On the heels of his first year as CFO of Fairfield, Calif.-based NorthBay Health, Joseph D'Angina is sharing why it's important for health system financial leaders to keep their eye on the prize in the new year.
Editor's note: Responses have been lightly edited for clarity and length.
Question: What are the biggest healthcare industry financial challenges you foresee in the next year?
Joseph D'Angina: The ability for both large and small healthcare organizations to continue in their recovery efforts post-COVID and the speed to execute on those plans resulting in improving financial performance.
Smaller organizations should be more nimble to both create plans and execute on those plans, allowing for a quicker recovery, while larger organizations may be mired in more management/governance levels to develop and implement, potentially delaying a full realization of those plans. As a result of those recovery efforts, capital investing may also continue to be challenged, thereby potentially delaying growth opportunities.
Q: What are the top three strategic financial priorities for NorthBay Health next year? How do you aim to achieve them?
JD: 1. Focus on core operations, without being distracted by 'shiny objects.' That is, identify which service lines the system excels with, together with core community needs, and assure those are resourced properly.
2. Vigorously pursue all revenue opportunities to assure payments are made in accordance to all contract terms with health plans and government payers, while minimizing avoidable denials.
3. Assure complete discipline related to expense management (human resource productivity, supply expense contracting optimization, minimization of external purchased services, etc.). In other words, basic blocking/tackling.
Q: What advice do you have for other health system CFOs to help boost their margins in the next year?
JD: 1. Assure payer contract compliance.
2. Tight collaboration with operational leaders (particularly clinical leadership) to embrace financial stewardship.
3. Execute, execute, execute. Remain focused on the plan at hand without being distracted by those "shiny objects." Assure whatever plan is being pursued, the entire leadership team is in lock-step and resolve any deviations within the leadership team only. Communicate the details of the plan with regular check-ins to the broader management team, identifying what success looks like and measuring that success along the way with specific time limits identified. Don't underestimate the perception of small spends within the organization (unnecessary travel, meals accompanying meetings, etc.) — these types of expenditures will create a mixed message. Celebrate the incremental successes.
Q: What partnerships, joint ventures, mergers or acquisitions is NorthBay exploring in the new year to strengthen its financial position or expand service offerings?
JD: At this point, focus on core is the primary strategy to continue stabilizing the financial health of the organization while we develop a refreshed strategic plan with growth opportunities going into the next calendar year.
Question: Given the unpredictability of events like pandemics, what are you doing to ensure financial resilience and sustainability in the face of unforeseen challenges in the new year?
JD: Remain very disciplined with our existing recovery plans while the financial health is stabilized. During this recovery process, strengthen the balance sheet to allow for more flexibility as growth opportunities arise into the future.