While no one has a crystal ball for answers, Becker’s connected with health system CFOs to discuss how solutions like leveraging automation and alternative payment models can help address certain pressures to ensure long-term industry success.
Question: What is the million-dollar question facing CFOs in 2025?
Editor’s note: Responses have been lightly edited for clarity and length.
Travis Crum. CFO of Bon Secours Mercy Health (Cincinnati): It’s endemic across the industry that margins have been significantly compressed coming out of the COVID pandemic. I think the question of how organizations chart their path back to solvency and sustainability is an important one. We ultimately want to ensure that patients sit at the center of those decisions, and we recognize that if reimbursement isn’t sufficient, that it does raise a question of vitality, vibrancy and ultimately constrains the healthcare system’s ability to be able to deliver on the care that we need. I think solvency is a key question. I also think —as we think about balancing changing reimbursement models, so fee for service, value-based care, and how to ensure that we have a sustainable margin in both of those payment regimes — I think it’s going to be important.
Lisa Goodlett. Senior Vice President, CFO and Treasurer, Duke University Health System (Durham, N.C.): Talking with my peers, and I’ve got a wonderful cohort of that, we’re really trying to figure out what steps the administration is going to take next, and how do we anticipate that and have our various enterprises ready for change. Coming out of COVID, margins are starting to improve, but we see a lot of threats on the horizon or risk to our federal reimbursement, and also what could trickle down to the state levels with that piece.
We track what’s going on through our governmental affairs officers, talking to peers and then, where do we put our voice? Where do we say no? Oftentimes it’s understanding the details behind the program and the benefits that a health system serves so much in a community, beyond just taking care of people, beyond being an employer. There’s a lot of situations where we’re adding value and if we weren’t in that space, or if we don’t have the ability to fund a lot of the charity work, the community work that we do, America would be a much different place. We just need to be vigilant in talking about that. We need to be fruitful with our funding, pay attention to our funding, make sure we’re using it in the most appropriate mechanism. But the health system is such a complicated, valuable asset to so many communities across the nation, how do we do this in a fair and appropriate way?
Susan Green. Executive Vice President and CFO, Sharp HealthCare (San Diego): Right now, [it’s] is my funding going to be cut, because we are in uncharted territories, but we won’t get political in this. I think that’s probably the No. 1 thing on people’s minds.
[Additionally], I do believe it is the cost of inflation outpacing reimbursement, and how are we going to transform? Here at Sharp, we are so focused, we’re highly capitated for our patient population, meaning we get paid per member per month to do everything that we need to do to care for our community. So it sets up a very different incentive and dynamic and I think it’s one of the best systems as it relates to population health management. So I think alternative paid payment models are the only way we’re going to transform and reduce our cost structure.
Ivan Samstein. Enterprise CFO of University of Chicago and UChicago Medicine: To me, the million-dollar question above all else, and I suspect at least nine out of 10 of us on a panel would say the same thing is, what are the policy changes? How are they going to affect these governmental insurance programs? How are they going to affect 340B? How are they going to affect hospital outpatient department that many hospitals rely on to provide certain complex services in an outpatient setting, but are connected to their hospital. I think that the government plays such a large role in U.S. healthcare and U.S. healthcare finance, so it’s hard to say the million-dollar question is not related to understanding how all these pieces are going to fit together and shake out over the next 12 months or so.
Paula Tinch. CFO, Penn State Health (Hershey, Pa.): I think it’s what is going to happen with reimbursement, and how do we continue to make investments that we need to make for the healthcare system and for our patients, in a time where those things are more costly to pay for, but we need to drive down costs in the healthcare system in total. So how do we strike that balance, so that we’re here for the long haul and that we’re here for our communities and our patients for the long haul, but we’re also taking advantage of all of those new technologies, all of those new pharmaceuticals that come on the market. Nothing is inexpensive, for sure. So, how do we create that flywheel while we’re trying to lower costs without taking away from the core reason why we’re here?
With healthcare, labor is the biggest cost. The labor and the infrastructure structure is the biggest cost. It is making sure that we are lifting those barriers to have our teams be able to deliver the care at the top of their license, so that they can be more efficient [and] take care of those patients. We can remove some of those barriers and figure out how to automate them, how to carve out some of those obstacles so that you don’t need as much to do more. Again, behind the scenes, because the caregivers at the front line, you want them to be able to focus on that patient care. It’s not necessarily a new strategy, because that is healthcare. I just think it’s something that we have to continue to refine and build on and get better at. And there’s always opportunity.
