sustainability, climate, and health equity, and nine in 10 CFOs have defined their organizations' ESG strategy but admit there's still work to be done on implementation.
HealthLeaders recently connected with Tina Wheeler, U.S. healthcare leader for Deloitte to discuss the evolution of the CFO and the findings from the Deloitte survey.
HealthLeaders: How has the CFO position changed?
Tina Wheeler: We used to think of a CFO as the bean counter, who just reported out on the numbers, and that was their purview, but they're almost becoming stewards of the organization, and they're getting involved in a lot of different areas. It used to be that CFOs weren't involved necessarily with workforce issues or shortages. But because it's such a significant percentage of their expense line item on their income statement, they're having to get involved and try to be a solution and figure out how to manage this.
When you think about the post-COVID-19 workforce dilemmas around in-person versus hybrid versus virtual, CFOs can be role models to show how in their finance shop—at least for the back-office functions—how they can drive culture, but also improve employee well-being and satisfaction by trying to be flexible and nimble and try to determine that balance.
We used to always say that was just on the HR side of things, but CFOs are having to get involved in that piece of [the business]. As stewards of finance and capital investments, CFOs are influential when it comes to deciding to build a new hospital or invest in technology. They are such a strong voice in the C-suite. Thinking about things strategically, digital transformations, coupled with the workforce, I think their roles have significantly expanded in that regard.
HL: What did the research reveal about the status of healthcare finance?
Wheeler: It is a mathematical equation. Health systems can only change their prices once a year. So, they're stagnant. But the unprecedented increase in cost in this inflationary environment, whether it's labor costs, nursing shortages, or supply chain, kind of all compounded and caught up to the health systems. So, CFOs are trying to find solutions to figure out how they can manage their way out of them.
HL: What are some of those solutions?
Wheeler: During COVID, a lot of health systems had to put the brakes on investments, whether it was in capital or in technology, and now that's become a business imperative. They must go through a digital transformation. Let's look at the workforce, as one example. If you have shortages and you can't hire enough people, how do you use artificial intelligence or robotic process automation to solve that challenge? We've heard stories about how nurses want to spend their time caring for patients; they don't want to be dealing with electronic medical records or taking notes. So how can you ease that burden, so that you can improve employee satisfaction and try to avoid burnout? Those are a couple of tactics from a workforce perspective.
If you look at the history of health systems and how they came together, a lot of times it's pushing a bunch of different hospitals with a lot of different IT systems together, and they never harmonized those IT systems across the spectrum of this new, large health system. A digital transformation and the harmonization of the system is key. So is looking at your ERP so that you have better data for better decision-making so you can be nimbler, especially when you're facing financial challenges.
HL: In what areas are hospital and healthcare CFOs looking to make greater investments?
Wheeler: Digital transformation, so streamlining their ERP system and focusing on cybersecurity. There are so many points where technology is touching their systems. Consumers of healthcare are tech-savvy. They want to have a welcoming front door that they can access with their iPhone or whatever smartphone they have. So, then it becomes about having enough cybersecurity that [makes] you feel comfortable and safe. CFOs recognize how important this is and that is resulting in more IT security investment, coupled with continued digital transformation.
HL: What do you think CFOs will be focusing on over the next six to 12 months?
Wheeler: Margin pressures, how to enhance revenue, how to control costs, and how to deal with the workforce. They'll also want to focus on evolving their digital tools, and digital capabilities, and enhancing the patient experience while improving efficiency and driving down costs. Watching the journey that healthcare organizations have gone on related to health equity, sustainability, or ESG will be top of mind.
Bottom lines remain in the red as federal support for hospitals dries up.
Between June and July of this year, hospitals’ financial performance plunged, following months of improvements, due to declining outpatient revenue, expensive inpatient stays, and decreasing operating room time, according to the latest National Hospital Flash Report from Kaufman Hall.
Hospitals and health systems are experiencing some of the worst margins since the beginning of the COVID-19 pandemic, putting 2022 on track to become the worst financial year for the healthcare sector since the crisis first started.
"Hospital and health system leaders are currently facing the most challenging year of the COVID-19 pandemic, as related financial hardships are no longer being offset by federal support," says Erik Swanson, a senior vice president of data and analytics with Kaufman Hall. "At the same time, hospital CFOs and other leaders must be able to respond to day-to-day challenges while building more sustainable strategies for their organizations."
