CFO Ben Spence on Lee Health's transformation

Ben Spence serves as chief financial and business service officer of Fort Myers, Fla.-based Lee Health.

He's responsible for financial functions and performance at the system of four acute care hospitals and two specialty hospitals. Other responsibilities include development and execution of long- and short-term financial plans, facilities management, financial services, data analytics, information services, physician compensation and revenue cycle management.

He's previously served as system director of reimbursement, controller and CFO of Lee Health's community health clinics.

Here, Mr. Spence shares one of his proudest achievements as Lee Health's CFO, discusses the system's financial strategy and offers advice for other hospital finance chiefs.

Note: The following responses were lightly edited for length and clarity.

Question: What has been one of your proudest moments as CFO?

Ben Spence: I'm really proud of the recent upgrade of our credit rating by S&P Global Ratings to an A+. This is important because it reflects the consistent financial results that we've had over many years and provides access to great rates in the capital markets. Despite all the external revenue pressure and challenges with growing cost and at a time when we are making significant strategic capital investments, external agencies view us as a strong financial organization.  That is a great reflection on our entire leadership team and their commitment to strong financial results.

More important than any one moment is the transformation movement our system is going through, of transformation from a hospital-centric repair center to an integrated system of care delivery.

Historically, we've always been viewed as a hospital, and our focus now is on improving the way we deliver care across the entire continuum of care.  We have made significant achievements, especially in the past year, where we're helping to better coordinate care by identifying health risks of our patients that require follow-up or interventions to help keep them out of the hospital.

Within the hospital setting of care we have experienced significant health outcome improvements, though, by applying best practices to prevent hospital acquired conditions and creating a safer environment of care.

Through our care delivery system, we are elevating our focus on creating an exceptional experience for our patients, their families and our workforce. For these reasons, our transformation movement is what I believe as the CFO of Lee Health that I am most proud of and will position us to succeed in this new era of healthcare. Our financial performance is an outcome of excellent performance on these top system priorities.

Q: What is one unique challenge hospital CFOs face today?

BS: I think the most common challenge for CFOs today is the uncertain reimbursement rates that we'll receive in the future. We have growing pressure from the payers that pay our bills and reimburse us for care. For our largest payer, Medicare, we know that that program is running out of money by 2026, and so with that, they are passing on rate reductions to us. And navigating through that challenge of low reimbursement while we're trying to make an operating margin, it's a real challenge to manage costs within that revenue growth.

Q: How does Lee Health work to overcome this challenge?

BS: We really take a balanced approach to it. We know these pressures are not going to go away anytime soon, and we must have a plan that includes not only cost effectiveness and efficiencies but also healthy revenue growth. Even though we're getting rate reductions from major payers, there's still an opportunity to make sure our payments are accurate through improvements in our revenue cycle, through improvements through our clinical documentation and coding. There are opportunities to increase patient preference for Lee Health services by providing an exceptional experience and excellent health outcomes.

We're also looking at ways to diversify our revenue. Knowing the traditional reimbursement systems will continue to threaten our rates, we are entering new payment models. With Medicare, they have the next generation accountable care organization that we entered in 2018, where you can get rewarded if you're able to lower Medicare's overall spend beyond a target that they've established. In the first year, we've been successful on that effort, and it's helped us to offset some of the rate reductions that we're experiencing in fee-for-service revenue. So, we'll continue to look at ways to diversify [revenue] because we think that's an important way to offset some of the rate reductions.

On the cost side, we're doing focused initiatives that revolve around standardizing to best practices, reducing clinical variation and operational variation and deep focus reviews on top expense items such as surgical procedure supplies. For the same type of procedure, we found we were using many different supplies for different physicians. We established processes to make the cost transparent and identify areas of opportunity to reduce unnecessary variation. By engaging physicians and clinicians to review the data and help to standardize procedures, we are creating a much more cost-effective and efficient operating room that will help ensure the right supplies are there at the right time and at the right costs.

Q: What philosophies, events or people influence your leadership style?

BS: The most influential person in my life was my father, Park Spence, who passed away a couple years ago after a long, wonderful life.  He was a role model for me of not only a great father but also of a business leader. He was the type of leader people admired because he had great business insight, focus and discipline, but equally as important was how he treated people with great care and respect. He had a way of encouraging those around him to bring out their very best, and his warm smile helped bring up spirits when challenges were intense. He gave me a paper on "commitment" that I will never forget. It stated that "commitment is the words that speak loudly of intentions and the actions that speak louder than words." His life example helps me daily to strive to bring out the best in myself and all those I interact with.

Q: How did you creatively solve a problem in a previous or current position? 

BS: For many years, we saw patients in our emergency room at a high rate that were uninsured and had no access to primary care services. And as we brought on a new leadership, we talked about the opportunity to provide primary care services to those who don't have the ability to pay through primary care clinics that operate as federally qualified health clinic lookalikes.

We were able to open four clinics that serve the patients that didn't have access to care because of their lack of insurance and their inability to afford insurance. And these community healthcare clinics have been successful for providing care on a timely basis and in an appropriate setting and at the right cost for people who otherwise would be seen in the emergency room at a high cost.

That was one example of a creative solution to a problem that initially was thought of as something we couldn't afford to do because of the cost of providing primary care. But in the end, it costs less when you reduce your ER utilization and provide care in a lower-cost setting.

Q: Last year, Lee Health scaled back raises and hiring due to margin declines. What did that entail, and what other efforts has the system made to improve its financial picture?

BS: Last year, we faced a reduction in inpatient volume that put significant pressure on our revenues coming in the door. Late spring, we decided to evaluate and hold on hiring any new positions before we fully evaluated the need for all the positions because of the financial pressures and the opportunity to look at positions  that we had not yet filled that maybe we wouldn't have to. That was helpful.

We still hired people. We still brought in new staff as well and new positions. But it gave us a time to assess what the organization truly needs, and as a result we were able to come up with ways to work more productively, more effective and efficiently, that carried over into fiscal year 2019 other initiatives that we've undertaken and are starting to undertake.

One [initiative] is to improve the patient flow to avoid delays in discharge. That's a project that's just now getting started, but it has a lot of opportunity. We've looked at different drug utilization. We found that some drugs we were providing through IVs could be administered orally at a fraction of the cost.

And as we look at best practice, we realized there was no need to give it through IVs if you could do it effectively orally, and that saved millions as well. We also opened up a new facility in south Lee [County] that has helped to bring in new patients to the system. So right now, we're doing quite well. We're exceeding budget and are projected to continue to do well.

Q: If you could pass along one nugget of advice to another hospital CFO, what would it be?

BS: My advice would be to take time to really listen to the front line and to your managers, to listen to their ideas of how to improve. I firmly believe the change we need to facilitate in healthcare today is going to have to come from those who are doing the work.

As senior leaders, we need to help remove the barriers they have and support the improvement they bring forward. When we take time to listen to them and to empower them to make a change rather than the traditional top down command-and-control CFO role, I think there's a lot more we can accomplish in that method than the other.

 

More articles on healthcare finance: 

New interactive tool offers roadmap for using alternative payment models
Congress takes up surprise medical bills: 7 things to know
AHIMA, AHCA to prepare skilled nursing facilities for reimbursement changes

 

 

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