Becker's Hospital Review

15 COO Hospital C-suites retool for new payment era By Laura Dyrda T he pressure on hospital finances has long been visible in the margins. But the executives navigating it today are increasingly clear eyed about the reality of healthcare economics today: the old model of filling beds and billing payers is no longer a viable long- term strategy. Across the country, hospital and health system leaders are racing to identify alternative payment options that can withstand rising costs, administrative friction and the relentless expansion of high-deductible plans. Among the most promising of those alternatives is the direct-to- employer contract. Perry Sham, CFO of Niagara Falls Memorial Medical Center in New York, sees huge opportunities for community hospitals. "For hospitals, the alternative revenue stream that has the most potential for real impact by far are direct-to-employer arrangements," Mr. Sham said. "ese are arrangements where hospitals work directly with employers to set up medical benefits for employees. Over the past few years, these arrangements have shown savings for employers ranging from 10% to 25%. For hospitals, this is a rare opportunity to drive growth. is should be an option every hospital CFO evaluates." Wyatt Brieser, CEO of Hammond-Henry Hospital in Geneseo, Ill., sees the direct-employer model as more than a revenue fix. He views it as the seed of a more ambitious shi in how U.S. healthcare operates. "Employer-contracted care models will continue to gain traction as both employers and health systems look for ways around rising premiums, administrative friction and misaligned incentives," Mr. Brieser said. "Direct partnerships can create shared accountability for cost, access and outcomes while establishing more sustainable revenue frameworks for hospitals and businesses alike." ose partnerships also open the door to possibilities the fee-for- service system has historically failed to incentivize: prevention. Coupled with the rise in wellness initiatives and health monitoring technology, hospitals that transform can maximize multiple revenue streams and balance their "sick services" with "healthy services." "If the system can find a way to capitalize off of keeping people healthy, we could finally realize a real paradigm shi in health trends in America," he said, pointing to employer-sponsored wellness benefits like annual dietitian consultations, pelvic floor prehabilitation for expecting mothers, and mandatory colon screening as possibilities. "e direct-to-employer arrangements may be an opportunity to really start this trend." at population health vision aligns closely with how Craig Cheifetz, MD, president of the primary care service line at Inova in Fairfax, Va., frames the strategic imperative for his organization. "Alternative revenue streams for a health system increasingly mean moving toward recurring, value-aligned income such as advanced primary care management, shared savings, employer partnerships, virtual and aer-hours care, and services that capture work we have historically done but not been paid for," Dr. Cheifetz said. He argued that primary care, long underfunded in the fee-for-service model, is now the linchpin of any credible revenue diversification strategy. "Primary care sits at the center of this shi because it is where attribution, continuity, and total cost of care are won or lost," Dr. Cheifetz said. "By 2030, survival will depend on predictable, longitudinal revenue tied to population health, digital access, care management and downstream integration — not just visit volume." Inova's primary care service line is already building toward that vision, scaling advanced primary care management, virtual and aer-hours clinics, and shared medical visits, while tightening integration with its ACO and employer health partners. He described the approach as treating primary care as both an access and a value engine, not simply a clinic footprint. at operational reorientation was a consistent theme. Emily Moorhead, president of Macomb Market at Detroit-based Henry Ford Health, said health systems must follow the money upstream. "e focus needs to be on keeping people healthier by moving care upstream and into lower-cost settings, such as primary care, clinics, ambulatory centers and urgent care, rather than relying on higher- cost hospital environments," Ms. Moorhead said. "Strong alignment between payers and health systems will be essential to ensure shared financial success across the continuum of care." At Michigan Medicine, associate COO Stephanie Prechowski, MSN, RN, sees ambulatory growth and digital access models as the clearest path to revenue stability, but also identifies a less-discussed opportunity in behavioral health. "Academic medical centers will also need to better monetize their clinical expertise through risk-bearing arrangements, specialty-focused bundled care, and partnerships with employers and payers," Ms. Prechowski said. "Behavioral health, particularly psychiatry, represents both a mission-critical and financially differentiating growth area when paired with innovative workforce and care models." She added that operational performance itself has become a revenue strategy in a more competitive market. "Systems that can consistently deliver capacity, throughput, and reliability will be best positioned to attract patients, contracts, and strategic partners in an increasingly competitive market," Ms. Prechowski said. Some health systems are moving beyond new contract models entirely, exploring whether their accumulated expertise can be packaged and sold. Kristopher Doan, president of Augusta Medical Group at Augusta Health in Fishersville, Va., described a range of options, from management services organizations serving local private practices to intellectual property developed around unique clinical problems. "at can be done on a smaller, local scale by selling management services and/or technology services to local private practices through a MSO model; or it can be a much larger scale if you have really solved a problem that the industry is facing by patenting medical devices or selling expertise in a particular area through consulting," Mr. Doan said. Perhaps the most sweeping strategic bet belongs to Hawai'i Pacific Health, whose president and CEO, Ray Vara Jr., is pursuing a proposed vertical integration with HMSA, Hawaii's Blue Cross Blue Shield health plan. Aer more than a decade of incremental investments in ambulatory surgery centers, imaging centers, urgent care, and clinical technology, Mr. Vara said the organization has reached the ceiling of

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