Hospitals face increasing pressure to contain costs amid declining reimbursements and political uncertainty surrounding health insurance.
In a panel at theBecker's Hospital Review8th Annual Meeting in Chicago, four healthcare leaders discussed the financial challenges hospitals face in today's healthcare environment and shared cutting-costs strategies that have proven helpful at their own organizations.
Panelists included:
- Marcy Tatsch, senior vice president and general manager of Change Healthcare
- Darryl Linnington, regional director of financial planning and analysis at McAlester (Okla.) Regional Health Center
- Jason Williams, vice president of analytics and growth strategy for Change Healthcare
- Ann Evans, CFO of Pittsburgh-based UPMC's physician services division
Here are the top soundbites from their discussion, lightly edited for clarity.
On the biggest financial challenges for healthcare organizations:
Ms. Evans cited declining reimbursements as a major issue for UPMC. "More of our monies are coming from the government both on the hospital and physician side. We all know what those reimbursement rates look like, so we need to survive on a lesser dollar.," she said.
Mr. Linnington said, "Our biggest challenge is Oklahoma's $900 million budget deficit. About a year ago, our state threatened a 25 percent decline in reimbursement rates across the board. Fortunately it wasn't carried through, but we're going to be facing something of a similar magnitude again as we head into the new state fiscal year."
Ms. Tatsch said most of the meetings she has with hospitals focus on aligning patients' clinical experience with the financial experience to ensure they seek care in the proper setting. "More patients are coming into hospitals with the burden of their payment," she said. "Hospitals often struggle to meet the reimbursements they need to stay financially viable as healthcare is changing."
Mr. Williams said healthcare leaders are eager to adopt initiatives to improve their bottom line, but they don't always take the time to consider how they'll access necessary resources. "How you do more with less is often an underlying challenge," he said.
On managing self-pay:
Mr. Linnington said "Growth in self-pay is hitting us in many directions ... We're developing on demand clinics — both virtual and brick and mortar — where it's
a cash pay basis. It's like an automobile accident — unless that car crashes and exceeds a certain dollar threshold, you don't need to report it."
Ms. Evans said UPMC has leveraged technology to mirror the retail environment and facilitate the payment process. "When patients come in for a visit, they put their finger on a screen and we know immediately who they are. Copayment and other money are collected via a kiosk in many instances," she said. "Our MyUPMC app reminds patients when their bill is due and allows them to pay through the app using a scanning system."
On the political uncertainty surrounding healthcare:
Ms. Evans said UPMC keeps a close eye on its health plan as insurers wait to hear how future legislation could affect them. "Whatever happens with healthcare reform significantly affects us, since the biggest part of our organization is actually our health plan, not the provider side," she said.
We do participate in the exchanges very aggressively. We did not pull out like you see in other parts of the country. Because of the way our health plan is tied into us from a provider network standpoint, the changes organizationally actually do well for us. We just don't experience the type of losses you read about in other parts of the country. But we watch it closely because we need to ask yourself "what happens." That has a lot to do with keeping patients within our networks and the efficiencies we've garnered by keeping our costs down.
Mr. Linnington said, "While environmental or regulatory uncertainty causes many organizations to pause upcoming initiatives, it's caused us to do the exact opposite in healthcare. As the pace for potential change has accelerated, so too has our pace of progress sped up."
Mr. Williams said, "If you are thinking about pausing or waiting to do public service models, don’t. Ever since the election, I've heard broad feedback from healthcare organizations advocating — payment models might change, but the fundamentals of caring for large patient populations won't."
On data analytics:
Ms. Tatsch said data analytics plays a key role in the revenue cycle. "A lot of providers are starting to dig deep into their data. They're looking at service claims trying to discover what they should be doing to reduce denials and get the right payments upfront.," she said.
Ms. Evans said, "I ran the physician revenue cycle for many years. The most successful thing we did was rely on a vendor in the marketplace to run all of our claims and make sure we got paid correctly. Every year, the vendor found dollars we didn't collect."
Mr. Williams said oftentimes, data isn't presented in a way that's helpful for healthcare providers. "The data needs to be brought together and rationalized in a way that health systems can see their performance and understand how their activity correlates with that outcome."
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