Hospital and health system CFOs are navigating complex financial industry challenges while also working to position their organizations for sustainable growth.
From fine-tuning expense management to investing in technology and select service lines, leaders are taking both long-term and immediate steps to strengthen their bottom line.
Becker’s connected with CFOs at NKC Health, MyMichigan Health and LMH Health to discuss the key financial decisions that have made the greatest impact in their organizations over the past year, and the advice they would give to peers stepping into the role today.
Question: What’s one financial decision in the past year that has strengthened your organization the most? How?
Austin Jones. Senior Vice President and CFO of NKC Health (North Kansas City, Mo.): Many of the financial decisions we make often take more than a year to materialize, as with healthcare, so much of our strategy moves in a 2-3 year time frame from conception to results showing up on the [profit and loss] or balance sheet. But if we were to reflect on what has been a catalyst for financial improvement, it would be the result of service line investments that were made 2-3 years ago and in the short term, an intense focus on labor and purchased services. The profitable growth came from strategic investments we made in people and equipment, coupled with expense management improvements driven by daily focus on premium pay and a detailed review of the thousands of vendors we use.
Michael Rose. Senior Vice President and CFO of MyMichigan Health (Midland, Mich.): With an aging population driving incremental demand, we focused on expanding access to care. This included a broad array of initiatives:
Imaging: Additional capacity through new MRI and CT scanners, expansion of operating hours and scheduling redesign.
Surgical services: Maximize operating room utilization, open new ORs, expand pre-op and recovery.
Access dashboard: Real-time measurements on appointment lead times for every point of care.
Primary care expansion: Added capacity to meet existing demand.
Emergency department throughput: Focus on reducing throughput times to lower walkout rates, as well as expanding physical capacity.
Rob Chestnut. CFO of LMH Health: We have implemented a more robust process to review all of our inpatient coding over the last year. As a result, we have seen an improvement in our denial rate and improved reimbursement on our inpatient cases. Our providers are more engaged in understanding coding and its impact on health system sustainability.
Q: What advice would you give a new hospital or health system CFO entering the role in today’s environment?
AJ: I would advise a new CFO to truly understand his or her business. Get into the details of where you make money and lose money. Having a background in Catholic healthcare, the Sisters were not shy to remind me that there’s no mission if there’s no margin and in order to fund the mission, we have to know where the margin exists and lean into the profitable areas so that we can fund the loss leaders. I’d also advise new CFOs to get into the weeds of their claims. Don’t just assume the payers are paying you according to contract and don’t settle for anything less.
MR: Transparency and engagement are critical. Communicate and illustrate long-term challenges. Provide an overall framework for meeting those challenges. Track progress against key performance measures. Try to stay out of the weeds and trust that operational leadership will respond to your overall direction/vision. Be prepared to make difficult decisions on deployment of limited resources.
RC: There are more challenges to address than time to address them. It is important to assess your priorities and spend your time on objectives that have the most benefit. It is very easy to get sidetracked on the issue of the day. Finally, trust your staff. They typically have great ideas that are just waiting to be implemented.
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