Becker's Hospital Review

26 Financial Management Checking In: Financial Updates From 5 Health Systems Allina Health (Minneapolis) saw its profit drop 55 percent in fiscal year 2014. The system's total revenue for fiscal 2014 was up 5.3 percent from fiscal 2013, increasing from $3.4 billion to $3.6 billion. Total expenses in fiscal 2014 were up too, growing to $3.5 billion from $3.2 billion in 2013. Banner Health (Phoenix) posted a $263.3 million operat- ing surplus on $5.4 billion in revenue for the year ended Dec. 31, 2014, compared to an operating surplus of $254.1 million on $5.1 billion in revenue the year prior. The sys- tem's operating margin for 2014 was 4.9 percent, down slightly from 5 percent in 2013. Henry Ford Health System (Detroit) posted a $27.8 mil- lion net surplus on $4.7 billion in revenue in fiscal 2014, a significant improvement from the system's $12 million deficit on $4.5 billion in revenue in 2013. Indiana University Health (Indianapolis) recorded a 13.9 percent operating margin in 2014, up from a 6.2 percent operating margin the previous year. The system's revenue increased to $5.7 billion in 2014, up from $5.2 billion in 2013. IU Health's operating income grew to $795.3 million last year, which was a significant increase over its operat- ing surplus of $323.6 million in 2013. Intermountain Healthcare (Salt Lake City) reported a $301 million operating surplus on nearly $5.57 billion of revenue in 2014. The system's 5.4 percent operating margin for 2014 was down from a 7.8 percent operating margin the year prior. n 3 CFOs' Best Practices for Running a Finance Team By Ayla Ellison H ospital and health system CFOs are increasingly taking on more responsibility at their organizations as many of them are transitioning to become a strategic part- ner who works side-by-side with the CEO. As their duties expand, it is important they have a strong system and team in place providing them with the support they need. Below, three hospital and health system CFOs share their best practices for developing and running a finance team. 1. Jeff Taylor, CFO of St. Luke's Health System in Boise, Idaho, said effectively running a hospital or health system finance team "amounts to instilling a culture of discipline" in all that the team does, "whether that's timely reporting of information, providing op- erational leaders and physicians with information upon which they can act, or hiring the right people." Mr. Taylor also said it's becoming increasingly important for CFOs to look outside of the healthcare industry for management capabilities. "As provider systems look to assume greater financial and performance risk associated with managing the total cost for defined populations, competencies found in the payer market are increasingly important," he said. 2. Tim Olson, CFO of ThedaCare in Appleton, Wis., said effectively running a finance team takes "thinking beyond finance." He believes part of the role of a hospital or health system's finance team is "to help the organization think about all of the key success objec- tives together." At ThedaCare, that includes safety, quality, customers, people and financial stewardship. He also said its vital a finance team understands the work it produces and the true value it brings to the end user. "When we don't see the value in the product/request, the expecta- tion is that we question the work with the end user to understand the need and value." 3. Talana Bell, CFO of Flowers Hospital in Dothan, Ala., advises hospital and health system CFOs to surround themselves with people who share the same passion for high quality. She also said its vital CFOs know their most profitable service lines and how to grow them. After that understanding is established, she advises CFOs and their teams "to develop strategies to grow the business and find other profitable lines." n When you need it We have it COMPLETE REVENUE CYCLE SUPPORT AR Projects | Self Pay | CBO | HIM Audits | Coding | ICD-10 | Consulting | Staffing "Since partnering with HRG we have more than doubled our cash collections and seen extraordinary growth that is sustainable." Joshua Gilmore TCC Health Services Finance Director 800.695.8171 | hrgpros.com BENCH S T R E N G T H

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