Top 5 Concerns of Healthcare CFOs

Planning for a HealthLeaders Media gathering of hospital and health system chief financial officers reveals the weightiest issues on their minds.

Preoccupying the minds of healthcare financial executives are prevailing problems engulfing the industry’s business climate: uncertainty about healthcare reform, declining public and private reimbursement, accelerating operating expenses, and access to capital.

This August, 50 healthcare finance leaders will collaborate on fortifying their organizations’ fiscal health at the 2017 HealthLeaders CFO Exchange in La Jolla, CA.

In pre-event planning calls, CFO Exchange attendees, representing integrated health systems, academic medical centers, community hospitals, and safety net providers, have mentioned some of the struggles they’d like to know how others are tackling.

During the two-day event, a series of moderated, peer-to-peer roundtables will explore how organizations are addressing the top five issues.
1. Dismantling of the Affordable Care Act

CFOs foresee the negative financial impact a repeal will generate and are interested in knowing how others are preparing for anticipated changes in Medicaid for expansion and non-expansion states.

2. Enhancing and Supporting Population Health

CFOs are concerned about building the right infrastructure to support population health, including integrating physicians, retooling their workforce, realigning the financial tracking of population health efforts, incorporating behavioral health in primary care, and determining how much payer risk to assume.

Executives expressed their concerns about knowing how and when to invest resources in a relatively uncharted path.

In addition, they are interested in how to bring disparate goals together to align with population health efforts.

3. Curtailing Clinician Costs

Optimizing access and productivity to ensure profitability among acquired physician practices, reducing clinical practice variation and cost-per-case, and lowering costs associated with filling in with agency labor due to the nursing shortage are challenges for senior executives.

Organizations will be requesting and sharing strategies for seizing the reigns on clinician expenses.

4. Increasing Revenue

Overcoming reimbursement struggles, uncovering innovative ways to cut costs, and ascertaining solutions to avoiding readmission penalties are common goals for CFOs.

5. Determining Gaps and Opportunities

Another goal shared by CFOs is the desire to share the most useful data analytics and business intelligence platforms for improving quality-of-care and outcomes.

In addition to their larger concerns, participants at the invitation-only event will talk about consumerism, direct contracting for healthcare with employers, charting a financial strategy on value-based care, and ideas about what competition will look like in the future.

Talk over Coffee into a Data Revolution for northern Nevada’s largest hospital system

Image result for starbucks coffee for meetings

In May 2016, Tony Slonim, MD, DrPH, met fellow New Jersey native Joe Grzymski, PhD, at a Starbucks for coffee. Dr. Slonim, CEO of Reno, Nev.-based Renown Health, said he expected to trade stories about their home state, but they soon found their professional interests as compatible as their personal ones.

“Like all good things, it started at Starbucks over a coffee on a Saturday morning,” Dr. Slonim said, “As we let our minds expand and started thinking about complementary ways we could collaborate, this idea came up.”

This idea is a partnership between Renown and the Desert Research Institute, where Dr. Grzymski is senior director of applied research.

The duo began to think of ways they could combine the clinical data 946-bed Renown had on hand with the DRI’s environmental data to better understand the ways outside factors affect health outcomes in their community.

But the idea didn’t stop there. The pair also recognized that social determinants play an equally influential role in shaping a person’s health, so they made sure to include social data from the Governor’s Office of Economic Development in their new project, which did not yet have a name, but more importantly had a purpose.

“If we believe in population health, and the vision for population health, we’ve got to do a better job of understanding the health and the wellbeing of the people we’re serving,” said Dr. Slonim. “As an organization that’s got a large market share, it’s incumbent upon me as the CEO to think about how to use the most efficient resources for the most benefit for people that need it.”

At first, the collaboration was seen as a data-sharing project that would connect skilled researchers and analysts at the DRI with a wealth of combined information that had been inaccessible to a single provider in the past. However, it was only once Dr. Slonim and Dr. Grzymski took their idea to the 2016 BIO International Convention in San Francisco that they were able to find a third partner to provide them with yet another data set that would help them fully see the big picture of a person’s health.

Representatives from retail genetics firm 23andMe approached Dr. Grzymski following his talk at BIO. The company offered to provide genetic testing and sequencing for the project. Dr. Grzymski jumped at the opportunity, which would enrich the already robust data collection he and Dr. Slonim had begun to compile.

With genetic information as a fourth pillar of their potential data set, Renown and the DRI founded the Renown Institute for Health Innovation. The IHI’s most important initiative would go on to be named the Healthy Nevada Project.

