Opportunities and Obstacles: A CFO Conversation on Health System Financial Resiliency
The healthcare industry is facing significant challenges as it navigates economic uncertainties in 2021 and beyond. In a recent Iodine Intelligence podcast, Troy Wasilefsky of Iodine Software, Harold Mueller of BJC Healthcare, and Robin Damschroder of Henry Ford Health discussed strategies for building financial resilience and tackling the financial issues facing the industry.
The pandemic has led to a decline in overall CMI due to both a decrease in medical CMI and surgery volumes that have not yet returned to pre-pandemic levels. Cost-cutting is one approach to stabilize health system economics, but experts have agreed that it cannot be solely relied upon to achieve financial performance targets. Therefore, it is essential for organizations to pursue other strategies such as generating new revenue streams, capturing revenue for existing work, and leveraging technology such as AI.
Organizations can turn to management consultancies to help identify and stabilize their finances while also focusing on cost reduction efforts and growth strategies. Additionally, value-based care contracts incentivize better care coordination, higher-quality outcomes and cost reduction while improving documentation accuracy remains critical for reimbursement optimization and quality factors such as CMS payments.
In conclusion, healthcare organizations face significant challenges as they navigate economic uncertainties require balancing efforts between cost reduction and creating new revenue streams or capturing revenue appropriately for existing work. While there is no one-size-fits-all solution, organizations can leverage their resources and implement strategies such as management consultancies, growth initiatives, and technology to improve their financial resilience and help them face the current economic crisis.