Becker's Hospital Review

81 Executive Roundtable Sponsored by: The CFO Perspective: What Trends Do You See on the Horizon and What Market Disrupters Are Here To Stay? C hange in the healthcare industry is rapid and continuous. Although it's impossible to predict what healthcare will look like five or 10 years down the road, experts have identified the disrupters and trends causing the industry to change form. Various trends, including the rise of patient consumerism, ad- vanced technology and increased focus on outpatient care, are changing the dynamics in hospital leadership. Hospital and health system CFOs must not only ensure their organizations are financially stable and serve as ambassadors to the financial side of the business, but they must also stay ahead of change and adopt a patient-focused perspective to develop creative and flexible approaches to strategic challenges. Becker's Hospital Review caught up with CFOs from three hos- pitals and health systems to discuss the healthcare industry disrupters they believe are here to stay, trends they see on the horizon and how their role is changing as the industry shifts to- ward value-based care. Participants include: • Aaron Eichorn, CFO of University Health System (Shreve- port, La.) • Stephen Forney, CFO of Verity Health (Redwood City, Ca- lif.) • Troy Hammet, CFO of CHI Memorial Hospital (Chattanoo- ga, Tenn.) Question: With increased patient liability, what demands do you see being placed on the system from patients, the regulatory environment and/or the market as a whole? Aaron Eichorn: As the burden of paying for healthcare services shifts more to patients, the patients will certainly evaluate the cost/benefit and financial implications of seeking healthcare services. While in many cases this may actually be good for the system, such as patients who will now choose to go to an urgent care center rather than an ED, there may be unintended conse- quences. Patients with limited financial resources may choose to defer care, which could exacerbate existing health condi- tions. Not only would this increase costs for the system, but this could have health consequences on the very people who made the financial effort to purchase health insurance plans in the first place. Stephen Forney: The increase in patient liability over the last several years has created a profound shift in what we would have traditionally looked at as bad debt. Bad debt used to be patients who were strictly self pay. It is now made up of patients who have insurance whose deductibles have been increasing and pay less than owed. These individuals by and large have jobs and means to pay. The patients, because they're paying more themselves, want to make sure charges are calculated correctly. This puts more pressure on the organizations to pro- vide that information upfront and to follow up with patients af- terward. Troy Hammett: With the increasing number of patients with high-deductible plans, there is greater pressure on healthcare providers to perform financial counseling and collect more during the pre-registration process or at the time of service. To be successful, providers need a process to make timely and accurate estimates of each patient's liability. Regulators and pa- tients are requiring more transparency as it relates to anticipat- ed charges and payments for services rendered. Q: With declining reimbursements, how do you measure and maximize your payer/payment mix? AE: It is critical to consistently measure payer mix by volume and charges. Declining reimbursement from governmental payers will continue to pressure hospital systems to improve their payer mix by attracting more commercially insured pa- tients. While capital investment in new programs, services and infrastructure are viewed by many [as] necessary to attract com- mercial volume, there are other tactics healthcare systems can utilize to improve their payer mix. By providing a superior pa- tient experience, and high-quality patient care, hospitals can attract a better payer mix, which will support continued growth. SF: We've invested in the necessary software tools to adjudi- cate payments and make sure we're getting paid correctly. That gives us insight into what the payer mix is and allows us to bet- ter understand the profitability of our service lines. In our case, when we see systemic decline, we try to offset it by adding or improving current service lines. TH: From a revenue cycle standpoint, we monitor actual pay- ments by payer against anticipated payments to ensure we are paid according to each participating provider agreement. It is critical that we follow up on any payment variances with the payers. On the front end of the billing process, we can optimize our DRG reimbursement by enhancing our clinical documentation and coding practices. Under our value-based arrangements, we implemented changes to clinical operations and processes that resulted in enhanced quality scores and in- centive payments.

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