Two health system CFOs say the healthcare industry is leaving money and productivity on the table, not due to external pressures, but because of assumptions that have gone unexamined for far too long.
Carlos Bohorquez, CFO of UC San Diego Health, told Becker’s that the long-held belief that organizations can’t balance high quality care and patient experience with fiscal discipline is one the industry needs to let go, and that the path forward begins with better long-range planning.
“It starts with the development and annual update of a five to 10 year financial and capital plan, which yields the necessary operating/EBIDA margins needed to achieve in order to fund capital and grow the liquidity position of the organization,” Mr. Bohorquez said. “This process must include the executive team of the organization to ensure everyone understands ‘the why’.”
Mr. Bohorquez said it is essential for the plan’s first year operating/EBIDA margin to direct the next year’s operating budget targets. That transparency with the full leadership team, he said, enables candid conversations about the level of revenue and expense improvement needed for the following fiscal year.
He said this includes consistent and rigorous negotiation of managed care contracts, annual strategic pricing, management of variable expenses like overtime, premium pay and contract labor, and renegotiation of vendor contracts including major contracts like GPO agreements.
“This approach allows the organization to fund necessary sources to support growth, quality and patient experience while ensuring long-term financial strength,” he said.
Rob Tonkinson, CFO of Centra Health in Lynchburg, Va., challenged a different assumption that has gained traction across the industry: that requiring employees to return to the office improves productivity.
“If managers are lacking criteria and visibility into metrics that enable them to establish and hold employees to performance standards when they are working from home, then simply having those employees at the office will not solve the problem,” he said. “People can be in the office and even less productive than at home. Presence does not equal performance.”
Mr. Tonkinson said that while certain collaborative and creative activities work better in person, he draws the line at mandating office presence for tasks that are fundamentally individual or computer-based.
“Bringing people to the office to spend virtually all of their time working on their computers, handling calls or on Teams meetings is a dissatisfier with no upside,” he said.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.