A Joint Report from the American Association for Physician Leadership® and Healthcare Financial Management Association  

Desigining the New Health Care System: The Need for CMO and CFO CollaborationStakeholders throughout the healthcare system increasingly recognize the need for greater value in health care—an improvement in both the quality and cost of care. The emergence of new value-based care and payment models emphasizes the importance of collaboration between the clinical and financial leaders within health care organizations.

It is imperative that healthcare leaders communicate a common message about the pursuit of value, which requires a common definition and agreement on the metrics selected to track progress. Distinct capabilities in four categories can help organizations navigate the shifts required to move toward value-based care delivery: people and culture, business intelligence, performance improvement, and contract and risk management.

One powerful concept that can bridge the traditional gap between clinical and financial leaders is the goal of becoming a high-reliability organization: one that delivers performance as intended consistently over time. This consistency would translate into:

  • No harm to patients (safety focus)
  • Clinical excellence (quality focus)
  • Patient satisfaction (patient-centered care)
  • Positive margin (financial focus)
  • Organizational leaders can use the trust cycle to enable the changes required for successful adoption of new care and payment models. The cycle includes four key steps:
  • Finding common ground
  • Having needed dialogues that are healthy, meaningful and safe
  • Tapping collective wisdom
  • Building trust

Because the transition to value-based models inherently includes both quality and cost, it is a critical arena for collaboration between clinical and financial leaders. It is important to acknowledge that chief medical officers (CMOs) and chief financial officers (CFOs) speak different languages, have different perspectives and focus on different goals. It is absolutely critical for clinical and financial leaders to recognize and understand the pain points of their colleagues on the other side of the C-suite.

Success in the value-based environment requires leaders who can bridge the gaps between the clini­cal and financial realms. It requires clinicians who can understand finances and can galvanize their peers around organizational or population health goals. Success also requires financial leaders who understand clinical priorities. CFOs must be able to identify relevant, actionable data for clinicians and communicate effectively with CMOs and care providers.

It is essential that organizations minimize dollars withheld from penalty programs and maximize dollars received in reimbursement and in incentive programs. Financial success in these programs requires clinical and financial leaders who have a clear understanding of the various payment programs and a process for shifting strategies and practices in response to changes in these programs.

The availability of timely, accurate, actionable data is critical to providing the feedback that clinical and financial leaders need to navigate the transition from volume-based to value-based payment. It is also es­sential for providing rapid feedback and comparative dashboards to align frontline clinicians with organiza­tional goals and inform decisions that affect population health. Issues with interoperability and difficulties with amassing data from different IT systems when inconsistencies are present remain significant barriers to optimal data sharing.

Finally, the vast amount of data collected requires translation to useable information for leaders, clini­cians and patients. Leaders must ensure that all required metrics are collected and reported, yet identify the "meta-drivers"—those key levers for optimizing performance with which incentives should be aligned.

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Publication Date: Thursday, May 21, 2015