By Todd Nelson
Healthcare finance leaders sometimes focus too much on the dollar impact of new ideas, not taking into account the broader organizational impact. Don't get me wrong. We must consider the financial impact of our decisions, a lesson my CPA father drilled into my head from a very young age. "It's great you want to sell lemonade, but are you planning to make the lemonade yourself, buy pre-made, or have someone make it? How much are you selling it for? Do we have the ingredients to make it? Oh, and do you need a loan to buy the lemonade?"
However, in addition to asking the standard financial questions, we also need to consider other key issues when it comes to innovation.
What is the impact to patients and their families? A few years ago, a group of CFOs at a Healthcare Financial Management Association (HFMA) event, were discussing new payment models, such as bundled payments. The CFOs talked about how hospitals would need to make financial and operational changes to accommodate these models.
Joe Fifer, HFMA's new president and CEO, sat quietly during these discussions. After a few moments, he said: "I realize we are all financial people, but let's not forget to seriously consider the impact to our patients, their families, and the communities we serve." His comment made us go back and discuss the impact of these new payment models on care delivery, patient and family responsibilities, and unique ways to engage patients/families in the entire care continuum.
Does it fit within our vision, mission, and strategic plan? At another HFMA meeting, Peter DeAngelis, executive vice president and COO of Catholic Health East, said: "We often say 'no margin, no mission.' But maybe a more important way to think about this is 'no mission, no margin'." DeAngelis was referring to a specific HFMA initiative, but his comment applies to many healthcare business moves. When considering a new initiative or innovation, a healthcare organization needs to ask how that idea fits within the strategic plan, mission, and vision. Given limited resources (capital, labor, and political), hospitals must choose their initiatives wisely. They can't be all things to all people.
What is the impact to the staff? The best ideas-the ones that save money and improve the health of the patient-will fail miserably if we don't consider the impact on our clinical and operational personnel to get it done. When we change to a new drug therapy that requires 30 minutes of nursing time versus five, and don't seek nurses' input into this change, then the initiative is doomed despite improved patient outcomes and lower drug costs.
As I learned from my dad, it is certainly paramount for us to take into consideration the financial impact of any new initiative. But the reach of anything new has much more than just a financial impact; it can have operational and strategic implications as well. To make the best decision, you must consider all these factors.
Todd Nelson is technical director for senior financial executives/accounting, HFMA, and a former hospital CFO (firstname.lastname@example.org).
Huron Healthcare: Readying Your Organization for Transformation
Gordon Mountford, executive vice president, Huron Healthcare, discusses business imperatives for undertaking transformative change.
Xtend Healthcare: A Custom Approach to Optimizing Revenue Cycle Performance
Tom O'Neill, CEO of Xtend Healthcare Advanced Revenue Solutions, discusses key areas where organizations risk revenue leakage and ways they can use outsourcing to better protect cash flow and support accurate payment.
KeyBank: Helping You to Realize Your Strategic Vision in Changing Times
Victoria Terekhova, senior strategist for Enterprise Healthcare at KeyBank, discusses key challenges when developing long-term strategy in a rapidly changing industry, and the role the right banking partner can play in helping healthcare providers navigate the opportunities before them.
SSI: Preparing the Revenue Cycle for Changing Payer Roles
Availity: Connect to the Future of Healthcare Information
Deloitte: Leveraging IT for Value-Based Care Transformation
Apex: Cultivating Patient Payment while Elevating the Patient Experience
HealthPort: Ensuring Compliant Exchange of Protected Health Information
Community Hospital Corporation: Supporting Community Hospitals
Cerner: Connecting Clinical and Financial Data
Aidin: Better Manage Your Post-Acute Provider Network and Improve Patient Outcomes
GE Healthcare: Delivering Sustainable Cost Reduction
Deloitte: Solutions for Healthcare Transformation