HFMA: The top issues facing CFOs

From left, moderator Norman Mosrie of Forvis, Henry Ford Health Executive VP and CFO Robin Damschroder, OSF HealthCare CFO Michael Allen, and Phelps Health Senior VP and CFO Jana Cook, at the HFMA Annual Conference.


LAS VEGAS – Value-based care and reimbursement challenges, higher costs and especially margin improvement were on the minds of CFOs who spoke about their top concerns during a panel discussion at the HFMA Annual Conference here last week.

CFOs Michael Allen and Robin Damschroder, who head finances for large health systems OSF HealthCare and Henry Ford Health, respectively, and Jana Cook, senior vice president and CFO for the smaller Phelps Health in Missouri, talked about what they were doing for sustained margin improvement.

Cook said Phelps has been looking at the employee benefit plan and supply costs. 

“We’ve had a loss leader service line we’ve discontinued in the community,” Cook said. “We looked at what parts of the revenue cycle we need to invest in.”

Phelps has seen the biggest revenue benefit from taking a multi-faceted approach to fighting denials, Cook said. They’ve implemented weekly payer meetings and have worked on clinical documentation improvement and coding.

OSF has also worked on all those things, Allen said. 

“It’s just long, hard, steady work,” Allen said. “There is no silver bullet out there.”

Hospitals suffered financially through COVID-19, and in 2022, CFOs realized stability was not going back to pre-pandemic levels.

“When we hit 2022 and saw it was not going back,” Allen said, “we went down 6 percentage points in 2022 in the big morass. Holding it and getting better is the challenge for us.”

For margin improvement, OSF is looking at finding 6% in cost savings and is measuring the progress. Allen said he and other CFO colleagues picked six projects that would have a $15 million yield each. 

Damschroder, who is also executive vice president at Henry Ford, said they found standardization has driven results, despite complaints from some about why things can’t change.

Henry Ford plans to take on pharmacy, she said. Pharmacies are facing greater reimbursement pressure from pharmacy-benefit managers, according to The Wall Street Journal. 

On the plans side, there are difficult wins ahead on Medicare Advantage and profitability, Damshroder said.

OSF went through a renegotiation process with payers in 2023, Allen said. Medicare reimbursement is higher in the state of Illinois.

Medicare reimbursement rates in Illinois are typically set at 80% of the cost of providing services, with patients responsible for the remaining 20%, according to StrataPT.

But costs continued to go up and OSF didn’t make up the difference, Allen said. 

One solution is in value-based contracts with commercial plans as the payer mix changes to one more heavily dependent on Medicare and Medicaid reimbursement, which is lower than commercial rates.

Both Allen and Damschroder said it’s hard to find payer partners that are aligned on goals and are transparent. 
One value-based federal program that has high participation is the Medicare Shared Savings Program. But MSSP lags in data, Allen said. Health systems don’t find out how they’ve done until nine months after the year closes.

Henry Ford is going to double down on value-based care, Damschroder said, but taking risk is not for the faint of heart. The cost to scale is important. 

Partnerships have helped. OSF recently partnered with GE Healthcare and Pointcare for patients in Illinois and Michigan, to help increase clinical and operational efficiencies, standardize care delivery models and improve patient outcomes.

Henry Ford has a joint venture with Ascension. In October 2023, Henry Ford Health and Ascension Michigan signed an agreement to integrate Ascension’s southeast Michigan and Genesys healthcare facilities and assets with Henry Ford’s. 

The panel’s moderator, Norman Mosrie, partner in charge, Assurance Services at Forvis, asked if AI was helping.

Everybody is racing toward it, Damschroder said. There’s concerns on the cybersecurity side, and it’s challenging for adoption on the clinical side. 

Allen said OSF has a governance structure around AI. They’re working at an incremental pace despite the appetite for AI being big, and on the vendor side, the sell is strong. 

Damschroder said the lessons she’s learned is, don’t automate for a standard process if it’s not going to change the process. 

Cook said AI is being considered around automation in the revenue cycle, with considerations on whether the technology can be integrated into the Epic EHR workflow. 

“We’re starting to dip our toes in,” Cook said. “It’s a slow process.”

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