Read about 5 top challenges and market changes that hospital CFOs are talking about and learn how your organization might confront them, too.
At the HealthLeaders CFO Exchange held in New Orleans, La., last month, I was able to join a select group of Chief Financial Officers gathered to network and share their perspectives on some of the most pressing issues in healthcare.
During this two-day, invitation-only event, my conversations with this group of 40 CFOs provided me with insight into the following challenges they are facing:
1. Confronting the Medicare Population Shift
In the days leading up to key primaries and general elections in the U.S., Medicare related policy will continue to put pressure on hospitals, who are already experiencing higher volumes and a larger portion of Medicare patients in their payer mix.
868彩票邀请码CFOs know that “Medicare for more” is coming, based on demographics and the aging of our population. According to the U.S. Census Bureau, in the next 10 years, all baby boomers will be older than age 65. We also know that fifty-percent of Medicare patients have more than four diagnoses.
For most CFOs, the challenge of serving the Medicare population is already front and center, affecting much of their business. Unless reimbursement rates are materially improved, increased Medicare volumes will only further challenge hospitals operating on already slim margins.
2. Demand to Better Understand Cost
868彩票邀请码CFOs say that understanding costs will be key to their strategy moving forward. Today, many providers use legacy systems for cost and margin analysis. These systems are difficult to maintain and may not produce accurate, actionable data.
868彩票邀请码As hospital leaders look for ways to protect themselves against challenges that may hurt their margins, they need cost data they can trust to make ongoing strategic and day-to-day decisions. It will be very difficult to take on more risk without that information.
3. Changing Market Structures
Other potential challenges on the radar include the future of the 340B Pricing Program and oncoming federal legislation on Surprise Billing. Competition for healthcare providers is changing from the inpatient or outpatient level to the “middle” of the continuum, with imaging, labs, and ASCs.
The market structure of healthcare is changing. CFOs are having ongoing conversations around whether providers should become insurance companies, or if they’ll even have the capital to do so.
4. Growing Reliance on Information Technology
Hospital IT departments are adopting new systems and applications as their organizations grow. For healthcare providers to access the best practices and tools, they need scale. For CFOs, managing data has become a higher and more difficult priority.
868彩票邀请码The way patients want to use technology as part of their healthcare experience is changing, too. CFOs are talking with each other about how to prepare and provide the best care.
While older patients generally prefer a relationship with their primary care physician, many younger patients do not. These patients would rather download their healthcare like a smart phone app, or text with their physician to share vitals.
5. Challenges for Rural & Community Health
868彩票邀请码Hospital CFOs at smaller hospitals in rural communities are facing their own unique challenges. With so many rural patients uninsured, getting reimbursed for services like providing use of an ambulance can become problematic.
Rural areas also struggle to attract patients, especially if the rural hospital loses coverage of a key specialty service like obstetrics. Yet attracting physicians to these hospitals can be difficult, too, especially in markets that support only one physician per specialty.
Driving Success on Organizational Imperatives
868彩票邀请码Regardless of when or how these policies will affect hospitals, CFOs say their key directives remain the same: drive down cost, improve quality, expand access, and continue to prioritize the patient experience.
For me, these strategic priorities aren’t surprising. At Strata Decision Technology, we partner with over 200 health systems and more than 1,000 hospitals across the country. I get to see firsthand the noble work that hospitals are doing to advance their organizations in these areas.
My takeaways from conversations with 40 CFOs represent a few “points of light” among many. But we know that they align with conversations that leaders are having at hospitals and health systems across the country.
Hospital CFOs are working to refine their definitions of success and getting deeply involved with operational leaders. To drive success on key imperatives, finance and operations leaders will need to adopt the right skillset and mindset to enact change, in addition to using powerful toolsets.
At Strata Decision Technology, we work with a network of organizations on the same journey. And we know how to help.
Brian Groves is Vice President, Business Development, Strata Decision Technology