• On the Road to Value

    Todd Nelson Jun 06, 2013

    pg42_column-todd-nelsonOn the road to achieving value, there is not just one route that will get you there. 

    Until a few years ago, I was the CFO of a small, rural hospital in Iowa. While I enjoyed the job immensely, and was proud of the innovations we created, I was in danger of developing a perspective that many people acquire when they work for the same organization for a lengthy period of time: “Our way must be the right way.”

    In my current job at HFMA, I am blessed to meet with leaders from hundreds of different healthcare organizations each year. Hearing their diverse stories has really expanded my view about the multiple ways to achieve common goals. 

    Building Scale

    In April, we held the first annual HFMA Capital Conference. Executives from nearly 25 hospitals and health systems gave presentations on how their organizations are demonstrating value to their communities, preparing strategically for the future, and seeking capital to fund major projects. 

    Although the format for each was similar, the presentations truly reinforced the phrase, “When you’ve seen one hospital, you have seen one hospital.”

    For example, the CFO at Chicago’s Ingalls Health System described how his 563-bed community hospital aims to succeed as an independent entity in today’s merger-friendly marketplace. While leaders at Ingalls understand the importance of scale, they also believe there is a place for independent providers, assuming they demonstrate innovation, flexibility, and adaptability. 

    To this end, Ingalls has joined several collaborative partnerships. In addition to taking part in a buying cooperative to save on supplies, Ingalls is working closely with four other nearby hospitals to reduce readmissions. The effort, which is part of the federal Community-Based Care Transitions Program, has already resulted in significant reductions in readmissions in the community. 

    In contrast, Florida’s Boca Raton Regional Hospital has been increasing in scale and reputation—as well as brick and mortar—by providing state-of-the-art specialty care to its affluent patient population. The 400- bed hospital almost didn’t survive the Great Recession. In 2008, Boca Raton incurred a $120 million loss. Consultants were even brought in to prepare the hospital for sale. 

    However, Boca Raton achieved a dramatic 18-month turnaround by focusing intently on improving productivity, reducing costs, and improving quality. As a result, the hospital has attracted major philanthropic support from the community, enabling additional investments in clinical programs. 

    Achieving Revenue Cycle Performance 

    During the process of finalizing the selections for HFMA’s 2013 MAP Award for High Performance—which recognizes healthcare organizations that achieve excellence or demonstrate substantial improvement in revenue cycle performance—we saw a similar theme. Yet again, although the information provided by each award applicant is the same, the submissions we received reinforced the fact that there are many different ways for an organization to become a high performer.

    All of the MAP winners demonstrated excellence against benchmark metrics, such as net days in accounts receivable and patient satisfaction. However, the approaches that these organizations used to improve their benchmark scores were very different based on the organization’s culture. 

    Some approaches were structured and process oriented, many used formal performance improvement tools such as Lean and Six Sigma, while others were less formal. Still others tied their employee and executive compensation and rewards systems into every day goals that were established for the revenue cycle teams. Some approaches were driven by the executive team, and still others were driven by management and motivated teams of staff members.

    The take-away: All these MAP applicants are committed to excellence—and are excited and eager to achieve—no matter the organization’s management approach or style. 

    Choosing Your Path

    Flexible and adaptable, committed and incented … it’s all about developing a perspective to deliver on the promise of value. There are many paths to delivering this promise in all facets of healthcare organizations. What path have you chosen?

    Todd Nelson is technical director for senior financial executives/accounting, HFMA.