Chicago-based CommonSpirit Health’s California division is massive, with 29 hospitals and 125 ambulatory care sites. The division contributes $12 billion in annual revenue to the health system’s $40.1 billion, and has more than 1,200 physicians and advanced practice providers.
The health system’s California division met its financial and quality benchmarks last year amid big changes and disruptions. The secret to success? Going back to the fundamentals.
“It was really the blocking and tackling,” said Shelly Schorer, CFO of the California division of CommonSpirit Health, during an interview with the “Becker’s Healthcare Podcast.” “It was through literally disciplined, granular focus on our core operational and patient care metrics. We zeroed in on everything by meeting stringent quality standards, fostering our people and culture goals, to meticulously manage discretionary spend, optimize our labor force, and improve our revenue cycle and reduce length of stay.”
The team committed to daily tasks, which added to the overall health system’s success. Ms. Schorer tightened the revenue cycle and strengthened payer relationships.
“Payers are our revenue cycle partners,” she said. “We are having all of these conversations in every market that we have in California, and making sure that we understand all of the obstacles, which change.”
Further developing this relationship with payers to ensure sustainable financial viability will be one of the toughest things Ms. Schorer and her teams will tackle next year. They are focused on making sure they’re getting reimbursed for the care provided and all contracts are met.
“Payer relationships are getting more and more difficult,” she said. “They are becoming more sophisticated. We see many of the bigger payers using AI to manage claims, and we have to make sure that we’re technology-equal to them so we can manage and we don’t get behind in that space. That’s also expensive, but we need to grow our revenue cycle and make sure that we’re continuously reimbursed for the care that we give so we can outpace our inflationary pressures. Obviously, the inflation is outpacing reimbursement, so we have to be very careful on all of our spend.”
Those reimbursement rates aren’t just a financial metric; they’re fundamentally important for the health system’s ability to continue investing in patient care. It’s been a significant challenge for all health systems to modernize facilities and invest in the best technology because inflation on the essentials has risen so high. There are also more options for upgrades and technology is evolving quickly.
“When I started in healthcare almost 30 years ago, it was a simpler time and you could focus on two [investments] annually,” she said. “This is something we look at every day, every week, every month and it’s constantly moving and shifting and changing our vision to match what our pressures are.”
Health systems need revenue cycle teams with a clear understanding of their impact on patient care and tie responsibilities into the organization’s broader mission. The fast pace of change requires nimbleness and the continued technology integration will shift expectations in the future.
“I always say the revenue cycle is a living and breathing thing, and managing patient care is also really important,” said Ms. Schorer. “When you think about finance, we have to remember that patient care is the most important thing. But actually, good quality care leads to better financial metrics.”
Quality care and increased accessibility strengthen the health system’s reputation and lead to more business. To that point, Ms. Schorer said her most important initiative was making sure everybody understood the factors driving clinical and financial performance so they can follow the right metrics and pull the right levers for improvement.
“We were very lucky last year. We hit all of our goals in every single one of those facets,” she said.
Next year, the landscape will look different as health systems face significant headwinds.
“Healthcare is in a really challenging space right now, and we’ve been here before,” she said. “We’ve been through the Balanced Budget Act. We’ve been through the Affordable Care Act, the changes to how we got paid in the 1980s. We know what this is like, but today seems a little bit more complicated. We have the legislative challenges of HR-1, the One Big Beautiful Bill Act. We have persistent inflation that really is outpacing our revenue cycle and our reimbursement. Trying to manage that dichotomy is always challenging.”
Coupled with the continued labor shortages and ongoing clinical strife, health system leaders are seeking innovative strategies and new ways to model patient care, at the hospital and outside of it. The lack of post-acute placement options is pressuring hospital capacity and leaders are seeking a long-term fix, not a bandaid.
“It’s imperative that we remain incredibly engaged, highly strategic and relentlessly innovative,” said Ms. Schorer. “What that means to me is constantly exploring new models of care and forging strong, impactful partnerships to navigate these complexities successfully, and thinking about the way that we deliver care differently.”
