Froedtert Health is growing value-based care, making progress on digital health initiatives, and preparing for a merger on the horizon.
In September, the Milwaukee-based system and Neenah, Wis.-based ThedaCare signed a definitive agreement to merge into an 18-hospital system.
Froedtert Health is also moving further into the payer space, with plans to become the sole owner of Network Health, an insurer offering commercial and Medicare plans in 23 Wisconsin counties.
CFO Scott Hawig told Becker's about Froedtert's top priorities for the next fiscal year, its future plans for partnerships and more.
Question: What are the top three strategic financial priorities for your health system in the next fiscal year? How do these align with the organization's overall mission and goals?
Scott Hawig: Froedtert Health’s top three financial priorities are:
1. To meet or exceed our budgeted performance improvement targets, in alignment with the work of our Operational Excellence Council. By achieving these targets, we ensure efficient resource utilization while maintaining excellence in patient care.
2. To execute our system integration plan, with a focus on aligning these efforts with our population heath, scalable shared services and partner of choice goals.
3. To implement an adaptive investment, capital allocation and capital structure model that supports our strategies to grow value-based care, digital care and clinical transformation, as well as diversified revenue streams.
Q: What are the biggest financial challenges facing your health system today? On the other hand, what are the most promising financial opportunities?
SH: The biggest financial challenges for our health network include workforce demand, rising pharmaceutical costs and disruptions caused by segmentation. Conversely, the most promising opportunities are centered around inspiring advancements in patient care, documented outcomes driven by our broad capabilities and expanded reach of coordinated care, and financial and talent investment momentum in health and wellness.
Q: How is your system leveraging technology and digital health platforms to enhance patient care, improve operational efficiency and generate revenue?
SH: We are incredibly excited by the progress we are making on this front. The internet is a critical component of our patient care delivery model. Not only does it allow our physicians and staff to better know their patients, it provides greater efficiency in scheduling, technology-assisted self-care and greater patient satisfaction. Our most recent initiative in this area is a collaboration with Amazon Web Services, which allows us to offer our patients new services on our mobile app so they can better manage their health from any location at all times.
By creating experiences that foster patient participation, we are looking toward a future where we can provide education, guidance and partnership to help our patients live their best lives.
Q: What partnerships, joint ventures, mergers or acquisitions is your system exploring to strengthen its financial position or expand service offerings?
SH: We recently announced that Froedtert Health and ThedaCare and our respective boards have approved a definitive agreement outlining the terms of the planned combined health system. Our goal is to launch the combined health system at the start of the new year, pending customary pre-closing conditions, further board approvals and regulatory approval. Additionally, Froedtert Health and Ascension Wisconsin recently signed an agreement that will allow Froedtert Health to purchase Ascension Wisconsin's 50% interest in Network Health, a provider of customized commercial and Medicare health insurance plans serving people in 23 counties. Other examples of partnerships we are looking at include AI governance and use cases, a spectrum of digital health tools, scale partnerships for certain ancillary and functional business lines and value-based care strategies.
Q: Given the unpredictability of events like global pandemics, what are you doing to ensure financial resilience and sustainability in the face of unforeseen challenges?
SH: The financial strategies outlined above have taken into account the potential for unplanned challenges. The key to ensure financial resilience in a challenging time is for Froedtert Health to execute against our strategies, to stay focused on delivering those commitments and to communicate that message broadly.