8 health system CFOs on their most pressing issues

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From managing disruption to addressing staffing shortages, eight CFOs from top health systems across the U.S. recently spoke with Becker's Hospital Review about the most pressing issue they are facing.

Editor's note: Responses were lightly edited for length and clarity.

Kevin Burns. Executive Vice President, CFO and Chief Business Officer of Houston Methodist: The short answer is margin pressure and inflation. This margin pressure is being driven by increasing labor and supply chain costs. This is hitting all of us in the industry. For example, in our supply chain, we are expecting an increase in costs anywhere from 4 percent to 6 percent next year, and supply chain is our second largest cost. We are also seeing a rapid rise in labor costs. Demand is high for workers because COVID-19 volumes are up, while we are also seeing a static labor force or even declining labor force.

At Houston Methodist, we are focused on ensuring adequate staffing and ensuring staff have enough supplies and resources to keep them safe.

Mike Coggin. Executive Vice President and CFO of LifePoint Health (Brentwood, Tenn.): The national shortage of healthcare workers is a widespread and urgent issue impacting the industry as a whole. Since the beginning of the COVID-19 pandemic, many providers, nurses, clinical staff and other employees have left the workforce. This staffing shortage continues to put additional pressure on hospitals, including from a financial perspective, as they work to maintain services, bring patients back to their health system and continue providing high-quality care. 

Michele Cusack. Senior Vice President and CFO of Northwell Health (New Hyde Park, N.Y.): Even before COVID-19, healthcare demand was growing, and there was great competition for talent. That's become even more pronounced after the pandemic. The labor shortage is a real challenge, and we continue to evolve our strategies to mitigate the time to find and onboard talent successfully. Another challenge for CFOs across every industry is managing supply chain resiliency and inflationary trends.

Dennis Dahlen. CFO of Mayo Clinic (Rochester, Minn.): Selecting one issue from the many that exist is a challenge, but I would highlight the fragility of the healthcare workforce after 19 months of pandemic operations. Healthcare professionals at virtually all institutions, including Mayo Clinic, are physically tired and mentally weary. The contributing factors are well known and include the emotional toll of caring for critically ill patients with seemingly no end in sight; limited time off due to high patient volumes; added workload; and the challenge of vaccine hesitancy. We're also seeing staffing shortages in some key clinical areas. We're making appropriate adjustments to recognize and reward staff in this difficult environment and to continue attracting the best employees.

Lori Donaldson. CFO of University of California San Diego Health: The impact COVID-19 has had on our patients and their lives is like nothing I have seen in my 30-year healthcare career. The most pressing issue facing me today at UC San Diego Health is to ensure there is always adequate qualified staff to provide high-quality care to our patients across the region. In addition to patients with COVID-19 being acutely ill, many people across the country are postponing management of their medical needs such as cancer screenings and yearly exams. Overall, we are seeing a higher volume of patients who are also experiencing more illness. Since the beginning of this latest surge, our inpatient census is 5 percent higher and average daily emergency room visits are 6 percent higher than pre-COVID levels. Across the organization, this increase has put immense pressure on our staff and providers who have already been working long hours for extended periods of time. In addition to the strains on our clinical staff, our supply chain, environmental services, dietary, facilities and security teams have also worked continuously to prevent supply shortages, safely manage operating and patient rooms, and ensure the safety of everyone entering our facilities. 

​​Greg Hoffman. CFO of Providence (Renton, Wash.): Similar to the beginning of the surge, it is financial liquidity and stabilization. Our COVID-19 losses were greater than reimbursement from the Coronavirus Aid Relief and Economic Security Act, the Federal Emergency Management Agency and other programs entering into the delta surge. The current surge and labor shortage is exacerbating the situation. Our management team is actively managing all of these issues to ensure we have the resources available to not only address the spikes in COVID-19 cases but continue to serve our communities for a wide variety of healthcare needs.

Edward Karlovich. Executive Vice President and CFO of UPMC (Pittsburgh): I would say the most pressing issue for me is disruption. COVID-19 has done many things to disrupt the way we think about our organization and business. Some disruptions we faced in the last year include staffing and supply chain challenges. UPMC did a great job weathering through the supply disruptions and labor challenges. We always had adequate personal protective equipment for our folks here. We also really made a conscientious decision last year to keep our workforce intact; we didn't lay off workers, and we took care of people who needed time off because of COVID-19. We also made sure employees knew they had the support of our executive leadership team. In summary, COVID-19 has created a disruption, and we must think about how things are different now coming out of the disruption. 

Dominic Nakis. CFO of Advocate Aurora Health (Milwaukee and Downers Grove, Ill.): The most pressing issue is the stress on our team members and ability to staff and fill numerous open positions. Continuing to vaccinate more people will reduce the severity of future surges, lessen the strain on hospital resources and restore a much-needed measure of predictability.

The ongoing surge creates uncertainty that renders financial planning more difficult. While our overall patient volumes have rebounded nicely from 2020 as patients return for elective surgeries and other important care, COVID-19 continues to stress our operations and finances. The late-summer delta surge brought sicker inpatients who required longer lengths of stay, which contributes to increased expenses. We're seeing higher costs not just for drugs, personal protective equipment and other supplies, but also for labor, because attracting and retaining front-line workers becomes more difficult as the pandemic stretches on. 

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