At a September 2016 press conference, Dr. Slonim and other IHI leaders teamed up with Nevada Gov. Brian Sandoval to announce that the first 5,000 Reno residents who signed up to submit genetic samples would receive free access to the test results. Dr. Slonim believes offering this access to community members is what encouraged 5,000 people to sign up in only the first 24 hours of the enrollment period. With such an enthusiastic response, the leaders at the IHI decided to open up 5,000 more slots, which took one more day to fill. In only 48 hours, the Healthy Nevada Project had succeeded in enrolling 10,000 local residents to submit samples for genetic testing.

The project was off and running — quickly. And Dr. Slonim’s work was only just beginning.

Once 23andMe completed genetic sequencing of all 10,000 study participants in December, the Healthy Nevada Project still faced a looming question: What to do with all the data they’d collected?

“One-hundred more people per 100,000 die of cardiovascular disease in northern Nevada than national estimates. Our cancer rates are significantly higher and nobody knows why. So [we’re] trying to understand what the backdrop and the context is,” Dr, Slonim said. “Is it the mines that we have here? Is it the weather patterns that change because we’re in a valley? Our air pollution is higher, our particulate matter is higher — is that what causes lung cancer? We’re trying to figure this out, but you can’t do anything without data, so we started there.”

Dr. Slonim understands epidemiologists and analysts will have to spend many careful hours with the data to come to any concrete conclusions, but he believes the Healthy Nevada Project represents an essential first step for the future of the healthcare industry. If he and his colleagues could begin to harness the power of data in EHRs, then he sees a world of untapped potential that can help his community improve their health while also improving Renown’s organizational efficiency.

“This is the ultimate in strategic planning. If I figure out that our community is more at risk for cardiovascular disease 10 years from now, I can be thoughtful about how I go about recruiting cardiologists. If I know that the population is growing in pediatrics, I can start a program for pediatric residents at the medical school and grow my own pediatricians,” Dr. Slonim says. “The horizon for planning can be kept in view because we’re learning about our population’s health and disease. The second reason why I did this is because it’s the best way to engage consumers in their own healthcare to modify their behaviors.”

Dr. Slonim’s advice to hospital leaders looking to improve their capacity for innovative data concepts is simple: Take the first step. For the most part, the benefits of the Healthy Nevada project still lay ahead, as it has been only 15 months since that coffee meeting, but the game-changing potential cannot be understated. Dr. Slonim is confident that putting in the work to collect and analyze this comprehensive data will revolutionize the way Renown cares for its patients, and he believes other providers can follow suit.

“If you’re a large contributor to your market in healthcare with full range of integrated services across the continuum, get the environmental data. Get partnerships with the social data,” Dr. Slonim says. “Figure out how you can exercise your clinical EMRs and the great repository of data that are in there and put them in a big data warehouse and figure out how to analyze them. We’re not using predictive analytics in healthcare the way that other industries are, and we need to be better at that.”

Collaboration, Big Data Help Phoenix Children’s Focus on Value-Based Care

The exterior of Phoenix Children's Hospital in Arizona

Phoenix Children’s collaborative approach to value-based care relies on community input, big data analytics, and a physician-driven quality measurement program.

Mergers, acquisitions, and new partnerships can be a scary prospect for healthcare organizations, no matter which side of the negotiating table they are occupying.

In addition to potential cultural changes, staffing adjustments, and new workflows to adopt, organizations joining forces in the era of value-based care often have to adopt to new electronic health record systems and accept different strategies for measuring their quality, productivity, and outcomes.

While a successful union can rescue revenue cycles, and bring renewed vitality to flagging providers, healthcare organizations must carefully navigate the delicate acquisition process to ensure that new members of the team have the skills and tools required to reach their full potential.

At Phoenix Children’s, one of the largest pediatric health systems in the country, a desire to offer comprehensive care to the community has led to a firm reliance on big data analytics to gather actionable financial and clinical insights from a rapidly growing provider network.

Over the last three years, Phoenix Children’s has brought more than 100 independent practices into the fold, says Chad Johnson, Senior Vice President and Executive Director of the Phoenix Children’s Care Network – and full data transparency is a fundamental requirement for each and every new member of the team.

The ability to use big data analytics to measure productivity, quality, and financial success within a comprehensive network of care will be vital for Phoenix Children’s as it continues an ambitious move into value-based reimbursements.

“During 2017, we’re moving around 100,000 lives into fully risk-based models,” Johnson explained to  “We’re doing this because we believe that the way to truly influence outcomes is to own the medical management of our populations.  Hospitals will need to have a much larger footprint – a larger, integrated network – that includes independent primary care and specialty groups under one umbrella.”

“We want to move aggressively down this path because we feel that unless you’re willing to take that step, you’re never going to be able to really bend that cost curve,” he added. “We’re confident that we can step up to the plate and succeed in a risk-based environment with the strategies we’re cultivating.”

Number one on the list of challenges as the health network shoulders more financial risk is how to accurately and consistently measure quality across so many disparate locations and provider types.

