A new gathering of healthcare finance leaders will inform CFOs about strategies to improve their organization’s finances amid emerging threats to the bottom line.
The inaugural HFMA Financial Sustainability Summit, April 16-17 in Denver, will bring together more than 200 hospital and physician practice CFOs to learn and share strategies that can bolster financial strength in the face of new challenges.
Although the content for the senior executives who attend is strategic in nature, “Strategies that don’t have tactics are just hopes,” said Richard Gundling, senior vice president of healthcare financial practices for HFMA. “So, this gathering is about real-world strategies and how these leaders can implement them.”
Areas of focus for the meeting’s sessions will include:
- Building sustainable portfolios
- Improving workforce financial results
- Moving core functions to partnerships and outsourcing
- Creating and controlling an organization’s narrative
Attendees will explore those issues and more through combinations of presentations, roundtables and breakout discussions of the CFO attendees.
CFO panels will include finance leaders from high-profile organizations, including Trinity Health, Henry Ford Health System, UnityPoint Health, HCA Healthcare, SCL Health and BJC Healthcare. They will lead industry colleagues in sharing insights, reacting to the presentations and responding to attendee feedback.
Among the presentations, Chris Coburn, chief innovation officer for Partners HealthCare System and president of Partners HealthCare International, will deliver a keynote address. Coburn, who leads Partners’ innovation investments, will discuss successful efforts to secure new revenue streams and describe research on how other health systems can do the same.
William B. Rutherford, CFO and executive vice president for HCA Healthcare, will discuss keys to build a strong financial foundation to allow for more resilience should the market change. Those keys include internal controls, workforce development, regulatory compliance and capital deployment.
Additionally, he plans to discuss how to grow top-line revenue through capital investment, diversification of provider networks, expansion of geography and acquisition.
Why the summit is needed now
The need to address financial sustainability has increased as the industry grapples with emerging trends and outside pressures. Financial sustainability pressures on healthcare organizations have increased, Gundling said, due to issues around affordability and transparency, rising healthcare costs — including labor costs — and the need to meet the value proposition sought by public and private payers.
Value-related pressures stem from demands by employers for accountability for outcomes, the Trump administration’s continued value push, and tightening margins as noted by rating agencies, Gundling said.
“It’s an indicator that the current environment is not sustainable,” Gundling said. “So, you have to transform yourself into what is sustainable.”
Changing financial situations call for solutions
Many hospitals and health systems enjoy stable and rich margins, but those organizations increasingly are a minority, said Lisa O’Connor, RN, a senior managing director in the Health Solutions segment of FTI Consulting, a sponsor of the meeting.
“Even in organizations with healthy margins, factors influencing those margins are elements that CFOs know are going to change or even erode over time,” O’Connor said.
The Financial Sustainability Summit aims to provide real-world lessons and insights for two types of hospitals and health systems:
- Hospitals that have significant margin erosion or are losing money and face a significant need for a turnaround
- Organizations that have a positive margin but are concerned about margin erosion or that need to strengthen a part of their business to offset a weakening part
“I don’t think that hospitals and health systems will ever be in a place where financial sustainability is not something that should be actively managed,” O’Connor said. “But the urgency with which they have to manage it can vary.”
The meeting also aims to help organizations that have gone through mergers and acquisitions and have related optimization issues. For instance, organizations that merged may not have figured out how to manage their patient flow and their throughput to use assets appropriately, which can cause significant issues, O’Connor said.
Those issues “may not show themselves in even the first five years [after a] merger or acquisition, but they will show themselves if left unattended,” O’Connor said.
Clinical transformation merits attention
One of the biggest emerging sustainability challenges that the gathering aims to address centers on clinical transformation.
Many hospital CFOs have difficulty identifying how clinical initiatives can have major impacts on their organization’s bottom line, O’Connor said.
O’Connor, who will co-present a session titled “The critical role of the CFO in clinical redesign and pharmacy transformation,” said CFO’s may not see how investments in clinical improvements can help their organizations financially.
As it relates to the pharmacy specifically, FTI Consulting has repeatedly found that when hospitals approach the pharmacy as a strategic asset versus a cost center, benefits result for both patient clinical outcomes and organizational finances.
For example, many 340B-eligible hospitals underutilize their pharmacy programs and don’t garner the financial benefits, O’Connor said.
She has found that even hospital pharmacy leaders may lack a full understanding of the impact it can have on clinical care and on providers’ confidence that patients — especially those with chronic disease — are receiving the medications needed to improve outcomes.
“That requires more support from the CFOs, knowledge and understanding from them and support for how they can implement those improvements,” O’Connor said.