The median Kaufman Hall year-to-date operating margin index was -0.98%, marking a seventh consecutive month of negative actual operating margins. The median percent change in operating margin in July was -63.9% from June 2022 and -73.6% from July 2021. Operating room minutes fell 10.3% from June 2022. However, the average length of stay rose 2% from June 2022 and 3.4% from July 2021, this is a sign that hospitals are treating sicker patients, according to Kaufman Hall. Patient days rose 2.8% from June to July but were down 2.6% compared to July 2021. Emergency department visits increased 2.6% from June to July. Gross operating revenue dipped 3.6% from June, outpatient revenue dropped 4.8% from June, and inpatient revenue dipped 0.7% from June and 1.5% from July 2021.
There are strategies c-suite leaders can implement that can help ease the pressure on hospital bottom lines, Swanson says. Some hospitals have already put these plans into action.
"Some hospitals are using data-driven approaches to more effectively deploy clinical staff—including creating float pools and leveraging technicians and nursing aides—to better manage variations in demand without relying on contract labor," he says. "Hospitals can also employ supply chain management strategies to improve vendor evaluation and use and identify efficiencies for greater scale. Hospitals and health system leaders can also identify and pursue long-term strategic investments and partnerships that will ultimately strengthen performance, which may include investments to build capacity in outpatient surgery settings to keep pace with shifts in patient preferences."
Yet labor issues, supply chain challenges, and growing expenses hurt the financials of Highmark's health provider.
Highmark Health—a company that provides healthcare services (through affiliates) and health insurance to 6.8 million people in Pennsylvania, West Virginia, Delaware, and New York—announced its 2022 mid-year financial results, reporting a 24% year-over-year increase in revenue and $387 million in operating gains for the first six months of this year.
Highmark Health attributes its strong performance to its insurance business units. Overall, Highmark Health reported $12.9 billion in revenue and a net loss of $174 million, which includes a $460 million decline in unrealized equity market performance. Highmark Health's balance sheet remained strong with $11 billion in cash and investments and net assets of $9.7 billion as of June 30, 2022.
"Despite the challenging economic environment, we continue the strong fiscal discipline, and as a result of that, our long-term debt to capital ratio remained low at approximately 18%," Saurabh Tripathi, CFO for Highmark Health said during the company's mid-year financial performance conference call. "Rating agencies have taken note of our steady financial performance and our ability to overcome challenges and [produce] a very strong balance sheet."
However, the organization's health provider network, Allegheny Health Network, struggled during the first half of the year as cost pressures such as labor and supply chain issues continue to plague the healthcare space. Allegheny Health Network reported losses before interest, taxes, depreciation, and amortization of $71 million for the first six months of 2022. A rise in patient volumes was not enough to offset those costly pain points. Allegheny Health Network reported revenue of $2 billion for the period ending June 30, 2022.
"We have comprehensive organization-wide strategies in place to address these pressures," Tripathi said on the call. "And as we shared earlier this year, we anticipate challenges at AHN will continue at least through the end of the year."
Overall, leaders at Highmark Health are pleased with the organization's financial performance for the first half of the year and have a positive outlook going forward.
"Highmark Health's strong, consolidated financial results reinforce that our blended health approach and diversified business operating model are solid—both in our core markets and on a national scale," Highmark Health CEO David Holmberg said in a press release shared with HealthLeaders. "Despite challenges affecting the entire healthcare sector, we remain strategically and operationally focused on serving our customers, driving the purposeful execution of our Living Health strategy, and maintaining our holistic capital plan and strategy. We are built to weather these storms."
Editor's note: This story has been updated with a correction to the statement made by Saurabh Tripathi that the debt-to-capital ratio as reported is about 18%, not 80%.
UP Health System – Marquette—a Michigan-based healthcare provider with over $1 billion in total patient revenue and 222 total staffed beds—has appointed interim Chief Financial Officer Henrietta Skeens to the role permanently.
"We’re proud to welcome Henrietta, a proven healthcare leader, into her new role as CFO on our executive team," Gar Atchison, CEO of UP Health System – Marquette and Market President of UP Health System said in a release announcing Skeens' appointment. "Her experience, particularly at a LifePoint Health facility, and passion for community health will help us to continue to seek great ways of advancing our mission of Making Communities Healthier."
Skeens is a CPA and a veteran in the finance space, bringing extensive experience in private practice, local and regional levels with multiple public accounting firms to her role with UP Health System – Marquette. Skeens has also served as CFO for Twin County Regional Hospital, a Duke LifePoint Hospital in Virginia. She also has national experience in hospital management including tours with community health systems in Pennsylvania, West Virginia, Texas, and Florida.
