Many health system chief financial officers (CFOs) define the risk- adjusted return on their electronic health record (EHR) investments as less than acceptable, or never expected a return in the first place, according to a recent survey from the Campbell, Calif.-based SCI Solutions.
The report, “CFO Priorities in Today’s New Value-Based System of Care,” published on March 11, asks CFOs questions about working capital as it relates to complex government mandates and reform investments—and also asks questions about the value of these investments themselves. The survey used the American Fork, Utah-based peer60’s Reaction platform, and included more than 150 hospital CFOs and other finance executives
Specifically, 44 percent of CFO respondents described the risk-adjusted return on their EHR investments as “adequate,” followed by 19 percent who described it as “less than acceptable,” and 17 percent who indicated that the return was “unclear.” What is most interesting is that only 16 percent of CFOs surveyed never expected a return in the first place—perhaps in recognition of the reality that EHRs were designed for a very specific purpose: to collect and digitize information within the four walls of the health system, the survey’s researchers concluded. “When considering the reality that nearly all incremental revenue and contribution margin opportunities originate outside health systems in care communities, EHRs cannot be expected to deliver beyond what they were designed to do, and are best regarded as a cost of doing business—a fact respondents echoed,” they said.
What’s more, CFOs say better provider management utilization will drive out costs from their organizations. There is CFO consensus that better managing provider utilization will drive out costs from health system organizations, linking cost reduction to efficiency. Fifty-nine percent of CFOs stated that their approach to driving out costs was through better managing provider utilization. With volumes decreasing, access management is all the more important. There is greater need to drive patients toward the health system and service appropriate patients, using existing capacity efficiently and effectively, the researchers said. Fifty-six percent of CFOs believe that centralizing and standardizing administrative functions—and 51 percent believe replacing manual processes with information technology—will drive out costs, further supporting efficiency as a CFO priority.
Additionally, CFOs say that health system revenue growth depends on collaboration with community partners. A large majority of CFOs have a strategic focus with their provider community—and recognize that they will need to collaborate with their community partners in order to generate revenue. Ninety-two percent of CFOs stated that future revenue growth was reliant on collaboration with community partners, and 90 percent have or somewhat have a strategy in place to collaborate.
Ten years ago, the hospital profit base was 64 percent inpatient and 35 percent outpatient, but in this new value-based world, those numbers have flipped. For years, CFOs have recognized a need for health systems to better integrate and collaborate with trading partners. “This suggests that CFOs will be in search of new ways to fulfill this mandate. We can expect to see greater emphasis placed on health system and independent provider relationships and engagement strategies, as well as tools for managing these priorities and co-creating value,” the researchers said.