From uncertainty around the future of the ACA to dwindling reimbursement, hospitals and health systems across the nation are facing a myriad of challenges.
Four healthcare industry experts discussed some of the most pressing challenges facing healthcare organizations today at the Becker’s Hospital Review 3rd Annual Health IT + Revenue Cycle conference in Chicago.
1. Hospitals across all credit rating categories are feeling financial pressure. A few years ago, hospitals with an A+ or higher credit rating typically had strong margins and a lot of options for improvement. “The big difference today is we’re seeing more hospitals that are struggling with operating margin, regardless of rating,” said Charles Alston, market executive and senior vice president at Bank of America Merrill Lynch. To address this issue, hospitals and health systems must examine how to fix the problem and then determine how to sustain those results long term, he said.
2. Hospitals are faced with uncertainty around the future of health reform. “I’m really worried about the future of the ACA and how much bad debt we’re going to have,” said Charles Ayscue, senior vice president of finance and CFO of Asheville, N.C.-based Mission Health. “We’re going to see a lot more self pay and we don’t have the workforce to handle that self pay.” He said Mission Health is taking proactive steps to prepare for the influx of patients with high deductible health plans, with a focus on revenue cycle improvement. “We’ve tried our best to educate our physicians on documentation and coding,” he said.
3. Health system mergers can create new challenges. Chicago-based Presence Health was formed in 2011 through the merger of Resurrection Healthcare in Chicago and Provena Health in Mokena, Ill. Presence Health CFO Mark Rafalski said hospitals involved in the transaction operated on disparate IT systems, which led to some revenue cycle management issues. “We’ve struggled in the area of [claim] denials,” he said. In an effort to turn around its finances, Presence has made a lot of changes in its revenue cycle, including using analytics and outsourcing to key partners, said Mr. Rafalski.
4. Healthcare organizations need to simultaneously cut costs and innovate. Hospitals and health systems across the nation are facing cost pressure. “On the flipside, you have to change your strategy and innovate. You have to invest in the patient experience and the physician experience,” said Keith Lohkamp, senior director of industry strategy at Workday, a provider of cloud-based applications for finance and human resources. These competing priorities have fueled consolidation in the industry, as hospitals look for ways to drive efficiency and improve quality of care.