Strategies evolve. Operations evolve. Leadership concepts evolve. That’s the circle of life in the healthcare industry. Ongoing changes can affect what healthcare leaders focus on from one year to the next. That idea might well be encapsulated in the differences between what the CFOs featured in this column in FY2022-23 cited as their suggested guiding principles and what those featured in the column this year had to say. Some principles often identified in the prior were absent this year, while other ideas came to the fore.
Changes since 2023
In the 2023 column year, the three most-mentioned recommendations were:
- Make collaboration between finance and clinical operations your priority.
- Be a teacher.
- Understand your business.
Clearly, these ideas continue to be important for healthcare leaders seeking to ensure their organizations are successful. From late 2023 through early 2024, leaders featured in this column, however, espoused other guiding principles that speak to broader considerations with relevance both inside and outside the organization, including:
- Be responsive and supportive of your finance team.
- Have passion and maintain a positive outlook, while leading with compassion and kindness.
- Build strong partnerships with all of your stakeholders and leverage all encounters regardless of with whom you interact.
Two items of particular interest this year that leaders cited could, if implemented, provide a substantial boost in financial outcomes throughout the organization:
- Maintain a laser-focus on the patient and the clinical care being provided.
- Create a culture of accountability.
Industry changes since 1975
To understand this shift in focus, I think of the more long-term evolution of healthcare financial management in the United States.
In my 49-years in this business, I have seen thunderbolts of change. Imagine starting your career in 1975, just nine years after the implementation of Medicare on July 1, 1966. Most of the industry was still adjusting to what it means to have government payers contributing fresh, new money for those patients who were elderly and/or poor — the very patients whose bills hospitals had been writing off for many years.
And for context, consider that hospital room-and-board charges back then were about $100 per day!a There was very little technology, and outpatient revenues made up a very small percentage of total revenues. Now, outpatient revenues can make up as much as 60% or more of total revenues in hospital operations.
The focus for change: Is it always what’s best for the patient?
So given that change is inevitable, what more can you as hospital financial and/or operational leaders do to maintain or improve your organizations’ financial outcomes?
It is an age-old and important question that has frustrated some and energized others. Are you struggling to formulate and execute strategies that will prove helpful over the next three to five years, or do you feel a real confidence that you can help your organization weather the storms brewing within the industry that threaten to wreak havoc within it?
My own recent personal experience gave me some unexpected insights, when I became a patient at a large hospital in a large health system. Speaking with one of the more experienced nurses, I asked her what kinds of changes she has seen in the past 25 years at the hospital.
After thinking about it for a minute, she said, “The biggest change I have seen and experienced is the clinical change from patient care to customer care. It used to be that we, as nurses and other clinical folks, practiced with strong hands-on compassionate care, prioritizing our time and attention to patients. Now, we have been told repeatedly that we must meet our goals for numbers and metrics, prioritizing high scores so that we look good on published local and national reports. This is not always positive for old-fashioned patient care.”
What a striking observation!
Now I must say that my patient care was outstanding. But as the nurse said, this new focus on customer care scores can impact the way we, as patients, are treated.
How many of you have had the “opportunity” to be customers in your own facilities? It might be a big eye-opener. It might even help leaders shift some of their current priorities. As some of the CFOs who shared their perspectives this past year, it is critical to maintain a laser-focus on the patient and the clinical care being provided.
One other point
As I lay in the hospital bed looking around, I was reminded of how we decide to allocate our monies and priorities, which can either make or break a bottom line. Waiting to be taken for a slew of laboratory tests, X-rays and CT scan, I observed that expensive hospital bed, surrounded by a variety of wires hooked up to an assortment of machines, and my mind rewound to the more than 20 years I was responsible for preparing or supervising all of the budget reports for four different hospitals that would determine what capital items would be approved. Millions upon millions of dollars would be expended, which would in itself determine what kind of medical equipment would be available for patient care — whether good or bad. An existential thought, for sure.
With this in mind, how well do you think you are doing for your organization, and what inevitable changes can you foresee to make improvements for the good of the organization and its patients?
You can make a difference.
Footnote
a. “Hospital costs forced up,” The New York Times, April 27, 1975.
Healthcare executives featured in Voices of Experience from September 2023 through April 2024
Richard Silveria, CFO of Cape Cod Healthcare in Hyannis, Mass.
William Rutherford, CPA, CFO and executive vice president, HCA Healthcare, Nashville, Tenn.
Theresa Mouton, MBA, Western Region CFO Steward Health Care, Tucson, Ariz.
Alan Lovelace, vice president and CFO of Stillwater Medical Center, Stillwater, Okla.
Brenda Chilman, system vice president and chief revenue officer, SSM Health, St. Louis Lisa Montman, CPA, senior vice president and CFO at HonorHealth, Scottsdale, Ariz.
Lisa Montman, CPA, senior vice president and CFO at HonorHealth, Scottsdale, Ariz.