"I am grateful for the opportunity to serve as the CFO of UP Health System – Marquette and to work alongside the amazing people here," Skeens said in the release. "I will continue to focus on operational improvement, sound financial strategy, and effective collaboration with our teams so that we can continue to provide the highest level of care to our community."
Before becoming interim CFO, Doll served as vice president of hospital finance for OHSU Healthcare.
OHSU Health—an Oregon-based healthcare provider with 549 total staffed beds and over $5 billion in total patient revenue—has permanently appointed interim chief financial officer Jennifer Doll to the leadership position.
Doll has served as interim OHSU Health CFO since October 2021. Her experience with the organization spans more than four years. She has helped OHSU manage the Intergovernmental Transfer Program, done financial modeling for the new graduate medical education program at Hillsboro Medical Center, and handled the transition from annual budgeting to a rolling forecast model.
"Ms. Doll stands out as an exemplary leader with a deep understanding of the complex mechanisms that fund Oregon’s academic health center," Dr. John Hunter, executive vice president, and CEO for OHSU said in a release shared with HealthLeaders. "I am grateful for her service as interim CFO, and am confident that her expertise, along with that of the entire health care leadership team, will help us navigate these challenging times."
Before becoming interim CFO, Doll served as vice president of hospital finance for OHSU Healthcare.
"I am honored to be stepping into this position on a permanent basis," Doll said in the release. "The last two and a half years have been some of the most interesting and challenging times to be in healthcare, and over the past 10 months, I have seen the leadership of OHSU Healthcare embrace that challenge. As a teaching institution, OHSU helps people learn every day, myself included. I continue to learn from those around me and aspire to help the organization continue its remarkable achievements through data-informed decision-making. I’m excited to continue my OHSU journey."
The right strategies and a clear mission can propel rural hospitals to financial well-being.
Rural hospitals face a unique set of challenges including location and improving the healthcare outcomes of underserved communities. Maintaining the financial health of these healthcare organizations can be a challenging undertaking, but with the right strategies and a clear mission, rural hospitals can be profitable businesses and quality healthcare providers.
That's the philosophy of Douglas Arvin, CFO for Altru Health System—a nonprofit rural healthcare system with over $600 million in total revenue and 257 total staffed beds. Arvin became CFO of Altru Health System in 2020 and assumed the role with a mission to identify and solve some of the biggest hurdles impacting rural healthcare providers.
Arvin recently spoke with HealthLeaders and discussed overcoming these obstacles, his priorities as CFO, where he wants to see greater investments made, and how Altru uses tech to improve the patient-provider experience.
HealthLeaders: What drew you to the CFO role with Altru Health System?
Douglas Arvin: I've been here for two years, and I've had a commitment to rural healthcare for some time now—it's very important and I want to support that. We're working on quality improvement and better reimbursement strategies within the healthcare system. These challenges drew me here and it's something that I wanted to be a part of and help support and provide leadership.
HL: What are some of the biggest challenges impacting rural healthcare providers?
Arvin: The ability to recruit and retain clinicians, physicians, and medical staff members is probably more challenging because we don't live on a beach or coast here. And so, there are challenges associated with that. Geography is a challenge, especially when facilities can be miles and miles apart. But people in rural communities have the same healthcare needs. So, improving their lives or, even saving their lives, is just as critical here. It's important to be able to invest in that and make sure that access to healthcare is available for people in this region and throughout the country.
HL: How does Altru Health System solve those challenges?
Arvin: One of our strategies here—from an outreach perspective—is to put ambulatory services in place, meaning providing physician practices and outpatient services in locations other than our core hospitals. We have an outreach perspective so that patients can have access to urgent care, labs, physician care, and specialty care in locations that are core to where we are. Providing access is certainly a critical piece of our investments.
Going beyond that, we look at investments in telemedicine. We can access care through technology that helps our patients and that came into play with COVID-19. In the initial stages, people were just simply either guided not to or afraid to resume some of their basic care. Telemedicine has continued to advance the ability to diagnose and treat rural patients.
It all comes back to our ability to produce a margin and having the resources to support those initiatives are critical to us. That's why our [vendor relationships] are so important. We can optimize our performance and improve quality for patients because there's a more seamless continuum of care and documentation of what's going on. [These initiatives] reduce errors and mistakes, improves quality, and improves financial outcomes for the health system.
HL: How can health systems utilize technology to create a better rural patient-provider experience?
