Hospital finance execs have to change their perspective

The Affordable Care Act will change the responsibilities and the expectations of financial management executives in the coming years and decades, Hospitals & Health Networks reported.

The changes due to healthcare reform will impact the bottom lines of hospitals in a major way, according to the article. More hospitals will engage in financial risk sharing. And initiatives such as population health management will require organizations to invest large sums of money in order to maintain their viability, all while weathering lower patient volumes.

"At a certain point, if you're taking on 100 percent risk, you're an insurance company, and your hospitals are cost centers," Jason Sussman, a managing director for Kaufman, Hall & Associates, told Hospitals & Health Networks. "That is a significant change for capital planning and financial planning."

In the meantime, fee-for-service revenue streams remain substantial, which means the transition to more risk-based finances will be neither instantaneous nor seamless. And executives will have to assess their own specific markets in order to make wise decisions.

"It's tempting to talk about the nation as a single trend, but the most striking thing is that there are really dramatic differences in individual markets," Andrew Ziskind, M.D., a managing director for Huron Consulting Group, told Hospitals & Health Networks. "What we are finding is significant variability, and that puts the CEO and the leadership team in a real dilemma. Very often, there's a clear sense of the needed direction, yet concern that if the organization moves too quickly, there could be an adverse financial impact."

Indeed, hospital CFOs have become more invested in the day-to-day operations of their hospitals in recent years in order to gauge how even relatively mundane tasks impact the bottom line of their institutions.

Financial executives will also have to become more invested in healthcare IT, particularly the implementation of electronic medical records and work on adopting such systems to the demands of population health management, according to the article.

To learn more:
- read the Hospitals & Health Networks article

 

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