In the healthcare industry, it seems that there’s always a balance to be struck between providing quality patient care and saving money. One of the reasons this is harder for healthcare professionals is that it can be difficult to project illness and treatment figures and costs. What this means is that financial executives within the…
The Four “Biggest Factors Impacting the Healthcare Business Today”
As part of an ongoing Strata Speaker Series, Strata Decision Technology hosted NorthShore University HealthSystem (NorthShore) CFO Doug Welday. The series invites industry leaders to speak at Strata’s Chicago headquarters on what they consider the biggest issues facing healthcare today. In this session, Welday spoke about his first 180 days at NorthShore and the top challenges he sees facing healthcare organizations today.
“Although I’ve worked at a relatively small number of organizations, I’ve had a lot of different jobs throughout my career,” said Doug Welday, CFO of NorthShore, an integrated healthcare delivery system headquartered in Evanston, Illinois. “Any time I begin a new role, the first thing I do is spend time getting to know the team. Then, I turn my focus to the culture of the organization—how things get done and how decisions are made. Once you get to know the people and the culture, you’re in a much stronger position to make appropriate changes and improvements.”
Welday joined NorthShore as Chief Financial Officer in October, 2018, and began overseeing all financial operations for the system’s four hospitals and Medical Group, including capital structure and safeguarding corporate assets. Since his arrival, NorthShore also announced new market expansion and specialty program development, including the recently announced acquisition of Swedish Covenant Health and creation of a new orthopedic and spine specialty hospital.
By adopting Strata Decision Technology’s planning, analytics and performance platform, NorthShore has begun to facilitate a decision-making process around their financial future. This has enabled the organization to continue to innovate in many areas, including growing its specialty care services and enhancing clinical analytics. As part of its Clinical Analytics Prediction Engine (CAPE), NorthShore has helped to drive highly-personalized, efficient care using sophisticated clinical and operational data to better address a patient’s proclivity for certain outcomes.
In his conversation with Strata, Welday outlined the four “biggest issues” impacting the healthcare industry today. Read on to learn what NorthShore’s CFO sees as the most important megatrends in the healthcare industry.
“I always put demographics at the top of the list,” Welday begins. “We’re experiencing a demographic tsunami as it relates to the changing and aging of our population.” According to the NorthShore CFO, the healthcare industry is seeing an ever-increasing number of patients age 65 and older.
“The aging population will assure that we have a lot of demand for our services,” he said. However, as the payer mix continues to shift toward Medicare, it will fundamentally alter the economics of the healthcare business. For those communities and micro-markets that are aging more rapidly, reacting to the less favorable reimbursement landscape offered by a predominantly Medicare payer mix will be critical.
2. Cost and Access
“This is all about consumerism in healthcare,” Welday noted. “The two things people always talk about are cost and access.” Clearly the healthcare environment and how care is delivered is changing, as patients increasingly demand more rapid access to care and want to know how much it will cost.
“In general, we don’t have effective mechanisms to help patients understand cost. When I say this, I’m referring to both the total cost for a service, but also how much it costs the patient after insurance pays its portion. We need to put systems in place to make this information available.” Welday also emphasizes the need for “access points” for patients to be able to receive services quickly, which is why access platforms like Immediate Care Centers are becoming prolific in the market.
3. Quality and Pricing Transparency
Now, more than ever, consumers and payors are pushing for more information on quality and price transparency. “Historically, this hasn’t been closely linked, but clearly it’s a different world in today’s day and age. Health plans are increasingly demanding better value, and consumers are researching and shopping for care on the basis of price and quality.” says Welday. The ability to provide and link the relationship between quality and price has become paramount.
4. Medicare for All
Welday emphasized the significant financial pressure that would occur with the creation of a “Medicare for All” structure. While “Medicare for All” would radically alter the reimbursement environment for all providers, Welday suggested that some form of this will happen with or without legislative action. With growing Medicare and Medicaid populations and continued pressure from commercial payers for greater value, Welday predicted the payment structure is going to look a lot more like a single-payer system. With regard to these payment and reimbursement trends, healthcare leaders will begin to develop a more consistent, value-based delivery of care. “We’ll need to make radical changes, and it’s going to affect the way we access healthcare, the way providers get paid, and frankly, the availability of services that exist throughout the community.”
In closing, the CFO highlighted the value of planning and analytics tools that Strata’s platform provides.
“In previous years, we weren’t required to understand our business in the way we need to now, to be successful going forward,” Welday concluded. “Planning, forecasting and cost accounting support are critical for us to navigate this future environment of different payment structures, consumer expectations and perhaps most importantly, lower costs for all patients and payors.”