Arvin: There is going to be even more development within healthcare technology. Eventually, we'll probably be able to monitor vitals and other things on our phones. All those things—particularly from a rural healthcare perspective or any underserved population—can be beneficial. Again, that's going to be good for the patient, good for quality, and it's also good for the cost of healthcare in this country.
HL: Where is the health system making greater investments on both the patient care side and the business side?
Arvin: On the patient care side, we are doing a replacement hospital for our primary campus here and with that will come increased capabilities, new technology, and new efficiencies for our staff. We have two primary hospital campuses in our health system. Our current core hospital operation for our health system is 35 years old. And so, we're doing a complete replacement of that facility. There are significant challenges associated with that for sure, but there are also significant opportunities again to improve technology, improve access, improve efficiency, improve amenities, and just have a more updated approach to healthcare.
We're also continuing to invest in our outreach programs, bringing specialties to those underserved locations. Frankly, we are going to have to invest in better population health and population management. We need to move away from the traditional method of treating the catastrophic patient and more toward how to prevent those kinds of healthcare issues. That is going to be more and more of the focus of healthcare in the future.
When I think of financial and administrative costs and non-direct patient care costs, I think of being the most efficient as we can—leveraging relationships that drive down the cost per unit for administrative-type costs is going to be critical for healthcare organizations. Best practices like documentation improvement initiatives are absolutely critical in making sure we get the reimbursement that should be attributable to us are critical pieces.
HL: What is your ultimate goal for Altru Health System?
Arvin: Quality outcomes and making meaningful differences in people's lives. Our financial performance is a mechanism to support that goal. Financially, we want to be responsible and provide good support for our mission, which is patient care, quality outcomes, and a good work environment for our people. That's what I would say is our long-term goal.
A contribution of $4 billion from the merger with the Sisters of Charity of Leavenworth Health System helped boost the system’s net income.
Intermountain Healthcare—a Utah-based, not-for-profit system of 33 hospitals—reported that revenue for the first half of 2022 jumped 25% year-over-year and net income increased by 46% year-over-year to $2.7 billion.
Intermountain Healthcare’s increase in net income was due to a contribution of $4 billion from its merger with the Sisters of Charity of Leavenworth Health System, which took effect on April 1, 2022. Despite the rise in revenue and net income, Intermountain saw a 38% year-over-year decline in its operating income to $285 billion for the first half of the year, from $461 billion for the same period in 2021.
As with most hospitals and health systems, expenses continue to be an issue for Intermountain Healthcare. Expenses rose by 31% year-over-year to $5.9 billion from $4.5 billion for the same period ended June 30, 2021. The increase in expenses was spurred by rising employee compensation and benefits, an increase in medical claims, and the continuing rise in the cost of medical supplies.
Analysts are expecting not-for-profit hospitals to have a rough financial journey for the rest of this year. Recently, Fitch Ratings revised its outlook for U.S. not-for-profit hospitals and health systems to "deteriorating" as these organizations continue to be hammered by labor issues, expenses, and "macro inflationary pressures."
Separately, Intermountain Healthcare recently appointed Lydia Jumonville as the interim president and CEO following the departure of former CEO Marc Harrison. Jumonville served as the president and CEO of Colorado-based SCL Health from 2017 to 2022 before the organization merged with Intermountain Healthcare.
"These two leaders' expertise will allow us to increase our progress on our quality, safety, and service line enhancement initiatives," says a release from ENMMC announcing the new executives.
Eastern New Mexico Medical Center—a non-profit healthcare provider with 162 acute care beds and over $500 million in total revenue—has appointed two new leaders, including industry veteran Adelane Kelly as chief financial officer.
Kelly has over two decades of healthcare finance experience, having most recently served over four years as CFO for Universal Health Systems in the Las Vegas area. Kyle Stepp is also joining Eastern New Mexico Medical Center. He will take on the role of assistant chief executive officer.
"Both Addy and Kyle have a demonstrated history of growth and development," Warren Yehl, CEO of Eastern New Mexico Medical Center said in a release. "This expertise and their innate desire to make a positive difference for Roswell and Chaves County is compelling."
Stepp has most recently served as vice president of operations for HHS, a support services provider in Texas. He has also held several administration roles with LifePoint Health, a Tennessee-based healthcare provider.
"This is an exciting time for our organization," the release continued. "These two leaders' expertise will allow us to increase our progress on our quality, safety, and service line enhancement initiatives. ENMMC is continuously working to bring the best talent to Southeast New Mexico to support our community through internal development and recruitment. We’re pleased to add these dynamic executives to our growing team of talented leaders."
