No hospital or health system is immune from margin pressure. From policy decisions made in Washington, D.C., to tense payer negotiations and competition with other health entities at the local, regional and national level, hospital CFOs face many economic determinants that cannot easily be controlled with financial investment.
Fortunately, a patient's experience with a hospital or care team is very much within an organization's management. To ensure financial viability in this tenuous healthcare landscape, hospital CFOs must become acquainted with what was once an unfamiliar core competency: patient satisfaction.
Patient satisfaction fell outside of CFO job descriptions in the past, but no hospital today will survive when its financial stewards and strategists are out of touch with patients.
Why the change?
CFOs' concern for the patient stems from their interest in ensuring financial stability. This year, the U.S. government will withhold $1.7 billion in Medicare payments from hospitals with poor performance on the HCAHPS survey, which measures patients' experiences in hospitals.
With nonprofit hospitals currently reporting an average of 3.4 percent operating margins, few organizations can afford reimbursement cuts. "While [patient satisfaction] scores were critical before, value-based care has put a bright spotlight on them now," said Gerald Maccioli, MD, MBA, chief quality officer and medical director of clinical research and scientific intelligence for Envision Physician Services.
The rise of consumerism and transition to quality-based reimbursements also underscores the importance of patient satisfaction. Many Americans are now covered by high-deductible health plans, and consumer behavior changes when facing potentially thousands of dollars in deductibles. MACRA, or the Medicare Access and CHIP Reauthorization Act, marks a new era in provider reimbursement that incorporates patient satisfaction to determine Medicare payments made to physicians.
Patients also have an increasing number of outlets through which they can share, rate or grade their experience with a hospital. These forums supplement industry websites that detail hospitals' patient safety rates, surgeon performance and outcomes, health outcomes and other key metrics. Hospitals and health systems today are vulnerable to more public scrutiny than ever before, and a single negative experience can change the perception of an organization for many.
These reasons all underscore the burgeoning role of healthcare CFOs in the patient experience. CFOs make decisions on everything from capital spending to incentive alignments. They oversee the dollars that, if properly allocated, can influence patients' consideration for their healthcare organization and empower care teams to deliver high-quality, compassionate and personalized care.
Dr. Maccioli says the CFO should act as the "executive champion" for patient satisfaction. This article explores the new relationships CFOs must cement to do just that.
Data-driven CFOs must integrate another layer of information into decision-making
Finance is a data-driven field. CFOs are accustomed to managing the business through data and analytics — powerful empirical information that justifies where and why dollars are allocated.
At the same time, CFOs' relationship with data will become even more sophisticated as they incorporate patient experience into their financial strategies. Patient satisfaction surveys and other tools provide the qualitative feedback and information vital to making wise long-term investments. For example, a decision that may yield immediate cost savings may yield detrimental effects on patients in the long run.
U.S. News & World Report published a list in 2015 detailing the most common pieces of feedback from patient letters or surveys. Many respondents cited sleep deprivation, noisy nurses' stations and messy rooms as core reasons they were dissatisfied with their care, and only a small percentage of feedback involved the clinical care they received. Their input highlighted shortcomings that hospitals could remedy through adjustments to daily operations.
CFOs possess analytical minds that enable them to understand the patient experience through concrete data instead of abstract discussions or anecdotes. The same rings true for their departments. Financial teams are more inclined to buy into the vision of a leader who makes large-scale decisions based on data rather than instincts or personal experiences.
This reason alone is cause for hospitals to implement survey methods and mechanisms that enable patients and families to provide immediate feedback about their experience before they leave the hospital. For example, some hospitals and health systems share questionnaires on tablets with patients and families, thereby increasing the likelihood and quality of feedback when it is still top of mind.
In addition to powerful survey feedback, CFOs have a wealth of internal benchmarks that relate to the patient experience — albeit less obviously.
Hospitals and health systems employ data analytics systems to increase efficiencies and improve clinical workflows. This operational data illustrates how well a hospital is running, but it also reveals what patients experience on a regular basis. For instance, CFOs can glean insights about the patient experience from metrics on wait times, arrival-to-bed times, arrival-to-provider times and other operational data. CFOs can evaluate these metrics to determine how financial decisions affect the patient experience.
"CFOs are seeing the value in employing analytics to make sure they are connecting with individual patients," said Dr. Maccioli. "Customer feedback has made healthcare undergo a global 360-degree feedback loop, as patient satisfaction ties in to everything — from the hospital environment to the staff working environments and retention."
The dynamic between CFOs and physicians
A hospital's patient engagement strategy involves all members of a patient's care team, each of whom must fully understand his or her role in upholding an excellent experience. While finance teams are not directly involved in bedside interactions, their strategic decisions create the environment and circumstances under which clinicians and patients interact. With that in mind, CFOs are key stakeholders in patient engagement initiatives.
As the chief quality officer for the largest physician services company in the country, Dr. Maccioli understands the importance of collaboration between clinical and financial leaders. "CFOs need to work with physicians and nursing leadership to review data and find the 'low-hanging fruit' — what are the pressure points for patients?" he said. "Investments need to be made from the patient's point of view, but with the critical operational oversight from physicians and nursing staff. In the past, hospital leadership and physicians have not been as closely aligned. Now, we are all in this together."
This new relationship will take time and work on behalf of CFOs. It is not enough to commit to the cause upfront only to let the clinical-finance disconnect of the past seep back into the organization. CFOs must also recognize that clinicians have a financial stake in patient satisfaction as well.
"If the CFO goes on this [patient satisfaction] journey without the engagement of their physician staff, it's doomed for failure," said Dr. Maccioli. "Patient satisfaction is a strategy to improve direct patient care and financial performance. Physicians need to be a part of the strategy and not an afterthought, which requires the CFO to work in collaboration with staff."
Despite the shift from volume to value, many physicians are not wholly sold on value-based models' ability to yield superior clinical outcomes. A 2017 Front Line report found more than 70 percent of physicians prefer a fee-for-service payment model and more than 60 percent of physicians say it will become more difficult to deliver high quality care within the next two years. Dr. Maccioli believes that if physicians cannot align themselves with executives' vision of how their hospital will move forward in a value-based payment model, they will be standing in the way of their own success.
A final way that the CFO-clinician relationship must evolve pertains to talent. Because CFOs have the final say over investments, they should ensure care teams have not only sufficient financial resources, but a high-performing network of top talent. This comes down to assessing the quality of a care team just as much as its associated costs.
"An institution will only be as successful at maximizing quality payments — or adversely, avoiding material penalties — as the human and financial capital that is resourced to accomplish the task," said Dr. Maccioli.
Conclusion
CFOs protect the vital assets of any company. For hospitals and health systems, the patient experience is as vital as an asset gets. In many ways, it is surprising that CFOs weren't widely seen as patient champions all along. Nonetheless, they are now — and they'll need rich relationships to thrive as such.
Hospitals and health systems are better positioned to deliver high-quality, compassionate and personalized care when finance teams make decisions informed by qualitative and quantitative data that reflects the patient experience. Cost-cutting initiatives, capital investments or any other financial commitment made without a real-time understanding of patients is risky at best, reckless at worst.
CFOs and care teams must rally around a mutual understanding of what a patient experience means in their institution. This shared vision will empower what may at first seem like an odd relationship. When CFOs work with clinical leaders to understand their needs and prioritize care team talent, performance and reliability within the financial framework, they will become true champions of the patient experience.