In the healthcare world, these expenses are formidable. Hospitals, like other businesses, sometimes borrow money to fund projects—particularly new construction projects. Nonprofit hospitals can be attractive to lenders because of their tax-advantaged nature. But, like our personal credit ratings, a healthcare system that enters into the bond market has specific metrics at which lenders look carefully to determine the cost of such lending, such as payer mix, income margin, debt ratios, and earnings before interest, depreciation, and amortization (EBIDA). And that’s where we come full circle to that latest conversation with the CFO.
So in order to preserve the ability to meet the needs of stakeholders, our friends in finance need to make sure a long-range plan is in place that continues to fund operations, growth, and ongoing maintenance, including the ability to borrow money when appropriate. Going forward, thriving healthcare organizations will have to be consumer-minded and successful in managing the risks of population health. The uncertainty created by the exchanges and transparency, and the inability to accurately gauge and manage the risk of adverse outcomes, has our CFO colleagues pleading with us for a prescription that will ease their restless nights. Here’s how we can help:
- Focus on working with your group to measure and minimize variations in care processes and outcomes among patients and doctors;
- Be mindful that in a value-based world, CMS and insurers now look at both inpatient and outpatient utilization and costs, and we need to do the same in our transitional care planning; and
- Be conscious that our prescriptions for care are increasingly impacting patients’ wallets, so we need to articulate and demonstrate the clinical value that underlies each decision.
The next time you or your nocturnist is admitting that nth patient at 3 a.m., consider that your CFO may also be wide awake, struggling with his or her own version of a management challenge. As physicians who practice in hospitals, which are perhaps the most costly environments in the healthcare world, you and your colleagues may be well positioned to help make your hospitals more efficient, to better manage and improve those outcomes, and to help identify and prioritize the most pressing capital needs.
In short, just what the doctor ordered for your CFO to finally get a good night’s sleep.
Dr. Harte is president of Hillcrest Hospital in Mayfield Heights, Ohio, part of the Cleveland Clinic Health System. He is associate professor of medicine at the Lerner College of Medicine in Cleveland and an SHM board member.