From the increasing popularity of high-deductible health plans to the uncertainty of healthcare reform at the federal level, there are many issues demanding the attention of hospital and health system CFOs this year.
To identify some of the most important areas healthcare CFOs should focus on, we asked several attendees and vendors at the Healthcare Financial Management Association's Annual National Institute conference in Orlando, Fla., this question: What is one trend/topic in healthcare finance you recommend CFOs keep an eye on, and why?
Here are the issues they say CFOs should direct their attention to.
Note: Responses are lightly edited for length and clarity.
James Fee, MD, Vice President, Enjoin: "You need to keep an eye on how reimbursement models are evolving, but that can be a distraction, and the reason for that is … how are you getting paid today? Some CFOs say case mix index is old school, but it is important today. If you lose sight of your CMI, the carpet can be pulled out from underneath you. Although you look at keeping an eye on pay for performance, you also have to keep eye on what's keeping your doors open today, and that's fee for service and quality — your fundamentals. If your coding is not accurately representing the care provided, that is going to impact your cash flow. If you lose sight of compliant coding, you'll have harder denials — you'll spend more money fighting for the little amount of money you're getting."
Jake Morris, Managing Director, Healthcare, Navigant: "The link between revenue cycle and clinical operations. Quality should be a huge focus because it's going to influence reimbursement and where patients and physicians want to go. You're so far behind the times if you're not focused on this."
Mark Grube, Managing Director and National Strategy Leader, Software, Kaufman Hall: "Pricing strategy. We did a survey last year of health systems — we had roughly 120 respondents — on consumerism. We measured four different elements: patient experience, access considerations, using customer insights to drive strategy, and pricing. It was fascinating because in terms of real-time importance of each of those dimensions, pricing came out last. Thirty percent of organizations saw it as a priority and 10 percent were addressing pricing strategy actively. With high-deductible health plans, certain services will be viewed by consumers as commodities, and that needs to be filtered into the thinking when developing pricing strategy. There is a lack of understanding about demand elasticity for different providers in their marketplace. What kind of brand premium does a leading academic medical center carry in a marketplace where they can demand pricing over a community hospital or freestanding center? Pricing strategy is either not being addressed or being addressed with intuition."
Jim Lazarus, Managing Director of Strategy and Innovation, Revenue Cycle Solutions, The Advisory Board: "Our research has shown four no-regret focus areas for CFOs: improving the patient financial experience; optimizing how the organization works with physicians; looking for scale in revenue cycle automation; focusing on better negotiations with payers. These four are evergreen."
Neal Barker, Partner, HSG: "Value-based reimbursement. It's a lot closer than people think or are prepared for. We see a lot of organizations that don't have the IT infrastructure they need for value-based care."
Sue Martin, Senior Vice President, B.E. Smith Interim Leadership, B.E. Smith: "While areas of patient access and lowering expenses are of top importance, CFOs are keeping a close eye on the shifts and dynamics around cost and reimbursements. A recent study shows 35 percent [of CFOs] said collections were their primary concern. Health systems need to be methodical when including the patient payment experience in client satisfaction scores. Tools and processes related to price transparency, charity and payment options are a must in today's environment. Any time the patient payment process can be handled prior to care, the better. Build in proactive workflows and conversations toward making every visit about the care of the patient."
Jason Considine, Senior Vice President of Patient Collections and Engagement, Experian: "Consumerism. Although consumerism has come into healthcare, it hasn't gone far enough. Hospitals haven't gone far enough to meet patients where they are. That's going to continue to be a challenge for hospitals that don't interact with patients they want to be interacted with."
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