By Kelly Gooch for Becker’s Hospital Review
Becker’s Hospital Review asked healthcare leaders to share the factors they believe will pressure hospital finances the most in 2019.
Here are their responses, presented alphabetically.
Editor’s Note: Responses have been lightly edited for length and clarity.
CFO of the UAB Health System (Birmingham, Ala.)
Hospital finances will continue to be challenged by the industry’s ability to control costs. Hospitals are faced with modest revenue growth year over year as a result of a number of external factors: patient volumes shifting from inpatient to outpatient; insurance coverage shifting from commercial plans to Medicare (as thousands of baby boomers turn 65 daily) ;the impact of nontraditional healthcare providers entering the market via pop-up clinics or smart phone apps; and the endless number of payer reimbursement policy changes with negative revenue implications. With revenue growth limited, the ability to control costs must become engrained into the culture of the organization from the leadership team to the front-line employee. Nursing and clinical staff shortages, rising pharmaceutical costs and advances in medical equipment are the big drivers in the cost continuum and hospital leadership must develop a strategy to address each of these issues in the short term and the long term.
President and CEO of UCHealth University of Colorado Hospital (Aurora, Colo.)
Healthcare continues to see significant movement toward outpatient services and value-based care. To be a leader in these areas and make a positive impact on the communities we serve, we must focus on population health while constantly improving quality. UCHealth is growing our primary care, urgent care and ambulatory services within neighborhoods where our patients live and work, and we also are using virtual health services and virtual urgent care to improve access. These comprehensive ambulatory and virtual health services improve overall health and outcomes for patients, and they follow this national shift toward outpatient services.
Senior vice president and CFO of Virginia Mason Medical Center (Seattle)
I expect the major pressures on finances that we experienced in 2018 to continue through 2019. These pressures are caused by a tight labor market, rising drug and supply costs, and flat or declining reimbursements from Medicare and commercial insurers. Because there is little we can do to change these external dynamics, we are focused on areas of our enterprise that we can control. We are also using our management method, the Virginia Mason Production System, to continually identify and remove waste from our internal processes and improve operational efficiency, care quality and safety.
Senior vice president and CFO of Tufts Medical Center (Boston)
For Tufts Medical Center, there are a few items that are impacting our finances in 2019. One is the unknown impact that proposed state budget changes will have on our revenue, as state and federal healthcare spending continues to be a focus. Additionally, due to the current low unemployment rate, we are seeing increased challenges in recruitment across most job classes and increased pressure on salary levels. Finding ways to engage our employees more effectively to keep from losing them to a strong job market will be key.
Executive vice president of finance, chief financial and administrative officer and treasurer of Froedtert Health (Milwaukee)
In short, labor cost increases due to a competitive hiring market and the increasing skilled labor needed to deliver market leading academic medicine with the best providers for superior patient outcomes. As an example, we are in the process of hiring more than 250 nurses and have more than 500 open positions to fill system wide.