Finance Thought Leadership

Navigating Healthcare Finance in 2021: Challenges and Strategies

The State of Healthcare Finance in 2021 and Looking to 2022

A panel of experts weighs in on the challenges finance teams have faced and how hospitals can prepare for the coming months.

It’s a vast understatement to say that 2021 was a tough year. Hospitals around the world have been tested in unimaginable ways due to the pandemic. At IMUG 2021, Renay Hellickson, Director of Implementation Services and former CFO of the Palo Alto County Health System, spoke with veteran Healthcare CFO’s about how they navigated the pandemic, financial challenges in healthcare in 2021 and what’s keeping them up a night about 2022. The participants were:

  • Tanner Wealand, Chief Financial Officer, Clay County Medical Center
  • Jennifer Kachersky, VP of Finance, Life NWPA
  • Tanya Sharp, President/CEO, Boone County Health Center
  • Misty McPherson, Director/Revenue Cycle, Wipfli LLP

Telehealth is reducing but it isn’t going away

When COVID first broke out, the industry shifted to telehealth for most of its services. Many institutions had never offered the service previously. There were many lessons learned in real-time. Although the adoption of virtual medical services was overwhelming in early 2020, the use of the service has levelled off.

A recent report from McKinsey & Company found that the use of telehealth is still thirty-eight times higher than pre-pandemic levels. The panel has found that although Telehealth poses challenges and isn’t right for all treatments, it can become a valuable tool post-pandemic.

Jennifer Kachersky:
We transitioned most of our center staff into home care. So it’s actually been a huge shift, but it’s been actually going very well. Really nobody wants to grow old and end up passing in a nursing home. They’d rather be in their own homes. So the more that we can raise focus and develop new programs in areas that don’t have PACE programs, I think seniors will be better served and be able to live longer, more fulfilling lives.

Tanner Wealand:
There were some mandatory shutdowns just due to some government requirements for a couple of months early on in the pandemic. So we had to adapt that quickly, which fortunately we were able to get some telehealth cards and get those established pretty early on in the pandemic. In our experience, we’ve discovered that our demographic, prefer face-to-face visits. Technology’s an obstacle for every generation, but when you’re serving a heavy Medicare population, they do not like telehealth for all instances. So we are glad to get back to face-to-face where it makes sense, but we still are doing telehealth visits.

Tanya Sharp:
We’re very heavy in the Medicare age population. About 65% of our population is over the age of 65. We had wanted to implement telehealth but just didn’t know how to. COVID gave us that extra little nudge to get it moving along. Very similar to what Tanner’s experience was, we found that it worked at the beginning, but people really enjoy that face-to-face visit. We still offer it, but it’s definitely not as robust as when COVID first hit. But just being flexible has been the best way that we’ve coped.

Misty McPherson:
I think going forward it becomes a matter of figuring out how to use Telehealth to your benefit.

You can potentially see up to 30 patients a day in 15-minute increments, and which frees up time for people to be in the ER’s, the labs, have physicians on the floor and those kinds of things.

We’ve really been working with several hospitals to help them push for telehealth because it free’s up that nurse that works at the RHC or the clinic level to be over in a hospital. The pandemic has been horrible because we have lost so many lives but I’ve also seen positives where these new processes and technologies have helped increase revenues.

Retention is still an issue

There are many reasons for the current staffing shortages; an increasing number of sick patients, pandemic burnout as variants still cause issues, conflicts over vaccine mandates and more. The issue is so prevalent, the USA government has now committed $100M to help address the labour shortage.

Rural communities have been the most affected, as it had been challenging to hire and retain medical professionals prior to COVID-19. Our panel spent a significant amount of time discussing how the shortage has impacted them and the ways they’ve tried to solve it.

Tanner Wealand:
So we’ve lost nurses and subsequently, to pay for travel nursing is hugely cost-prohibitive. We’ve looked at this from lots of different angles. We’ve looked at pay scales to make sure we’re still competitive. We’ve looked at targeted retention bonuses and areas of basically RN, LPN, CNA, and some other areas that maybe aren’t as widely known, but we’re still seeing issues within our hospital.

We really had to work together to develop a strategy to tackle this. And we don’t have the secret sauce yet. I don’t know if anybody does, but we’re sure trying lots of different things to make sure we keep our good folks here and we recruit the best that are out in the market.

Tanya Sharp
We are in rural Nebraska and there are not many people knocking down my doors with nursing degrees. We actually just recruited two new physicians to join us in July of 2022. And that’s great that we have these physicians coming, but we don’t have nurses to work with them. They can be travellers or work for the school system that has attractive hours and holidays off. How do I compete with that?

Our administration team has tried to come up with strategies on how we become the employer of choice in rural Nebraska. We’re looking at are retention and sign-on bonuses. We are considering things like tiered retirement status for long-time employees. Do we offer paid time off as soon as they start? Because some people don’t want to leave their job because they have this large pot of paid time off. So would they come to us if we gave that to them right off the bat? So there’s been a lot of brainstorming and throwing spaghetti against the wall to see what’s going to stick and what’s going to recruit people to our organization.

Misty McPherson:
We have helped promote what we consider FTO (Flexible time off). You don’t have to give them cash but during downtime, they can have time off to take care of themselves and their health. It doesn’t cost the employee to take from their vacation time, and they get half a day or maybe a full day to emotionally recover. We also try to promote career longevity in our smaller hospitals. The dollars may be better somewhere else, but you’ve got permanency here.

The healthcare finance professional of the future

The last two years have not only dramatically changed healthcare professionals but changed the lives of finance professionals. They have had to balance new priorities and finds new ways to manage a hospital’s financial challenges in healthcare. At Multiview, we have touched on what we think the coming years will bring. However, we wanted our panel of experts to weigh in.

Jennifer Kachersky:
I think just the expectations are going to shift. I think where it used to be more finance, people will be thinking about the bigger picture. You’re going to take the numbers and put them together in a bunch of different ways. I also think the healthcare finance professionals will be overseeing more diligence efforts, as well as quality and compliance.

Tanya Sharp:
I think we need to look beyond the four walls of the hospital. For resources, but also in regards to how we deliver care. What does that look like? Maybe it is telehealth. We are going to be moving from a fee-for-service into a high-quality, low-cost model. So how do we deliver high quality at a low cost and be able to meet the patient’s expectations, but also the payer’s expectations? So there’s going to be a lot of pressure on the financial side of healthcare.

Tanner Wealand:
I see finance teams taking that bigger, more strategic role. I think we’re really looking at automation solutions, accounts payable, and the revenue cycle. I know big facilities have been using it for a long time, but I think even it’s going to trickle down to smaller ones to help control costs. Sometimes the technology’s a little bit scary, but I think we’re going to have to look at those options and see what we can automate and not continue manual entry by a person.

Misty McPherson:
A lot of times I hear, “Well, that’s how we’ve always done it. And we know that we have a growing AR, but we don’t know how to work on this denial,” I have some CAHS that have eight to 14 million sitting on their AR, and it’s because they don’t have qualified or people that understand the processes in order to be preventative instead of reactive. And that’s cash that’s wasted there. So I want to focus on how we preserve revenue. We need to look at people, processes and technology in order to do that.

If you missed this panel at IMUG 2021 and would like to hear more strategies these healthcare finance professionals are implementing over the coming months, you can watch the recording here:

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