Hospital and health system CFOs are grappling with a host of challenges, ranging from increasing labor costs to volatile patient demand and reimbursement rates that aren't keeping pace with inflation.
During an October webinar hosted by Becker's Hospital Review and sponsored by Multiview Financial, a panel of health system CFOs discussed financial challenges at their organizations and strategies they are using to address these challenges. Panelists were:
- Lynn Dejaco, EVP/CFO, Erlanger Health System in Chattanooga, Tenn.
- LuCinda Rider, chief financial officer, UHS Delaware Valley Hospital in Walton, N.Y.
- Michele Forgues-Lackie, SVP/CFO, UW Medicine Valley Medical Center in Renton, Wash.
- Jeff Wakefield, chief financial officer, UNC Lenoir Health Care, in Kinston, N.C.
Four key takeaways were:
- Recruiting and retaining quality staff is a top priority. The competition for healthcare talent isn't just from hospitals and health systems. Insurance companies and other businesses are now recruiting nurses for work-from-home positions. Filling open positions with contract labor and travelers is an extremely expensive alternative.
To tackle this issue, UHS Delaware Valley Hospital has developed unique initiatives. "We proposed to our staff that we would pay them a higher wage, as long as all of our schedule holes are filled," Ms. Rider said. "Employees understand this is a temporary solution, but it's a way to put more money into our communities, rather than giving it to a travel agency. We've been pretty successful thus far and haven't had to hire any traveling nurses."
UNC Lenoir Health Care, on the other hand, has had limited success with an internal traveler program. "I worry that once you start paying people more, how can you go back from that? In addition, we can't pass increased costs on to our customers," Mr. Wakefield said.
- Hospitals and health systems are analyzing other expense categories. Erlanger Health System recently created six task forces to evaluate spend categories across the organization. "Our supply chain team isn't afraid to embrace new ways to recover and save money. They worked with a company called the GSO, which stands for Group Savings Organization, and negotiated millions of dollars in savings," Ms. Dejaco said.
- To prevent hospital readmissions that impact reimbursement, health systems and community organizations are partnering. UW Medicine Valley Medical Center, for example, is focusing on social determinants of health. "Once people are released from the hospital, they will be readmitted if you can't get them shelter, food or medications," Ms. Forgues-Lackie said. "We are partnering with community organizations to address these issues." UHS Delaware Valley Hospital has also conducted advisory boards with community members to understand their pain points, such as food insecurity or a lack of transportation.
- Good relationships with payers are a first step toward closing reimbursement gaps. When organizations have open and communicative relationships with payers and build arguments with data, they are in a stronger position to effect changes in reimbursement. Erlanger Health System has a dedicated payer relations team and the organization recently conducted a payer assessment to identify a good baseline for negotiations. "We're willing to come to the table and present ideas about how to meet in the middle," Ms. Dejaco said.
Now is the time for teams to think differently, cross lanes and collaborate to create savings opportunities. "It takes guts and an open mind to look at things in a new way," Ms. Dejaco said. "In this environment, you can't keep doing the same things and expect different results."
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