Push for system changes to find savings is theme at HFMA
Speakers at ANI put focus on system changes
Several of the big-name speakers at the Healthcare Financial Management Association’s Annual National Institute last week prodded the hospital finance executives in attendance to remake their organizations to deal with a world in which all payers are pushing to save on healthcare costs.
Cutting costs in a hospital system does not have to mean rationing care if executives embrace changes in system design, Maureen Bisognano said in her keynote address kicking off the ANI, held in Orlando, Fla. Bisognano, president and CEO of the Institute for Healthcare Improvement, told attendees that by improving safety, engaging patients and providing true leadership to their hospital systems, executives can cut costs by 1% to 3% annually without hurting patient care.
Bisognano described how 478-bed Cincinnati Children’s Hospital Medical Center attacked healthcare-acquired infections and showed not only the money that payers saved when infections were avoided but how the hospital prospered as well: Over a quarter, a hospital bed could be filled by six patients who acquired an infection or 18 patients who did not, she said.
“You know the money is there,” Bisognano said. “You know that we have to drive down costs. With the continued financial pressure hospitals face, you have to do that in ways that don’t hurt outcomes.”
Attendance for the ANI was up, with HFMA estimating that attendance was just over 4,700 people, according to a spokesman, which would be a 4% to 5% increase from last year when the conference was relocated to Las Vegas after flooding in the original Nashville location.
Another keynoter, Peter Orszag, former director of the Office of Management and Budget, warned that an overhaul of U.S. healthcare payment to reward value cannot succeed without Medicare, yet policymakers face gridlock amid a highly politicized environment. Commercial insurers are too fragmented to change healthcare payments, but Medicare has the clout, he said.
A politically polarized Congress supports the need for the Center for Medicare and Medicaid Innovation and the Independent Payment Advisory Board, both of which operate independently from Congress, said Orszag, now a vice chairman with Citigroup. Providers must push to eliminate unnecessary care, make health information technology investments and reduce unneeded variation in delivery and embrace new payment models, he said.
Richard Clarke, president and CEO of the HFMA, told his members that payers and policymakers are not going to tolerate the growing gap between the quality their organizations are producing and how much payers are shelling out for it. Clarke said the HFMA’s Value Project gives healthcare organizations the tools necessary to adapt to a value-based payment system (June 20, p. 12).
With all the talk of the economy, strapped state budgets and the changing demands of the business, hospitals’ access to credit for construction and technology depends mostly on investors’ opinions of the industry and borrowers’ financial performance, said Martin Arrick, managing director of not-for-profit healthcare ratings for Standard & Poor’s. At a well-attended session, he said: “Your access to capital, I really think, is up to you.”
Physician employment and other physician alignment strategies formed a thread running through several sessions. The structure of physician alignment arrangements is important, but the real key is to hire or partner with the right physicians in the first place, according to one set of panelists. “You have to pick the right docs,” said presenter Keith Moore, chief financial officer of Hospital Sisters Health System in Springfield, Ill. “It’s all about your selection process.”
Moore also said one huge difference between the current wave of physician employment and the one in the 1990s is who is initiating the discussions. “In 1995, they didn’t knock on our door. We kicked their door down and offered them the moon,” Moore said, adding later that, now, “The doctors are at our door everyday.”
The videos and all of Modern Healthcare’s additional coverage of the ANI are available at modernhealthcare.com/section/liveat-hfma/. — by Paul Barr, David Burda, Melanie
Evans and Vince Galloro