As healthcare moves toward new payment and care delivery models designed to improve quality and reduce costs, financial management is at the heart of the industry’s transformation to become more value-based.
That’s the consensus of healthcare finance professionals meeting this week in Las Vegas. At its Annual National Institute, leaders of the Healthcare Financial Management Association acknowledged the momentous changes that face the industry as it transitions from fee-for-service to value-based care, but at the same time argued that HFMA members are well positioned to take on those challenges head on.
“We have faced as an industry a wide ranging set of changes that we had to tackle so that our communities could continue to receive the very best healthcare,” said Mary Mirabelli, newly appointed chair of HFMA’s board of directors. “We have gone through massive legislative changes, and each and every time, we’ve figured out a way to make it work.”
Mirabelli, vice president of global healthcare practice at Hewlett Packard Enterprise, asserted that the latest transformation in healthcare means “new processes, jobs, roles, systems and technologies” as well as the “integration of services, blurring of roles, and the merging of organizations.” Ultimately, she said the changes that finance professionals have been asked to manage are endless.
As the industry continues to evolve to alternative payment models, Mirabelli believes that HFMA members must seek to “thrive” during these uncertain times, working hard to “understand the implications of our financial statements, our revenue, our clinical care, and to do the right thing.”
Nonetheless, results of a newly released KPMG poll of nearly 300 healthcare executives show that a majority now say that value-based contracts will hurt profitability versus 47 percent two years ago. In addition, the survey found that the most significant impact from the changes in the delivery of care will come from growing connections with lower acuity healthcare centers, disease management and increased use of telemedicine.
According to Jim Landman, HFMA’s director of healthcare finance policy, perspectives and analysis, both providers and payers are feeling the pressure of market forces that are reshaping the industry. He contends that consumerism, population health, and value-based payment are erasing the traditional boundaries between hospitals, physicians and payers, which require new levels of collaboration in this rapidly changing environment.
“One of the things we’re seeing is new combinations emerging in all sorts of ways and forms, whether it’s an official merger, an affiliation, a joint venture, or a partnership,” said Landman. “We’re seeing healthcare systems and health plans doing this, and physician practices and health plans doing it.”
With patients at the center of care, he argues that it’s more important than ever for health plans, hospitals and physicians to be “on the same page,” working together for financial and clinical alignment and that there are core capabilities that organizations must develop to succeed under value-based payment and care delivery models, including health information technology and healthcare analytics.
Gordon Edwards, chief financial officer of Wisconsin-based Marshfield Clinic Health System, said that his organization continues to invest in IT and analytics. “Data helps drive decisions that we make on a daily basis,” exclaimed Edwards. “We have been an adopter of technology early on.”
Marshfield’s ambulatory electronic health record system is homegrown. The integrated regional healthcare provider, which generates $2 billion in revenue evenly divided between its health plan and care delivery, offers a portal for patients—25 percent of whom use it—and boasts that it has been providing telemedicine services for nearly 20 years.
“IT has been and will continue to be an area of focus and investment,” added Edwards. “In some regards, it’s become more important than ever.”
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