Striving for Audacious Goals: Q&A With Craig Richmond, CFO of MetroHealth

Craig Richmond originally joined Cleveland-based MetroHealth as vice president of revenue cycle in 2010. In May 2013, he became associate CFO, and, this past January, took on the role of senior vice president and CFO.

MetroHealth President and CEO Akram Boutros, MD, has called Mr. Richmond a "rising star" capable of leading the health system to new levels of financial strength. Before joining MetroHealth, he held leadership positions with several financial services firms, including Huron Healthcare, Ernst & Young and Arthur Andersen. Overall, Mr. Richmond has more than 17 years of experience in the healthcare industry, specializing in multiple areas related to finance and the revenue cycle.

Here, he discusses his goals for MetroHealth, what his experience in the field has taught him about leadership and the challenges his health system faces because of high exposure to Medicaid.

Question: You just took on the role of CFO at MetroHealth. What are your goals and priorities in your first year?

Craig Richmond: I have what I call four big, hairy, audacious goals in 2014. First we're focusing on maintaining a sustainable financial position through margin management.  Margin management focuses on improving our labor management practices and containing supply costs. Our second goal is to expand our business intelligence and predictive analytics capabilities. Business intelligence tools will help achieve our vision to spend more time on the future of the business versus compiling information on the past. Our third goal is what I refer to as healthcare reform preparedness; we will continue to develop population health management capabilities and manage the trend from fee-for-service to risk-based revenue streams. Lastly, within finance, we're very focused on improving the patient experience by continuing to adopt industry-accepted guidelines for communicating with patients about their financial responsibilities.

Q: In all of your years in the healthcare industry, what's the most important lesson you've learned about leadership?

CR: I've learned that communication is the most important key to leadership success and enables leaders to cultivate a culture of trust. We need to continually strive to improve communication…and communication is an important component in any sort of change initiative. Communication should be frequent and tailored appropriately to the right audiences, making sure our people are involved in a timely manner so they understand why change needs to take place and making sure we continue to be transparent in the actions we are taking.

Q: Could you give an example of how good communication has helped you during your time in healthcare?

CR: Here at MetroHealth, about two years ago…we succeeded with implementing a leading practice operating model known as a pre-service center. A pre-service center is focused on separating the administrative processesfrom the clinical encounterallowing focus on the patient and the patient’s care at the point of service.  Before the pre-service center went live, a considerable amount of time was spent educating people within the organization to prepare them for the new business model. We were very focused on making sure we were out in front, keeping all the stakeholders in the organization engaged. What I mean by that is caregivers and physicians…meeting with them regularly.

We continued to stay out in front of operational leaders within the organization and were making sure they were informed on a regular basis, and we also wanted to keep our patients informed in terms of what we were implementing that would improve their patient experience.

Q: According to Moody's Investors Service, MetroHealth is one of the 10 nonprofit hospitals and health systems in its rated portfolio with the highest Medicaid mix as a percentage of gross revenue. How does that high exposure to Medicaid affect your system financially, and how do you expect the expansion of Medicaid in Ohio will change your fiscal situation?

CR: In the state of Ohio, the Medicaid program does not fully cover the hospital's cost of providing care to patients. The cost of providing care to the community is not completely covered by Medicaid payments alone. MetroHealth relies on supplemental government programs and county funding. Our ability to modernize and replace aging infrastructure has been limited in the past. With over 50 percent of our payer mix as Medicaid and the uninsured…that has driven us toward some new care delivery models. For example, we adopted a patient-centered medical home model in our primary care practices.  This program serves the uninsured patients in a more clinically effective and cost efficient way by partnering patients with primary care teams.  These types of models should position us well as we transition to risk-based revenue streams. 

Medicaid expansion in the state of Ohio should prove to have a positive impact on our healthcare system as well as the community we serve. Many of the individuals who would have been eligible for MetroHealth's financial assistance program will now be eligible for Medicaid. In summary, I would say Medicaid expansion is a positive for all.

Q: I read you lead an implementation of a new revenue cycle software suite. Can you tell me how that initiative is going and why MetroHealth decided to undertake it?

CR: Our year-and-a-half long revenue cycle implementation went very well. We just went live on Feb. 1 of this year, and I'm pleased to report no patient care was impacted and claims are being generated. All teams continue to work on reported issues …no major concerns.

Epic has acknowledged MetroHealth's education and training program as outstanding. More than 2,100 professionals participated in comprehensive educational programs which represents about a third of our work force. As it relates to how the initiative going, I think a lot of people are happy it's been implemented. Overall, through my eyes, it's been a success. That doesn't mean we still don't have things to do, but so far so good.

As for why…we realized our twenty-plus-year-old hospital billing system was going to require a substantial investment to be ICD-10 compliant. In addition, integrated applications and processes were a catalyst for revenue enhancements, staffing efficiencies and improved patient satisfaction.

Q: It is a tumultuous time for healthcare providers, and many face considerable financial challenges as the industry seeks to contain costs and transition to value-based care. In terms of finance and revenue cycle operations, what do you think hospitals and health systems need to focus on right now?

CR: In addition to the business imperatives [mentioned in response to the first question], I would also suggest organizations consider focusing on the following: Organizations need, in my opinion, to hardwire accountability for financial performance and support physicians in improving more cost-effective clinical care. Organizations need to continue to prepare for a seamless transition to ICD-10. Those organizations that have been preparing…have an opportunity to optimize their processes. Lastly, there is a need to continue to explore care delivery models to win patient loyalty, which will be based on convenience, ease of access and also affordability.

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