Kirsten Largent, recently promoted to CFO of Peoria, Ill.-based OSF HealthCare in November, has been with the non-profit health system for 31 years, helping it navigate both significant growth and challenges brought on by the evolving healthcare industry.
Ms. Largent recently told Becker's the system's goal is to achieve a 2% operating margin in fiscal 2025, up from 0.3% in fiscal 2024.
"Prior to COVID-19, we were running about a 3% operating margin, then went down to a negative 3% in 2022," she said. "In 2023, we worked on a lot of margin repair initiatives, got back to break-even, and now are continuing that improvement trend to get to a 2% operating margin in fiscal year 2025."
Ms. Largent cited strategic growth in areas like oncology, neurology cardiology and pediatrics as having been key to improving OSF's operating margin.
She emphasized the importance of workforce optimization, highlighting efforts to implement new care models and enhance productivity, recruitment and retention. Ms. Largent also stressed the need for disciplined management of patient length of stay to improve both treatment outcomes and access at OSF's hospitals. Finally, she underscored a focus on refining reimbursement models, particularly by optimizing all of the system's value-based contracts where it has quality bonuses and other opportunities.
The system, which will acquire its 17th hospital, Dixon, Ill.-based Katherine Shaw Betha Hospital on Jan. 1, has also embarked on a $200 million cost-savings plan over a five-year period. Calling it a "huge area of focus" for OSF, Ms. Largent said the system has garnered around $56 million in savings or release capacity over the last two years.
"A lot of the savings have been in our revenue cycle space, and some low-hanging fruit, but also in many of our other finance areas … and some of our supply chains like automating purchase order approvals and invoice approvals," she said.
Apart from cost savings, Ms. Largent encouraged system leaders looking to get their margins up to focus on available and innovative virtual care opportunities, understanding population needs and how to deliver high-quality, cost-effective care, and implementing automation.
"I think that technology can allow organizations to expand access, leverage scale and also provide a great patient experience," she said.