What’s on CFO’s minds for hospital revenue recovery these days? The short answer: a lot, including strategies to deal with the swirling political, technologic, and economic change all around them. We take a closer look at five key focus areas for hospital CFOs in the coming months.
“More than half (55%) of healthcare organizations anticipate a recession in the next year or two, and risks related to government reimbursement is the top concern for more than one in five (23%). More than three fourths (76%), meanwhile, have 60 days or less cash on hand.” — from a healthcare CFO survey by BDO
1) HIPAA Activity – this prediction from Saul Ewing Arnstein & Lehr LLP at JDSupra: “In addition to HIPAA enforcement activity, healthcare breaches will continue to attract media attention and be a significant issue for covered entities and for business associates.” In related articles, some idea of the scope of penalties are given:
- Large Multi-State Hospital System Agrees to Pay $2.175M Settlement for HIPAA Violations
- Hacked Business Associate Agrees to Pay $100,000 as Part of HIPAA Settlement
- Large New York State Health System Agrees to Pay $3 Million for Its Failure to Repeatedly Encrypt Mobile Devices
2) Digital Transformation – Healthcare IT News is reporting that a new Black Book survey of nearly 1,600 hospital and health system CFOs and other executives shows CFOs will take a sharp eye to healthcare finance technologies. The article goes on to report that, “Nearly eight in 10 of health system CFOs surveyed said they plan to increase their investment in digital transformations by the end of 2020, with nearly 70 percent predicting an increase of more than 20 percent by the end of the first quarter of 2020.”
In a related article, Becker’s Hospital Review reports that, “Apple CEO Tim Cook during a Jan. 21 Q&A session with IDA Ireland CEO Martin Shanahan said the tech giant is working on technology designed to identify health conditions earlier. “I think you can take that simple idea of having preventive things and find many more areas where technology intersects healthcare, and I think all of our lives would probably be better off for it,” Mr. Cook said.
3) Strategic Focus – The Healthcare Financial Management Association (HFMA) had a forward looking article profiling four CFOs that observes, “CFOs are taking more of a strategic role in helping their organizations meet new challenges and capitalize on new opportunities, including innovative partnerships and fresh lines of business.” How so? The growth of the UC San Diego Health system and the macro-level forces affecting healthcare have impacted Lori Donaldson, CFO, UC San Diego Health’s role. “I continue to maintain responsibility over accounting and budgeting, revenue cycles, supply chain,” she says. “A lot more of my time is spent on more cross-functional activities with our contracting department, our quality department — really balancing the financial-stewardship aspects with the strategic role and partnership with our CEO.”
Donaldson estimates that her time these days is equally split between the more traditional duties and the more strategic types of initiatives and investments, including a clinically integrated network and a Medicare accountable care organization. “A good CFO really has to be able to wear both hats,” she says.
4) Changes in Reimbursement Models & Liquidity Concerns – BDO, an international accounting firm, polled 100 CFOs at hospitals, physician offices, long-term and post-acute care, home health, hospice, and outpatient and ambulatory service providers with revenues ranging from $250 million to $3 billion recently. They found that “providers have high fears of a near-term recession amid increased concerns about reimbursement uncertainty and liquidity challenges, according to BDO’s Treating Healthcare Distress survey.” Additionally, “More than half (55%) of healthcare organizations anticipate a recession in the next year or two, and risks related to government reimbursement is the top concern for more than one in five (23%). More than three fourths (76%), meanwhile, have 60 days or less cash on hand.”
5) Complexity. Education. Security. Ecosystems. – We liked what Christian Lovis, Editor-in-Chief Healthcare IT, observed in an article at HealthManagement.org. We are in “exciting times” he notes, observing that, “everything gets connected, from fridges to prosthetic materials, and the number of connected devices keeps growing. Care networks, personal records, and advanced planning now require hospital systems to become fully integrated with the rest of the world, locally, regionally, and even globally.”
There’s an old Zen meditation about playing ball on running water. We think that’s what it looks like ahead for hospital CFOs, although we might change that observation to playing ball on swirling water. Cloudmed stands ready to assist with solutions for Revenue Assurance, Payer Accountability, and Medicare Reimbursement designed to help CFOs and their teams enjoy speed to healthy hospital revenue recovery.