Planning for a HealthLeaders Media gathering of hospital and health system chief financial officers reveals the weightiest issues on their minds.
Preoccupying the minds of healthcare financial executives are prevailing problems engulfing the industry's business climate: uncertainty about healthcare reform, declining public and private reimbursement, accelerating operating expenses, and access to capital.
This August, 50 healthcare finance leaders will collaborate on fortifying their organizations' fiscal health at the 2017 HealthLeaders CFO Exchange in La Jolla, CA.
In pre-event planning calls, CFO Exchange attendees, representing integrated health systems, academic medical centers, community hospitals, and safety net providers, have mentioned some of the struggles they'd like to know how others are tackling.
During the two-day event, a series of moderated, peer-to-peer roundtables will explore how organizations are addressing the top five issues.
1. Dismantling of the Affordable Care Act
CFOs foresee the negative financial impact a repeal will generate and are interested in knowing how others are preparing for anticipated changes in Medicaid for expansion and non-expansion states.
"More than 50 percent of our payments come from Medicare and Medicaid. And in South Carolina, there is only one Exchange plan for the state and not many alternatives for the rest, so we're concerned there will be a lot of uninsured patients. In our primary market area, the uninsured shifted from five to seven percentage points from 2013 to 2016, and if the ACA goes away, we expect it to shift back."
— Elizabeth Ward, executive vice president and CFO, Tidelands Health, Georgetown, SC
"Depending on what gets changed with the ACA, it could have a huge financial impact on our system over the next five years, up to a billion dollars."
— John Grigson, senior vice president and CFO, Covenant Health/ Providence St. Joseph Health System, Lubbock, TX
2. Enhancing and Supporting Population Health
CFOs are concerned about building the right infrastructure to support population health, including integrating physicians, retooling their workforce, realigning the financial tracking of population health efforts, incorporating behavioral health in primary care, and determining how much payer risk to assume.
Executives expressed their concerns about knowing how and when to invest resources in a relatively uncharted path.
"At the highest level, healthcare reformers and the government are still driving us toward a population health environment, from volume to value. How much infrastructure do you invest in? What capabilities do you need? What is the timing going to be? Because no one knows the speed of this conversion, if you move too fast, then you put your health system at risk; but the same is true if you move too slowly."
— John Grigson
In addition, they are interested in how to bring disparate goals together to align with population health efforts.
"How do you address utilization from the standpoint of a mixed medical staff? We're a community hospital with employed and independent physicians, in which success depends on balancing the wants and needs of employed physicians with the independent community to achieve savings. How do you engage both physician groups in what has to happen in population health—such as access for patients, and measuring and monitoring the continuity of care?"
— Elizabeth Ward
"Population health is really about behavioral health changes, which requires more than getting physicians to influence their patients. I view this in light of Medicare Access and CHIP Reauthorization Act (MACRA) and MIPS (Merit Based Incentive Payment System)—in which specialists need to realize they need to have as much impact on their patients as primary care physicians, or they will lose reimbursement in a big way."
— Garrick Stoldt, CFO, Saint Peter's Healthcare System, New Brunswick, NJ
3. Curtailing Clinician Costs
Optimizing access and productivity to ensure profitability among acquired physician practices, reducing clinical practice variation and cost-per-case, and lowering costs associated with filling in with agency labor due to the nursing shortage are challenges for senior executives.
Organizations will be requesting and sharing strategies for seizing the reigns on clinician expenses.
"From a CFO perspective, the biggest opportunity in cutting costs and eliminating waste is through clinical variation reduction. We can save over $100 million and gain quality and safety just by eliminating variation—but how do we convince our physicians that it makes sense for them and our patients and it is the right thing to do?"
— John Grigson
"We're looking at the downstream revenue of our physician practices and reassessing whether we really need to own certain ones. As a result, we have ended some of the specialists' agreements. Their compensation rates are extremely high, especially when they resist aggregating their services to get economies of scale. We want to stay engaged and aligned, but not necessarily own the practice. Length-of-stay can increase, due to delays in waiting for a specialist consult and then waiting for their report. It's also a source of overutilization due to hospitalists wanting to do a consult for everything.
— Garrick Stoldt
4. Increasing Revenue
Overcoming reimbursement struggles, uncovering innovative ways to cut costs, and ascertaining solutions to avoiding readmission penalties are common goals for CFOs.
"We're still in fee-for-service, so as we move to value, I want to know about different payment arrangements that provide win-win solutions for both providers and employers. Are there new ways to direct contract with employers, so that you're taking commercial payers out of it altogether?"
"So far, I haven't seen value models that are, 'Wow, this works.' I know there's shared savings, but if you're really getting savings, they will eventually dwindle, and the health system will be left trying to figure out how to make it work with decreasing reimbursement. Also, how do we remove costs from the payer level–such as the administrative costs of appeals and getting authorizations--and not just the provider level?"
— Marlene A. Weatherwax, vice president and CFO, Columbus Regional Health, Columbus, IN
"Observation is the front and center issue for us. It's the Two-Midnight Rule and payers denying every admission that is two days or less even in the face of evidence-based medicine. We're writing three-page appeals for short stay admitted patients and winning, but this adds administrative costs. So we're continuing to educate ER physicians, and provide more physician advisors and care coordinators to properly document when a patient should be admitted, rather than putting them in observation. Between observation cases and DRG discharge ones, it's an enormous revenue differential."
— Garrick Stoldt
5. Determining Gaps and Opportunities
Another goal shared by CFOs is the desire to share the most useful data analytics and business intelligence platforms for improving quality-of-care and outcomes.
"Diversifying your revenue stream is always better than cutting costs, so we spend 70 percent of our time seeking how to grow and exploring opportunities in the market. How do we create new revenue streams and look for new opportunities in partnerships, joint ventures and/or acquiring other similar services?"
— John Grigson
"Everyone tends to get caught up in next new technology versus failing to see what's happening around us. Technology is not going to answer some of the issues we're facing, but expertise, and knowledge, and the listening that has to happen when you deal with human beings.
"Networking is the better way--within our organization, but also listening to what challenges that city and county planners and employers have. I tend to pay attention to the 'data' that's surrounding me, mostly the voice of the community, board members, and physicians and nurses who are on the front lines. Through this, we're starting some initiatives, such as patient advocacy meetings and employing some marketing tools to get voice of the customer as well."
—Elizabeth Ward
In addition to their larger concerns, participants at the invitation-only event will talk about consumerism, direct contracting for healthcare with employers, charting a financial strategy on value-based care, and ideas about what competition will look like in the future.
To inquire about HealthLeaders Exchange executive roundtables, email Exchange@HealthleadersMedia.com.
Julie Auton is the leadership programs editor for HealthLeaders.