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Healthcare CFO Perspectives on AI, Financial Sustainability, and More

The recent panel at the HFMA National Conference in Las Vegas in late June provided valuable insights into the current trends and challenges faced by financial professionals in the healthcare industry. Moderated by Norman Mosrie, the panel featured Michael Allen, Jana Cook, and Robin Damschroder, who shared their perspectives on financial management, technological advancements, and strategic partnerships.

AI and Automation in Healthcare

Michael Allen, CFO of OSF Healthcare, highlighted the cautious yet optimistic adoption of AI, particularly on the clinical side. He emphasized that while there is significant interest, tangible breakthroughs remain incremental. Automation, he noted, must effectively lower costs to be considered successful. By implementing new tools and methods, Allen targets a $200 million savings in margin repair, equating to 6% of their costs, showcasing the potential of AI and automation in healthcare.

Jana Cook, CFO of Phelps Health, discussed the smaller-scale adoption of AI in her county hospital. They’ve formed a governance committee to evaluate AI use cases, with current implementations like ambient listening and potential applications in revenue cycle automation.

Robin Damschroder, EVP, CFO, and Business Development Officer of Henry Ford Health, described AI as evolutionary, focusing on use cases for automation within finance and HR rather than clinical applications. She highlighted the skepticism about AI, and the importance of sharing lessons learned. As an example, they found that utilizing AI to support process change is more beneficial than using it for existing standard processes. Her goal is to reduce labor costs from 55% to around 48-49% of total expenses over the next few years.

Financial Sustainability

Sustainability efforts are a critical focus for all panelists. Michael Allen stressed the importance of continuous, steady work on margin improvement, focusing on productivity and supply costs. His organization holds weekly executive meetings and manages multiple projects aimed at significant cost savings.

Jana Cook drives margin improvement by engaging the entire organization. They address low-hanging fruit like supply costs, purchased services, and discontinued unprofitable service lines. Additionally, she highlighted the importance of investing in revenue cycle teams to enhance efficiency and collections.

Robin Damschroder mentioned the need for accountability and results-driven pilots. She discussed challenges in pharmacy management and the necessity to align pharmacy services with physician groups to ensure correct payments and reduce variation.

Legislative Adovacy and 340B Programs

The 340B Drug Pricing Program remains a focal point. Michael Allen noted no unique developments at OSF, while Jana Cook emphasized increased legislative advocacy at the state level to prevent pharmaceutical companies from blocking contract pharmacies.

Robin Damschroder hopes that Michigan will pass supportive legislation, as the pharmacy service line is crucial for its operations.

Value-Based Care and Partnerships

Value-based care is progressing slowly. Michael Allen discussed the difficulty in finding payer partners willing to create mutual incentives, whereas Jana Cook is partnering with Missouri Medicaid for a pilot program.

Despite the challenges, Robin Damschroder is doubling down on value-based care, stressing the need for resilience and the importance of cost scaling.

Strategic partnerships are vital for all three panelists. Michael Allen highlighted joint ventures when internal capabilities are insufficient, such as rebuilding hospitals and forming relationships with smaller organizations. Jana Cook emphasized partnerships to maintain independence and enhance services, while Robin Damschroder mentioned collaborations with Michigan State for research and a joint venture with Ascension for rehabilitation services.

Navigating the Complex Healthcare Landscape

The panel provided a comprehensive overview of the current trends and challenges faced by healthcare CFOs. AI and automation, financial sustainability, legislative advocacy, value-based care, and strategic partnerships are pivotal focus areas. The insights that Michael Allen, Jana Cook, and Robin Damschroder shared highlight the diverse approaches and innovative strategies employed to navigate the complex healthcare landscape.

In this time of shrinking healthcare revenues, Sixth Sense Intelligence’s mission is to help you use data to discover opportunities to significantly reduce costs and increase revenue.

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