From supporting operational and finance staff to starting new capital projects, eight CFOs from top health systems across the U.S. recently spoke with Becker's Hospital Review about their top financial priorities heading into 2022.
Editor's note: Responses were lightly edited for length and clarity.
Kevin Burns. Executive Vice President, CFO and Chief Business Officer of Houston Methodist: Houston is a growing and thriving community, and we are blessed to be in a growing market. As a result, one of the financial priorities is adequately positioning ourselves in the market we serve. We have a strategic capital investment plan, which involves making sure we are in the right market locations and are making investments accordingly to best serve this community.
In terms of capital projects to support this growth, we are working toward approval of a new tower in the Texas Medical Center. It would replace an older building and establish a comprehensive modern tower with expanded imaging services, as well as other inpatient and outpatient services.
Mike Coggin. Executive Vice President and CFO of LifePoint Health (Brentwood, Tenn.): First, we are staying sharply focused on the things we can control from a financial perspective, including being disciplined about cost management and ensuring an efficient capital structure. Despite the challenges we faced throughout the pandemic, LifePoint is committed to expanding access to care for patients and seeking strategic opportunities to grow as an organization. With our pending acquisition of Kindred Healthcare, we will further diversify our business and expand our footprint in the postacute space. The transaction brings together LifePoint's national network of community-based hospitals, providers and access points with Kindred's expertise in delivering postacute care and behavioral health services. We look forward to being better positioned to respond more comprehensively to patients' needs across the healthcare continuum.
Additionally, we are focusing on driving innovation and transforming the company's approach to digital health. This includes investing in technology-enabled solutions to further improve quality, access and patient outcomes while lowering costs. As part of this, we are developing and expanding meaningful partnerships with companies that are helping to expand our capabilities to better serve our patients.
Michele Cusack. Senior Vice President and CFO of Northwell Health (New Hyde Park, N.Y.): We are looking to take advantage of what has become the new normal. That includes retaining our organizational flexibility seen during the peak of the pandemic. This includes having staff be able to work remotely when possible. This sort of balance plays a role in our ability to attract and retain talent.
Dennis Dahlen. CFO of Mayo Clinic (Rochester, Minn.): We're at the front end of a significant initiative at Mayo Clinic to transform the way our administrative and business support operations — including finance — strengthen our education, research and clinical practice operations. The required lift of that work is considerable and will consume significant effort in 2022 and beyond. A companion to that work is supporting Mayo Clinic's 2030 "Bold. Forward." strategic plan, which involves considerable investments in technology and new platforms, digitizing clinical practice, and finding new cures and treatments for current disease states. These investments rely upon effective strategic planning to ensure they all fit together in a risk profile that is acceptable, with consistent performance to sustain the investment levels and careful stewardship of resources. I share responsibility for all of them.
Lori Donaldson. CFO of University of California San Diego Health: COVID-19 made it clear to many CFOs how quickly the financial performance of a healthcare system can be immediately impacted when public health orders require the shutdown of many clinical services. Our most important financial priority is to ensure adequate cash reserves to sustain the delivery of care during the pandemic and to continue to support the tripartite mission of the only academic health system in the San Diego region. Like most health systems, UC San Diego Health lost revenues and incurred expenses that were not fully recovered through federal or other external funding sources. This resulted in the delay of several capital projects that will address our capacity limitations through expansion of our ambulatory locations throughout the region to better serve our patients. In addition, continued improved financial performance is necessary to build cash reserves to support debt capacity for our Hillcrest redevelopment and other strategic investments.
Our second top financial priority is to redesign our funds flow among the three missions of UC San Diego Health. Changes to the Medicare Physician Fee Schedule and the effects of COVID-19 have impacted the benchmarks we use for physician productivity and compensation. New value-based payment programs are also driving the need to reevaluate the principles and mechanics of our funds flow model. In May 2021, we launched a multidisciplinary initiative we refer to as "strategic alignment" to evaluate and make recommendations to modify our funds flow to ensure the future model is simpler and transparent, supports margin growth, aligns with our strategic priorities and supports all three missions of the university.
Greg Hoffman. CFO of Providence (Renton, Wash.): We are looking at it both in the short term and long term. In the short term, ensuring that we remain resilient to handle any future complications, whether future variants or other macroeconomic factors. At the same time, ensuring we maintain the well-being for our caregivers while also addressing many health needs in our communities that have accumulated or been deferred while addressing surges. In the long run, it is continuing to lay the roadmap for our Destination Health 2025 strategy by smartly investing in growth, modernization and diversification.
Edward Karlovich. Executive Vice President and CFO of UPMC (Pittsburgh): From a financial perspective, we want to maintain a positive margin to support our capital investments and employees. To do this, we are focused on a few things. First, supporting our operating employees to ensure they can perform to the best of their ability. They are the ones who make the difference each and every day. Second, we want to make sure we, as a finance team, can provide the things that the organization needs to be successful. This includes, but is not limited to, making sure supply chain folks can get all needed supplies and ensuring we have the cash collections needed to fund our organization. Another priority is making sure we provide the advice and guidance needed to invest our dollars effectively so we can prepare for the next challenge.
Dominic Nakis. CFO of Advocate Aurora Health (Milwaukee and Downers Grove, Ill.): We are focused on supporting the execution of our three-pronged strategic plan to drive best-in-class results in safety, health outcomes, growth and affordability; improve our consumer experience; and develop new care models and consumer-facing businesses to serve people's broader health and wellness needs. These areas of focus will support our drive to sustain positive operating margins and support our desired strategic investments and capital expenditures related to our Transformation 2025 strategic plan.