Critical access hospitals are a vital component of rural communities, but a combination of demographic, economic and technological factors make it difficult for these facilities to maintain solid financial footing.
We asked critical access hospital CFOs to share the biggest challenges they're facing and to offer advice to their peers. Here's what Julie Georgoff, vice president of finance and CFO of Magruder Hospital in Port Clinton, Ohio, had to say.
Question: What is the greatest challenge facing hospital CFOs today?
Julie Georgoff: One of the greatest challenges for hospital CFOs is planning and forecasting in today's healthcare environment. We often have discussions around what a successful hospital will look like in ten, or even five years from now. It is becoming more and more difficult to predict with consumerism, advancing technology and evolving insurance models.
The industry is also unique in that healthcare has numerous external forces which are able to push their own economic pressures toward hospitals. Healthcare regularly sees escalating costs from vendors, dynamic requirements and/or covered services for health claims and regulatory stipulations. Hospitals are rarely able to recover these increases or push these changes outward due to the complex defined payment methodologies.
The new realm of competition for healthcare — some of which is yet to be determined — also creates a cause for reaction from hospitals. Hospitals are expected to provide for the unexpected/urgent services, elective offerings and a breadth of medical specialties. Many of these foundational services such as physician specialists, trained staff and equipment are necessary 24 hours a day/7 days a week. The free-standing centers or virtual care sites are not typically expected to provide services outside of normal business hours which allows for a different cost and fee structure. They also tend to have less regulatory and environment of care standards.
Q: What is the most important piece of advice you could give to other hospital CFOs?
JG: Work to help your hospital to think differently. Explore strategies for the "yet to be defined" competition and think like an insurance company about access, cost of care, service definitions and what is sustainable.
Q: What skills are essential for a hospital CFO in today's healthcare climate beyond traditional financial and business acumen?
JG: Hospital CFOs are assumed to have the financial knowledge and business acumen — now the focus is on how we can do things differently, what will healthcare be in the future and more importantly — what will it not be.
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