With 2022 coming to a close, CFOs are looking ahead to 2023 and prospective challenges. Daniel Morash, senior vice president of finance and CFO for Boston-based Brigham and Women's Hospital, has advice for how best to navigate these challenges.
Prior to Brigham and Women's Hospital, Mr. Morash also served as senior vice president and CFO for the Mass General Physicians Organization.
Here, Mr. Morash answers Becker's questions on advice for fellow CFOs and what lies ahead.
Question: Many CFOs and financial experts are expecting a recession. How can hospital CFOs best navigate this?
Daniel Morash: It isn't easy to plan for a recession, particularly because it can have both negative (payer mix, patient volume) and positive impacts (decrease in labor and supply inflation) on our financial performance. The best advice I would give is that hospitals need to consider recession scenarios when making long-term commitments on wage increases, capital expenditures and planning for capacity for patient access. Most of our focus needs to be on the acute challenges we are facing. Still, it's important to be careful not to overreact or overcommit financially when a recession could change a number of trends we're seeing now.
Q: With ongoing, rising operating and supply chain costs, what would you recommend to hospitals?
DM: Ongoing, rising operating and supply chain costs are forcing us to react to a changing market quickly and prioritize more aggressively. Particularly with wage inflation, our operational teams are under a lot of strain to continue to serve our patients and provide the best care possible while seeing labor shortages in many critical areas. The best recommendation I can make is to ensure clinical operations and finance are working very closely together. Within the finance function, we are clearly articulating the tradeoffs that need to be made when considering what areas to address.
Q: As healthcare wraps up its last quarter of the year and prepares for 2023, what do you anticipate? What advice do you have?
DM: Next year is going to be challenging, but we are starting to see some positive trends in Q4 and have well-developed plans for overcoming some of the biggest financial hurdles we've seen this year. I would recommend being transparent not only about the difficult financial performances most of us are seeing this year, but also about where we are starting to see real improvement that can give us all confidence that [2023] will be a significantly better year than [2022].