“Uncertainty” is a healthcare buzzword that has fallen from the lips of many hospital and health system CFOs in recent years — not as a complaint, but as a caution of a condition that must be managed.
“The uncertainty makes it very hard to do our jobs, because the changes can happen in such a material way with your revenue so quickly that you aren’t expecting it,” Jenni Alvey, senior vice president and CFO of Indianapolis-based IU Health, told Becker’s “CFO + Revenue Cycle Podcast.” “You need to be planning for those things. You need to have playbooks in place.”
At IU Health, that playbook takes the shape of a deep, collaborative engagement with the state of Indiana on direct-to-payment programs and supplemental Medicaid funding. It can also look like forging unusual partnerships.
“Some people might say competitors, but I’m going to say they were our peers. We had several that we partnered with this past year in working with the state on, ‘Hey, how do we make sure we’re prioritizing our Medicaid patients, how do we make sure that we’re also reducing our commercial prices, and how do we make sure that we’re providing great quality care and able to do that going forward – supporting the state and their Medicaid needs?'” Ms. Alvey said.
While they might sound straightforward on paper, work requirements and eligibility changes can also create coverage churn and, in turn, spawn administrative barriers and put financial strain on patients, Ms. Alvey said.
However, these pressures aren’t limited to one area. Ms. Alvey pointed to a broader regulatory environment where even small shifts can ripple through an organization’s bottom line.
“There are a lot of reforms to prior authorizations, denial behavior, shifting payment models and really how hospitals and payers interact operationally,” she said. “Even small policy changes can really have a material impact on our cash flow and revenue predictability. When you put it all together, hospital leaders are already managing thin margins, high capital needs, workforce inflationary pressure and growing demand.”
Scott Hawig, executive vice president and CFO of St. Louis-based BJC Health, framed similar pressures through an access lens in another episode of the “CFO + Revenue Cycle Podcast,” in which he said that rising demand is the optic through which other challenges should be addressed.
“There’s certainly a labor supply [issue], just a number of people we need, [from]physicians, nurses, and allied health professionals, to deliver the care,” he said. “There’s a general financial pressure that providers are under, and that includes affordability […] and is all under the prism of rising demand.”
Mr. Hawig stressed the fundamentals: ensuring systems see patients in a timely manner to drive care quality and satisfaction.
At BJC Health, that drive is supported by leaning into models like micro-hospitals and virtual care tools to extend reach without the requirement of a full, traditional hospital.
“The throughput, the ability to see somebody within 10 to 15 minutes, the patient satisfaction for that experience has shown us a lot and given us a lot of feedback in terms of how we run emergency departments and urgent cares,” he said.
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