“We’ve had to integrate data from these practices, which are all using a variety of EHRs, and then figure out how to consume that data and present it so that it can be used for optimizing care and to verify quality improvements across the network,” Johnson said.

“We use this data to target interventions, and to improve the management of our populations, our performance on quality metrics, our utilization, and total cost of care.  That data becomes the number one essential driver of many of the decisions that we’re going to make within our pediatric health enterprise.”

Why an “Empty Desire” for Big Data is Inhibiting Value-Based Care

Value-based care and big data in healthcare

For the most part, the healthcare industry has embraced the idea that access to big data is a critical part of doing business in the modern care environment.  But there’s a major difference between having big data and leveraging it effectively for cutting costs and improving quality.

The chasm is growing between organizations that simply have access to data and those who know how to use it well, argues Shahid Shah, Entrepreneur-in-Residence at the AHIP Innovation Lab, and the resulting imbalance of information is making it difficult for payers and providers to truly make the leap into value-based care.

If provider organizations and their payer partners wish to bridge those gaps and prepare for a financial environment that prioritizes better outcomes, they will need to completely overhaul their approach to developing quality metrics, designing their health IT environments, and quantifying their data-driven relationships.

The process must start with taking a closer look at what payers really want or need when they talk about sharing information.

“Payers have an empty desire for data,” Shah told at the HL7 FHIR Value-Based Care Summit in Chicago.

“It’s empty because it’s not in contracts yet. They haven’t reached the level of sophistication where they can accept data from providers and do something meaningful with it. If providers actually started giving them data, they wouldn’t know what to do with it, because they don’t have the systems in place.”

While there are still some technical challenges that make data aggregation and analytics a problematic proposition, the bigger issues are cultural, organizational, and legal.

“The infrastructure isn’t the main obstacle,” explained Shah, who is also Co-Founder and CEO of Netspective Communications.  “Developers will always try to solve whatever problems you throw at them, even if it takes a while.  There is nothing that a developer won’t eventually be able to do.”

“Data blocking and the inability to share data really happen because we haven’t created the demand ecosystem for interoperability. The fundamental flaw of our so-called desire for interoperability is that we haven’t reduced it to a transaction that can be measured and monitored in legal terms.”

The current generation of value-based care contracts simply don’t contain the necessary language to establish clear parameters for effective data sharing, he stated.

“They just don’t deal with data,” he said.  “There aren’t clauses that say things like, ‘I want you to send me this amount of data on this number of your patients over this period of time using this particular standard so that I can calculate these ten measures using such-and-such as the denominator, et cetera.’”

“Instead, payers ask for raw data so that they can compute the measures on their own, but that can lead to conflicts with providers and confusion over payments.  We need a better way to share data – and better data to share – if we’re going to make value-based care work.”

Nonacute Care: The New Frontier

Image result for New Frontier

What happens outside the hospital is increasingly important to success, so healthcare leaders need to influence or control care across the continuum.

If you’re running a hospital, one irony in the transformation toward value in healthcare is that your future success will be determined by care decisions that take place largely outside your four walls. If you’re running a health system with a variety of care sites and business entities other than acute care, the hospital’s importance is critical, but its place at the top of the healthcare economic chain is in jeopardy.

Certainly, the hospital is the most expensive site of care, so hospital care is still critically important in a business sense, no matter the payment model. But if it’s true that demonstrating value in healthcare will ensure long-term success—a notion that is frustratingly still debatable—nonacute care is where the action is.

For the purposes of developing and executing strategy, one has to assume that healthcare eventually will conform to the laws of economics—that is, that higher costs will discourage consumption at some level. That means delivering value is a worthy goal in itself despite the short-term financial pain it will cause—never mind the moral imperative to efficiently spend limited healthcare dollars.

So no longer can hospitals exist in an ivory tower of fee-for-service. Unquestionably, outcomes are becoming a bigger part of the reimbursement calculus, which means hospitals and health systems need a strategy to ensure their long-term relevance. They can do that as the main cog in the value chain, shepherding the healthcare experience, a preferable position; but physicians, health plans, and others are also vying for that role. Even if hospitals or health systems can engineer such a leadership role, acute care is high cost and to be discouraged when possible.

CVS Health launching an analytics-based initiative to deliver personalized diabetes care

Dive Brief:

  • CVS Health will launch the Transform Diabetes Care program in early 2017 to help its pharmacy benefit management clients.
  • The program will use data analytics to personalize care for diabetes patients and CVS hopes it will allow each participating diabetic client to save as much as $5,000 annually.
  • The goal is to reduce spending on diabetes patients by offering them personalized strategies to improve medication adherence, control over blood glucose levels, and make healthy lifestyle changes.