The recent Alabama HFMA Conference brought together healthcare CFOs from urban and rural facilities. These CFOs shared their insights into healthcare finance and operations, covering financial performance, labor challenges, cybersecurity, and value-based care.
DCH Health System’s Volume Growth and Financial Performance
Bob Tracz, the new CFO of DCH Health System, reported increased surgical and emergency department volumes, with stable outpatient volumes. Financially, after a few challenging years, this fiscal year shows promise due in part to reduced agency staffing. Despite improved outpatient margins, optimizing expenses remains crucial .
Labor challenges persist, especially around registered nurses (RNs) and certified registered nurse anesthetists (CRNAs). Tracz’s institution uses up to 150 traveling nurses, and is making efforts to minimize this reliance. Recent initiatives highlighted a scheduling system that matches staff availability with open slots implemented by DCH Health System’s Chief Operating Officer (COO). However, recruiting new and replacement staff remains challenging, even in non-clinical areas like finance.
Regarding cybersecurity, Tracz noted DCH’s minimal impact from the Change Healthcare breach. Their Chief Information Officer (CIO) will shut down systems during breaches. Although the Change Healthcare breach did not have significant impact on DCH’s claims, their lockbox was impacted severely. Routinely now, they score vendors on risk, avoiding those with a poor rating as a preventive measure.
In terms of value-based care, DCH Health System collaborates with local employers focusing in on quality metrics and cost structures.
Huntsville Hospital System’s Financial Recovery
Clinton Carter, moderator for this panel and CFO of Huntsville Hospital System, emphasized their slow but steady financial improvement encapsulated in their motto, “Stay alive to FY25.” This reflects a cautious optimism and a focus on long-term stability.
UAB Medicine’s Volume Growth, Labor, and Value-Based Care
Jen Schneider, newly appointed CFO of UAB Medicine, reported strong volume growth, with new beds and units filling quickly, and rising outpatient volumes. Financially, they are better off than during the peak of the COVID-19 pandemic, though not at pre-COVID levels.
Labor challenges continue to persist with slow recovery and a defined focus on productivity. Schneider highlighted the use of virtual nursing to retain seasoned nurses and teach new RNs, which helps manage higher patient acuity and address staffing shortages. Efforts to decrease vacancies continue, with technologists particularly in demand.
The Change Healthcare breach impacted their cash flow but not substantially; it mainly impacted their patient portal and slowed self-pay payments.
Schneider’s extensive experience in value-based care in New England stresses the importance of balancing risk with quality measures for high-quality, low-cost care.
Rural Healthcare Challenges and Technological Adoption
Matt Fisher, CFO of Russell Medical Center, reported declining inpatient volumes and rising outpatient volumes. Amidst financial challenges, their focus is on improving operating margins, along with identifying the right volume mix for recovery and searching for opportunities to decrease costs.
Labor remains a significant issue, Russell has instituted incentives retaining clinical and non-clinical staff. Post-COVID, Fisher has embraced remote work to maintain productivity and morale, reducing agency staffing reliance from 40% to 3%. They developed models to align labor with volume and ensure staff retention.
The Change Healthcare breach severely impacted Fisher’s organization, halting the revenue cycle for six weeks. Assistance from Blue Cross Blue Shield helped to subsidize them during crisis. They have recovered 75-80% capacity. Cybersecurity has become critical, highlighting the need for robust defenses.
Fisher’s organization has limited involvement in value-based care, with gradual movement towards risk-based models. Additionally, Fisher advocated for adopting AI and modern technologies to streamline operations.
Conclusion
The Alabama HFMA Conference panel highlighted the varied challenges and strategies of healthcare CFOs in financial recovery, labor shortages, and technological advancements. While each organization faces unique circumstances, common themes include the critical role of labor management, the impact of cybersecurity threats, and a cautious approach to value-based care and risk. These insights provide a valuable roadmap for healthcare leaders striving for stability and growth in the post-pandemic landscape.
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