June 24, 2009
At Sisters of Mercy Health System in St. Louis, leaders have launched a strategic initiative to integrate capital and facility asset management across the system. Hospitals and health systems across the nation are taking a hard look at leadership practices to gauge how effectively they are communicating and responding to new challenges. And a special report from HFMA's Healthcare Financial Pulse project identifies five key success factors that healthcare leaders should be paying attention to today.
These new resources, introduced this month on HFMA's Healthcare Financial Pulse web site and summarized below, are part of the Healthcare Financial Pulse project's ongoing commitment to provide you with the information and resources you need to address the challenges facing health care. Visit the Pulse site often for new information and updates.
Integrating Capital and Asset Management
At Sisters of Mercy Health System, system leaders were not getting the information they needed to respond to ongoing and dynamic financial issues, control daily capital spending, or manage capital investments. In response, they launched a strategic initiative to create a more integrated and efficient capital and facility asset management process across the health system. Four systemwide planning areas were created, each with a team of internal senior consultants with the expertise to handle everything from conceptual planning to negotiations and execution.
The integrated process is paying off. For example, the planning, design, and construction team—one of the four planning areas—has developed a consistent approach to facility development, with preselected and approved teams of designers, architects, and contractors used across the health system. The new approach is saving Mercy an estimated $12 million to $15 million each year.
Assessing Evidence-Based Leadership
On a recent short survey, 571 individuals working at a major healthcare system were asked this question: "If leaders in your organization continue to perform exactly as they do today, will your results over the next five years be much worse, somewhat worse, better, the same, or much better?" Senior leaders invariably predicted worse performance, but the majority of middle managers and frontline supervisors said that performance would remain the same or better.
In "Alignment, Action, and Accountability: Getting Results in a Down Economy," Quint Studer urges organizations to adopt evidence-based leadership, helping all within the organization to see the external environment and respond to its challenges in the same way. He offers a nine-question assessment to gauge your organization's effectiveness in managing the components of evidence-based leadership.
Focusing on the Factors for Success
"How Hospitals Are Responding to Current Economic Challenges," a special report from HFMA's Healthcare Financial Pulse project, outlines the primary challenges that healthcare providers are facing today. According to the report, which was sponsored by McKesson and RelayHealth, nearly 80 percent of hospitals have experienced declines in nonoperating income and almost half have seen declines in patient revenue.
To overcome these challenges, the report recommends that healthcare finance leaders pay attention to five success factors:
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Plan, monitor, revise. Implement a strategic planning process to respond nimbly to new challenges.
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Emphasize bread and butter financial management. Be diligent in budgeting, revenue cycle management, and supply chain management.
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Place a priority on value. Focus on improving quality and lowering costs.
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Balance risk. Account for risks to revenue and expenses from operations, legal risks from a failure to meet debt covenants, and the risks inherent in various financing structures.
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Engage and communicate effectively. It is vital to be as open and clear as possible with staff and the community, whether you have good news or bad.
Additional resources on the Healthcare Financial Pulse site this month include: