Healthcare Strategies for COVID-19 & Plans for Moving Forward: a CFO Panel
March 2, 2021
In spring of 2021, Strata hosted the EPSi User Group Virtual Summit, a completely free and virtual event welcoming the EPSi user community to the Strata family. Presenters shared best practices and stories on forecasting in healthcare, change management in healthcare, and healthcare decision support.
More than 700 attendees tuned in to hear the experiences, healthcare strategies and challenges of their peers. They also were able to sit in on specific EPSi product training sessions and explore the new functionality available to them with the Strata Cloud solutions. The event was the perfect opportunity to share more about how the new Strata delivers a unique set of software and service solutions. Attendees learned how a healthcare cost accounting software can help healthcare providers better analyze, plan and perform in support of caring for their community and reducing the cost of care.
The first day ended with a panel discussion of CFOs representing top organizations across the new Strata network. They shared how their organization used healthcare strategies to navigate challenges—in a year that turned out to be easily the worst financial crisis in the history of healthcare.
Strata CEO, Dan Michelson, and Strata SVP of Client Services, Jennifer Rauworth, sat down with Mike Allen, CFO at OSF HealthCare; Rick McWhorter, Executive Vice President & CFO at Texas Health Resources; and Steve Allegretto, Vice President of Value Based Care at Yale New Haven Health.
All three panelists described experiences in their career unlike any they’ve had before. While the impacts of COVID-19 have been far and wide, affecting economies, job loss, personal health and safety, schooling, entertainment and human socialization across the globe, perhaps one of the most significant effects has been the impact on the healthcare industry, causing an immense strain that reached far beyond the patient halls. Those sitting in the finance seat have certainly felt the weight of it, facing many unknowns and being forced to make swift adjustments and some very important decisions.
Each of the panelists shared with attendees, how their history with Strata and EPSi prepared them with the right tools and experiences to successfully adapt and respond in areas like healthcare decision support, change management in healthcare and rolling forecasting.
The Benefits of Adopting Rolling Forecasting in Healthcare
One of their first tests came when volumes and finances were impacted seemingly overnight come mid-March. Traditional budgets suddenly became irrelevant, encouraging many organizations to use this last year as an opportunity to move from a budget-based culture to a performance-based culture for stronger change management in healthcare.
Luckily for Allen’s team at OSF, they had already prepared somewhat since they had been in dynamic planning for some time, having taken the formal budgeting process out completely in October of 2019. “On March 14, I looked at my team and said, ‘I need a forecast ASAP on what’s going to happen, based on what we see unfolding in front of us,’” said Allen.
Within two weeks, his team produced that forecast. “[The forecast] really helped us with the great success we had,” he continued. “It helped us navigate this uncertain period.”
In 2015, McWhorter’s team at Texas Health worked with their board to develop a financial sustainability policy that could help guide the organization using financial planning to approach and survive black swan events. Their top priority was strengthening their balance sheets enough that even through a crisis like COVID, they could continue to provide the communities they serve with the healthcare they would need.
When elective surgeries were cancelled and their surgeries were at 23 percent, their attention on volumes and statistics allowed them to focus on their plan for the next 30 to 90 days to reclaim lost volume.
As a team that traditionally used an annual budgeting process, Texas Health is currently developing tools around financial planning and healthcare rolling forecasting. “One of the things we learned very quickly was that we needed to move to more of a data driven approach,” said McWhorter. “We’re now looking at a quarterly rolling forecast model and OSF’s team has been very gracious in sharing with us about how to do that.”
Allegretto credits his team’s long history with Strata to Yale New Haven’s ability to adapt and overcome so much uncertainty this last year.
“For the first time in my history, we’ve re-forecasted a dynamic budget for the next nine months based on the first three months,” said Allegretto. “We’ve never had that nimbleness built into our plan. And if it weren’t for the rolling forecast, we wouldn’t have been able to achieve that.”
Using Healthcare Cost Accounting to Impact the Cost of Care
Another significant shift in focus for hospitals and healthcare systems as a result of COVID-19 has been on cost of care as volumes and revenue have decreased—especially with the Hospital Price Transparency Rule taking effect on January 1, 2021.
For Allegretto’s team at Yale New Haven, merging cost data with patient specific data and billing data has made way for crucial conversations with their clinical colleagues to not only take a look at driving elimination of clinical variation but looking at what that means from a cost perspective.
With the help of Strata his team was able to marry clinical quality data from Epic with cost accounting to produce quickly accessible, actionable information for clinical and finance leaders. By identifying variations in cost and quality, the organization to save more than $150 million.
For the team at Texas Health, even as they approached 2020 pre-COVID, their big focus had been on productivity and reducing the cost of care. With more than 50 percent of costs related to the “people side” of the equation, they knew that’s where the biggest impact would be—and as it turned out, they ended up needing to increase staff, which served them well to have a readily trained workforce that could handle the increase in caseloads.
As a longtime EPSi client, Texas Health is currently working with Strata on accelerating the development of a real time productivity module that will be made available to as many other teams as possible.
Change & Acceleration in Healthcare Strategies
For many organizations, COVID-19 has not only forced changes in their healthcare strategies, it’s accelerated those changes and new processes. These changes will for the most part remain permanent in how they operate and plan moving forward.
At both OSF and Texas Health, COVID-19 forced a rapid increase in the scope of their telehealth programs.
Already well down the path with virtual care, OSF created a “COVID-19 at Home” program, which they still continue today, and which has served well over a thousand of encounters.
“It’s helped us accelerate our platform for virtual care and all of its elements,” said Allen. “It’s helped us build some muscle there that will serve us well in the future.”
Texas Health went from zero telehealth appointments the week of March 20 to 8,500 a week within 30 days.
Both Allen and McWhorter agreed that with the help of programs like telehealth, outside the walls of the hospital is where organizations can start to work on that total cost of care.
Never Has Healthcare Decision Support Been So Important
Although this last year has created challenges like they’ve never seen in their profession, Allegretto, Allen and McWhorter all have taken important lessons from what’s also been the most important year of their careers.
Allegretto reflected on the things he took for granted before COVID-19. “Simply being in the same room for meetings with others across the organization is so important for the relationships your build and the trust that comes from those relationships,” he remarked. “It’s so important to be on the same team across the organization.”
For McWhorter, a welcome recent change has been the ability to hope.
“Whether it’s the surge declining a bit or the vaccine coming out, it’s the hope that keeps you working seven days a week through a pandemic,” he reflected. “If I were to exit the organization today, I’d say I’m most proud of protecting our team with PPE. That’s been the most important.”
And for Allen, the last year has brought humility and it’s unveiled a tremendous amount of pride in his team.
“It feels like a capstone project that we’ve worked on for five years, building the financial rigor that we needed to build to protect the entire organization and sustain it through this event,” he said. “Despite what’s come of a terrible situation, there were old ways we knew we should have gotten rid of and having our business disrupted was a light to progress.”