CFOs name top 6 challenges in 2017
Maintaining optimal financial performance amidst regulatory uncertainty is a key challenge hospital CFOs look to tackle in 2017.
Healthcare leaders explored financial challenges their organizations face in 2017 during a panel discussion at Becker's Hospital Review's 5th Annual CEO + CFO Roundtable Nov. 7 in Chicago.
Here are six challenges panelists identified.
1. Combat volume leakage. As commercial and government payers continue to reduce reimbursement rates, provider organizations need to treat a larger volume of patients to break even. This is becoming increasingly difficult as regional healthcare competitors step up efforts to attract consumers, says Mark Anderson, CFO at LaneRegionalMedicalCenter in Zachary, La. "Competitors in the area are fighting for our patients. Our strategies in 2017 revolve around driving volume to our hospital as reimbursement declines," Mr. Anderson says.
2. Smart expansion. Mergers, acquisitions and affiliations have become important tools in a hospital's strategic wheelhouse. Looking to the future of value-based reimbursement, healthcare providers like Adventist Health Northern California in Roseville are gradually expanding their footprint to encompass and control the entire continuum of care. "We're identifying strong rural health clinics and acute care settings we could potentially affiliate with as part of our smart growth strategy," says Joseph Reppert, CFO at Adventist Health Northern California.
3. Clinical documentation improvement. Without accurate clinical data, a healthcare organization is at a serious disadvantage when it comes to population health, says Kendall Qualls, vice president of global marketing at Medtronic. Hospital leaders are both financially and clinically motivated to improve the quality and specificity of their clinical documentation data. For instance, a hospital can achieve a higher level of reimbursement if clinical coding reflects the severity of the medical condition. "We are working with more and more hospital executives to focus on clinical documentation improvement," says Deb Gage, president and CEO at Medecision. "Data accuracy is of primary importance moving forward."
4. Build fundamentals of managing risk. Healthcare organizations will need to make risk management a core competency moving forward. But unlike insurers, hospital systems have little to no experience taking on risk. Going into 2017, "we are seeing [hospital leaders] focus on the fundamentals of becoming a risk-baring entity," says Ms. Gage. She says Medecision is helping clients understand utilization management, network management and compliance, among other necessary skills.
5. Paradigm shift in reimbursement. Simultaneously managing fee-for-service and alternative reimbursement models poses a difficult balancing act for health systems moving into 2017, Mr. Reppert says. Value-based programs like bundled payments require a different financial skill set and different financial management tools. This means CFOs must consider making strategic and capital investments at a time when hospital resources are increasingly limited. "It's very tough to keep your feet on both sides of the reimbursement world, one being fee-for-service and the other being capitated rates," Mr. Reppert says.
6. Improve point-of-service collection rates. Improving point-of-service collections is still a challenge for many hospital systems. Hiring and retaining frontline staff with a high-level skill set can greatly enhance a hospital's collection efforts, Mr. Anderson says. "We put registration staff through an intensive 10-week boot camp to ensure they have the technical and emotional intelligence to engage our patients in productive financial conversations," Mr. Anderson says. "Employee training and engagement has been key to improving upfront collections."
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