It takes courage to be among the first healthcare organizations to do something totally new. I had that in mind when I chose “courage in leadership” as my theme for my 2006-07 term as HFMA’s board chair.
The need for courage is perhaps most readily apparent on the clinical side of healthcare because human lives are at stake. A classic example is the first heart transplant, which was performed in 1967 in South Africa. The first transplant recipient survived only 18 days. But four of the hospital’s first 10 patients survived for more than a year. Today, 75% of heart transplant patients survive for more than a year and many live much longer. Failure is sometimes the price of progress; that is widely understood in the field of medicine.
Luckily, the stakes are not so high on the management side of healthcare. Nobody dies as a direct result of a failed finance experiment. Nonetheless, it took courage for U.S. hospitals and health systems to become early adopters of price transparency. They didn’t know what stakeholders’ reactions would be or what unintended consequences might flow from price disclosures. I was the CFO of the hospital group at Spectrum Health (now Corewell Health) when the health system ventured into price transparency in the early 2000s. As it turned out, care purchasers reacted positively overall. I was proud to be a champion of that initiative.
I drew on my experience at Spectrum, along with advice from knowledgeable practitioners, when HFMA led an initiative to develop industry-consensus recommendations for improving price transparency. Those recommendations, published in 2014, were subsequently adopted by several hundred hospitals and health systems. It took courage for them to tackle price transparency during a period when public and media scrutiny of hospital pricing was intensifying.
At the same time, economists were voicing skepticism about whether access to price information would change consumer behavior. And many finance professionals were deterred by the complexity of healthcare price information along with concerns about the impact of price transparency on managed care contracting. The net result was that the number of healthcare organizations willing to go down the price transparency path voluntarily never reached a critical mass.
In 2023, posting price information online is no longer a matter of courage; it’s a matter of regulatory compliance. Debates about the merits of price transparency in healthcare are now moot. Whether CFOs agree with it or not, price transparency is here to stay.
But the call for courage in leadership that I made as chair of HFMA in 2006 is still relevant, not only to transparency but also to consumerism in general.
Today’s healthcare finance leaders need the courage to go above and beyond regulatory requirements to deliver easily accessible, consumer-friendly price information and take a continuous improvement approach to revamping their revenue cycle practices so they become more consumer-centered.
They need the courage to proactively educate their communities about the financial side of healthcare, even though many consumers are dissatisfied with it. They also need to incorporate their organization’s financial assistance policies and procedures into their efforts to improve health equity, a current initiative for many health systems.
Going forward, the issue is not whether the bar for price transparency — and all aspects of consumerism — will continue to be raised; it’s how that will happen. Recent history tells us that if providers don’t find the courage to be proactive, regulators will step in and shape the course for us. Our voluntary efforts may not always succeed. And that’s OK. Failure is sometimes the price of progress. Courage in leadership will see us through.