The chief financial officer has always had a crucial role within hospitals. However, with the changes in healthcare, the CFO's role has evolved significantly over the past few years and will likely continue to change in the future.
At the 5th Annual Becker's Hospital Review conference on Friday, May 16, a panel of CFOs gathered to discuss the biggest issues in the field today. The panel, titled "The CFO's Evolving Role: Key Issues for CFOs," included Executive Vice President and CFO of Sinai Health System Chuck Weis and CFO of St. Thomas West Hospital Pamela Hess, CPA. The panel was moderated by Chief Marketing Officer and Senior Vice President of Business Development of Healthcare Finance Group Claudia Stone Gourdon.
The panelists discussed how their institutions are moving toward a risk-based model to manage care. "We all have to prepare and know we are going into a risk-based care and population management," said Mr. Weis. "We were previously maximizing fee-for-service, but now we have to maximize care management. The issue is how we can link that care and savings back to us. We've got to work with care coordination, and we're already beginning to demonstrate results in certain areas, such as asthma and diabetes."
Mr. Weis said Sinai Hospital has been able to reduce emergency room visits by 60 percent through a program to enhance care provided once the patient returns home. "The CFO has to understand more about capitation and risk management to fund the programs that allow us to take on as little risk possible. How can we get the best care of the patient in a risk management setting? We have to be more understanding of how we are delivering that care at hospitals today."
St. Thomas West Hospital is also participating in several programs to reduce costs and better manage care, said Ms. Hess. The hospital started their employees in a program to become part of an accountable care organization. They are also participating in the Medicare episodic programs.
"As healthcare moves outside the inpatient walls, we want to make sure patients are taken care of in the clinics," she said. "We're focused on home health to make sure patients aren't readmitted."
The panel also touched on how the health insurance exchanges are impacting their patient base. Sinai Hospital has benefited from expanded coverage for their patients. "We are starting to share information across our network in a bigger way," said Mr. Weis. "We truly believe it is important to reach out to the community and our patients in a meaningful way."
Even though coverage may have expanded, downward pressure on reimbursement creates new issues for hospital finances. As Medicare dollars decrease, how can hospitals cut costs? "We've been strategic on what we're doing to cut costs," said Ms. Hess. "The low-hanging fruit was easy. Now we have to have productivity and make sure nurses aren't doing wasteful things so they can take care of patients. The state of Tennessee didn't expand Medicaid, but we have a huge population who can't afford health insurance and aren't currently eligible for Medicaid. Charity care has gone up, and bad debt is going up."
A final concern the panelists discussed is the transition from inpatient to outpatient care. Outpatient surgery, even in the hospital's outpatient department, is reimbursed significantly lower than if the procedure were done in the inpatient setting. Payers are now looking for hospitals to perform as many cases as possible in the outpatient setting, and new technology and techniques are transitioning traditionally inpatient procedures into the outpatient setting as well.
"We still have the same patient load, but it has moved from inpatient to outpatient or observation," said Ms. Hess. "There is a big difference in reimbursement; we've seen a 20 percent change from inpatient to outpatient."
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