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Can CFOs Roll With the Revolution?

June 22, 2010
by Mark Hagland
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This year, the Healthcare Financial Management Association (HFMA) has branded itself as being all about change. HFMA's annual ANI conference, being held in Las Vegas this week, has the words "healthcare reform" plastered all over it, and in its conference program, HFMA's leaders have even designated the descriptions of healthcare reform-related sessions with a little capital "R" inside an orange disc, just in case attendees didn't realize that sessions like "The Private Sectors Impact on Healthcare Reform" addressed healthcare reform. It's all about reform. Got that yet? In addition to the conference's program guide having the subheading "Landmark Healthcare Reform" right under the words "Program Guide" on the catalog's cover, the phrases "Cost/Quality," "Physician Integration," "RACs," and "Revenue Cycle" are displayed prominently.And certainly, the titles of many of the sessions have been change-oriented and interesting-sounding. But one wonders, in overhearing attendee conversations, whether hospital and health system CFOs are hearing the alarms sounding yet--even though, like CIOs, CFOs are inundated with change-oriented "must-do's." CFOs are having to quickly get up to speed on accountable care organizations (ACOs), bundled payments, quality-based purchasing, the potential for reimbursement cuts for unnecessary rehospitalizations, and a host of other issues coming out of the federal healthcare reform legislation passed in March. At the same time, they are having to learn, quickly, about the basics of meaningful use and issues around ARRA-HITECH. Though it would be terrible strategy, one could understand on a purely human level why some CFOs might prefer to take a long (several years' worth) nap and wake up in, say, 2016, when things will presumably have settled down a bit. In fact, the most interesting conversation (and I've had several) that I've had so far has been with Doug Thompson, the vice president, business advisory services, at the Emeryville, Calif.-based MedeAnalytics, which is promoting new consulting services that will help CFOs (and other c-suite executives) assess and strategize various types of financial risk, including from provisions and elements of federal healthcare reform, and from meaningful use/ARRA-HITECH. Doug and I discussed what level of awareness CFOs might have right now regarding both areas, and I said honestly that my perception was that the average CFO was like the average CIO, though, because of the differences in the situations, the average CFO right now knows more about healthcare reform, whereas the average CIO knows more of course about meaningful use. Still, there are so many hospital organizations across the country that remain, if not at the proverbial back of the bus on these intensely important and big issues, certainly, in the "back half" of the bus. What's fascinating to me is that the very kinds of services that MedeAnalytics is promoting, and, if executed well out in the field, would be precisely the ones most needed right now both by CFOs and CIOs, around two of the biggest federal policy-driven baskets of changes hitting healthcare, more or less simultaneously. CFOs, CIOs, and all other c-suite executives, and boards, really do need to strategically assess the whole range of elements that will affect their organizations, and need to consider both strategically and in granular depth the literal and figurative costs of taking action, delaying action, or not taking action at all. Yet the reality of healthcare is that there remain a small percentage of true pioneer organizations (perhaps five percent, depending on the issue?), followed by perhaps, depending on one's perceptions, another maybe 15 percent that are assertive close followers, followed by a disturbingly large percentage who are either in the back half of the bus, or seriously in the last couple of seats--meaning that our industry remains concerningly short on the kinds of action-oriented thinking required at this pivotal moment in our industry's (and country's) history. So the success of organizations like the consulting arm of MedeAnalytics will depend precisely on the readiness of CFOs, CIOs and other c-suiters to take responsibility and begin actively preparing for massive change at a time of great uncertainty. Still, just as CIOs are facing numerous burning platforms forcing them forward at a pace they would otherwise not choose, so CFOs are being forcibly marched forward by the current press of events, developments, and policy, regulatory, and reimbursement changes and mandates. So perhaps there is hope after all that executives and leaders in hospital organizations across the country will think and act with the alacrity necessary. But here's the thing: a revolution can start without the majority of any citizenry being a part of it, or even being aware of it. And those who fail to heed the sound of the sirens have no slack cut for them when the inevitable waves of change begin to crash against their shores.

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Mark Hagland

Editor-In-Chief

Mark Hagland

@hci_markhagland

www.healthcare-informatics.com/blog/mark-hagland

Mark Hagland became Editor-in-Chief of Healthcare Informatics in January 2010. Prior to that, he...