The healthcare industry is enduring tough times, but finance leaders are equipped to guide their organizations through choppy waters, CFOs said Sunday as part of a panel discussion.
Speaking onstage during the opening session of HFMA’s Annual Conference in Nashville, five health system CFOs described how they’ve responded during a tumultuous period that began more than three years ago with the COVID-19 pandemic and has continued over the last 18 months with a workforce crunch and financial headwinds.
“I think the whole industry is feeling the effects of some significant financial pressures,” said Susan Nelson, executive vice president and CFO with MedStar Health. “Everyone is feeling the pressures of revenue rate increases not keeping up with the expense inflation increases that we’re all experiencing. Workforce is a common theme that we all read about. The pressures are real on capacity [with the] supply of folks in nursing certainly, but [also] in other areas beyond that.”
Elizabeth Foshage, executive vice president and CFO with Ascension, said capital-related limitations are a major factor in the current environment.
The task is about “really being able to challenge those high-priority capital needs and make sure that those projects that have the largest ROI are continuing to go forward, but also to look at innovative new ways to deliver care,” she said. “We have been able to find ways through telehealth, for example, [and] through hospital-at-home pilots where we’ve been able to provide equal-quality care in a lower-cost setting.”
Bolstering health at lower costs
The panelists discussed how finance leaders can help their organizations improve the cost effectiveness of health.
“We have to be able to provide the care that is needed in the appropriate setting at the lowest possible cost,” said James Lee, executive vice president and CFO with MultiCare.
His organization has invested in a population health management company and signed more than 30 value-based payment agreements. Lee said such investments are especially crucial given the difficulty of getting payers to reimburse at rates that can make up for cost inflation.
Instead of the typical per-member-per-month approach to risk-based contracts, MultiCare is looking to engage in county-based payment models.
“It doesn’t matter whether [particular county residents] are seeking care or not,” Lee said. “We want to be able to get all of that capitation revenue in order for us to deliver the most effective care in that community.”
He added, “I believe that MultiCare is very close to the tipping point where we have to start seeing hospitals and physician groups as being cost centers as opposed to revenue centers and looking at how we reduce utilization in order for us to have this care that our community needs even though the government payer is not making up for the inflation that we have.”
Matthew Cox, executive vice president and CFO with Corewell Health and the moderator of the panel discussion, said Corewell applies a specific designation to members of the organization’s health plan who come to the health system for care. If, for example, such a patient needs to cancel an appointment because of car trouble, the patient can be offered a ride.
“We treat those patients differently because we own the total cost of care,” Cox said.
Leveraging technology to find new solutions
Ascension is experimenting with ChatGPT in areas such as radiology overreads and coding and documentation, along with nursing care plans, Foshage said.
Caution is justified, she added, to ensure compliance officers and legal and ethics professionals are comfortable with the new technology’s applications.
“That pace of change is just really accelerating,” she said. “I think we kind of need to buckle up and get ready for the changes that are going to come within finance with the artificial intelligence.”
Advanced AI can be a boon, Nelson said.
“I try to reframe it and think about it from the standpoint of there’s really not enough workers to do a lot of the work that we need to have done,” she said. “It’s an exciting time in healthcare and it’s an exciting time with technology, and the possibility of bringing those two things together to further the good that we’re all trying to do is very exciting.”
In general, Lee said, the need for innovative approaches has never been greater.
“There are solutions that we haven’t tried, and healthcare tends to be a follower in a lot of different things,” he said. “We are at a point in time with the workforce challenges that we need to be creative.”
For example, “The primary nurse model is not sustainable. If we can’t cooperate with our nursing leadership colleagues and find different ways to care for patients, we’re not going to be around much longer.”
Taking stock of a daunting environment
William Rutherford, executive vice president and CFO with HCA Healthcare, agreed that healthcare finance leaders today have to spend time as educators and therapists for colleagues.
It’s important “to be very data-driven in how we are assessing the environment, how we’re thinking about the impact on our organization and how we’re communicating that,” he said. “And probably as importantly, how we’re identifying what our response is going to be in the face of that.
“In large organizations, there’s always going to be pockets of individuals or people where there’s some uncertainty. And I think for leaders, we have to kind of rise up and take a little bit broader lens into that environment and communicate effectively.”
Asked about advice they would give their younger selves, Foshage mentioned the importance of being authentic. Lee spoke of viewing a job in healthcare as a mission to help people. Nelson said relationships with colleagues and peers transcend all the numbers and statistics.
Rutherford touched on the need to commit to “a lifetime of continuous learning.” He added, “Find where you have the unique opportunity to make a difference.”