Cost control is key: HFMA
The coming years will bring continued deal-making and greater scrutiny of hospital and physician performance on quality and cost control, said speakers at this year’s Healthcare Financial Management Association Annual National Institute.
The yearly meeting, held during the last week of June, drew roughly 5,000 chief financial officers, treasurers, accountants and other healthcare finance professionals to Las Vegas for four days of speakers on healthcare markets and policy. Talk of the U.S. Supreme Court decision on the Patient Protection and Affordable Care Act at the meeting was limited to speculation; the HFMA conference ended a day before the court upheld nearly the entire law.
Hospitals and doctors will see efforts to measure quality and efficiency accelerate as employers seek high-value providers, said Simon Stevens, executive vice president UnitedHealth Group and chairman of the UnitedHealth Center for Health Reform. “Performance assessment is happening and is going to intensify,” said Stevens, one of the event’s featured speakers.
Ahead of the conference, the HFMA released five guidelines for the development of value measures. The guidelines call for value metrics to promote better care for individuals, the population and to reduce the cost of care, which are three goals widely known across the industry as the “triple aim.”
Metrics should also be limited, the guidelines said, “to judiciously target high-
priority areas of improvement.” Selective use of incentives and penalties will help to avoid unintended consequences, the report said. Finally, the guidelines urge provider-specific quality and price information that’s useful to patients. The industry can also expect continued consolidation, driven by access to capital and guided by strategic goals and potential partners’ values, said dealmakers at the meeting.
Not-for-profit providers—hungry for capital to make investments in their physical plants and information technology—are wondering whether they might be more successful if they could access the capital available to for-profit entities, said James Olsen, managing director in the healthcare finance group at Bank of America Merrill Lynch. “That discussion is new to the last 18 months or two years,” he said, noting that partnerships between not-for-profit and for-profit providers have “proven to be pretty successful.” For-profit systems, meanwhile, have been “very aggressive” in expanding around the country. “Most hospitals and systems believe they really need to be the No. 1 or No. 2 in the market,” Olsen said.
Private-equity firms—previously only interested in for-profit providers—are also increasingly “crossing the bridge” to the notfor-profit space, said Phil Pucciarelli, managing director of global healthcare investment banking at Bank of America.
About 5,000 attended the conference.