As competition rises, reimbursements continue to decline, and healthcare costs continue to climb, most if not all health systems are forced to find ways to change the way they do things. Most of the CFO’s I speak with tell me they need help maximizing reimbursement. At the core of this statement are several factors: 1) how do I optimize reimbursement and thus revenue and potentially profit, 2) how do I minimize my cost structure to assist in maximizing profits and 3) how do I accomplish this while optimizing my cash flow.
The pressure in our country to drive down healthcare costs while maintaining or increasing the quality of care has placed health systems in this position. Many organizations have initiatives to reduce costs either through purchasing power, efficiency gains via process improvement, or attempting to do the same work with a smaller workforce. With payment reform looming and a transition from fee-for-service to value based care not far away, now is the time to focus and change.
Many of these organizations have these initiatives driven by a functional area, which typically leads to a silo view and approach. Often improvement is made but not as much as desired or expected due to the silo effect. As many health systems have implemented electronic health record (EHR) systems and enterprise resource planning (ERP) and have been forced to look at the entire organization for the implementation, efforts to maximize reimbursement, reduce costs and improvement efficiencies and quality need to have an enterprise wide approach as well. What Finance views as reasonable cost savings ideas for a clinical area may actually result in higher clinical care costs with reduced quality and increased risks. Alternatively, what the clinical team views as more efficient process may result in higher operational costs. Simply creating a process improvement team which focuses on clinical improvement opportunities or a data analytics team in Finance that is focused on driving out costs will not be enough to create long lasting, enterprise change and success.
As an organization embarks on this type of initiative, a strategy should be developed for the entire organization to ensure all stakeholders are involved. We have found appointing one individual who reports to the CEO or COO to lead the enterprise effort yields the best results. A well-defined strategy and plan that involves everyone and changes the culture of the organization to think and act differently are imperative to long-term success. Similar to how health systems now have a Chief Information Security Officer or Chief Risk Officer reporting to the CEO or COO, a Chief Process Improvement Officer may be needed to drive revenue, improve process, and reduce costs with no sacrifice to clinical care and quality.