Usual approach 'not enough': 8 healthcare execs rethinking financial health

Health system executives are making innovative and transformational moves to improve the financial health of their organizations. They're intentionally pushing teams to think outside of the box for new solutions to old problems, and seeing positive results.

"Margins for hospitals have been declining steadily, particularly for academic medical centers," said Steve Davis, MD, president and CEO of Cincinnati Children's. "The usual approach of controlling expenses, reducing or delaying large scale projects, and looking to add value to a fixed expense base are either not enough or not effective for many."

C-suites are zeroing in on a variety of areas to cut costs, add revenue and tackle labor shortages to improve the financial health of their enterprises.

Tech investment and optimization

Digital transformation accelerated during the pandemic as the need for quick innovation soared. Virtual care and sophisticated patient engagement tools are now standard for most healthcare organizations. Further investment in artificial intelligence, machine learning and automation can make clinicians and administrative teams more efficient while also lowering burnout.

Cincinnati Children's is piloting the use of ambient technology for real time transcription instead of using scribes. The technology could reduce clinician documentation time so clinicians can spend more time with direct patient communication, which may then improve quality, safety and patient experience.

Spending more time in direct patient care can also reduce clinician burnout and "have real financial benefit," said Dr. Davis. He went on to note, "Healthcare is the only industry that has not seen gains in productivity over the last several decades; however, I believe we are on the cusp of significant gains."

Expanded access to quality care

Svetlana Lipyanskaya, CEO of NYC Health + Hospitals / South Brooklyn Health Ruth Bader Ginsburg Hospital, is focused on improving access to patient care and growing its population to boost the hospital's financial health.

"Access to care is a really big issue, and for us in particular, because we're public health and we have this mandate to serve our community. We're really trying to ensure we have as much access as possible for the patient at the right level of care and at the right time," said Ms. Lipyanskaya. "We want to make sure that if a patient could access primary care, then they won't need to come to our emergency room, and they won't need to be hospitalized, so we can provide that service at a much lower cost."

Reducing hospital-acquired conditions will also help lower costs, avoid lengthy hospital stays and provide better care for patients. The hospital recently celebrated one year without a catheter-associated urinary tract infection, a feat that took a lot of "small actions" by the entire staff focused on better patient care.

"There's a clear understanding that harm in any way to a patient is an incredibly expensive proposition, and that is something we certainly want to avoid," she said.

Revenue cycle management

Optimizing revenue cycle processes and avoiding denials can have an immediate effect on the enterprise's financial health. Technology to automate certain functions improves accuracy and identifies areas where additional human touch is needed for a smooth revenue cycle. Revenue cycle leaders can then focus on strategic initiatives and contract negotiations.

"We're focusing on making sure that we bill for everything that we can bill for, and that we're maximizing revenue and that we're actively managing expenses," she said. "There's no real secret to that. Those are the things that everybody does every year. As the financial situation ebbs and flows, you tighten the belt or loosen the belt. But I think that right now in the situation that we're in, we're just trying to maximize every potential dollar that we can from both the revenue and expense side."

Sandra Scott, MD, interim CEO of One Brooklyn Health, a safety-net hospital in New York, is also working on tightening revenue cycle and collection processes. The system is using work cues and data from its Epic platform to provide feedback for management and leadership on the revenue cycle, including the length of time from service delivery to billing; even an extra day or two equates to lost revenue.

"The other opportunity for us to make sure that our revenue cycle is tight and that everyone who touches the revenue cycle, from the clinical staff all the way to those on the back end taking care of getting the claims out of the system, knows their role and that it's an efficient workflow," said Dr. Scott. "We use the dashboards that are available to us to have confidence that we're getting our bills out in a timely fashion so that we can maximize the revenue there."

Bill Pack, CFO of Conway (Ark.) Regional Health System, has a similar focus on the balance sheet and is looking ahead to future payer contract negotiations.

"[We are] preserving cash as much as possible, which requires a delicate balance between maintaining a healthy balance sheet and pursuing strategic investments, which will grow our health system," said Mr. Pack. "Keeping a laser focus on cost control and renegotiating payer rates are an absolute must in the current environment in order to achieve the balance of savings and investment."

Lowering labor costs

Making gains on the revenue side is important, but won't improve the financial health if costs remain higher. Airica Steed, EdD, RN, president and CEO of Cleveland-based MetroHealth, said the system has grown revenue "leaps and bounds" in the last year, but the growth is outpaced by labor costs due to inflation, shortages and a need for premium labor.

"[We're] really rectifying our workforce labor shortfalls and challenges, which is the single most thing that keeps me up at night that we're focused on to address the finances," she said.

MetroHealth has also embarked on a $150 million financial and operational transformation to find cost and workflow efficiencies as well as continue to enhance revenue to balance out the cost equation. The system also has a focus on clinical transformation to boost care delivery processes and provide more access to ambulatory care.

"We have a 10-point financial and operational transformation plan that seeks to drive margin improvement, which is the balance of cost efficiencies and revenue improvement," Dr. Steed said.

Rob Wolterman, CEO of New Orleans-based Ochsner Health's south shore region, is focused on reducing nursing agency expenses, and his team's efforts have paid off. The system dropped nursing agency spending by nearly 55% last year and hopes to achieve another 50% reduction by the end of March.

Targeted growth

Targeted growth can also build back up a hospital's financial stability. Alisa Starbuck, vice president of women's and children's health services and executive director of Winston-Salem, N.C.-based Brenner Children's Hospital, part of Atrium Health Wake Forest Baptist, has had many talks with her team about expenses, staffing and financial challenges; now she is setting her sights on targeted growth.

"How do we grow? Where is it purposeful? How do we hold ourselves accountable to that not just overall growth, but really purposeful growth that will generate revenue to cover some of the expenses?" she told Becker's. "The staffing, traveler, contract labor: to balance the expense growth, we have targeted reducing that. Now the challenge will be, how do we retain those staff that have been able to backfill into those positions?"

Mr. Wolterman is also looking at growth, specifically in the outpatient setting. In the last year, Ochsner grew 9% to 12% in most outpatient areas and he said the system needs to continue seeing double-digit growth there.

Growth sometimes also means bringing in new revenue streams and capitalizing on strengths. Helen Margellos-Anast, president of Sinai Chicago and Sinai Urban Health Institute is focused on diversifying their funding portfolio to identify areas where the hospital excels, such as training community health workers, and conducting culturally relevant evaluation, and marketing packages to others who could benefit from the expertise as an opportunity to bring in additional revenue.

"We've been focused on how do we bring additional partners who have ceratin needs and want to support health equity initiatives, and how do we package what we can do and partner to support our financial needs and the wellbeing of both SUHI and Sinai, our parent organization, while also supporting them in their goals," said Ms. Margellos-Anast.

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