As healthcare moves from fee-for-service to pay-for-performance, population health management is changing how Chief Financial Officers (CFOs) of health systems approach their roles. Population health aligns quality with revenue, which then aligns the goals of CFOs with Chief Medical Officers (CMO) and Chief Quality Officers (CQO) more closely than ever before. Mark Bogen, CFO and senior vice president of finance of South Nassau Communities Hospital in Oceanside, N.Y. describes the shift for CFOs in this recent Becker’s Hospital Review article:
“I think the biggest thing is CFOs…they’re going to have to continue to get out of their comfort zone with the traditional financial indicators that predict revenue, that predict cash flow, and be more aware of where we’re headed, how many lives are we covering and the utilization and the outcomes attached to the clinical pathways that we’re allowing access to,” he says. “I know that’s a tough thing to get used to, but quality and outcomes are where it’s at, so you’ve got to be in that loop.”
Population health presents an opportunity for CFOs to increase margins through lower costs, shared savings and bundled payment programs, and increase revenue through the addition of other risk-based agreements. To realize those benefits, CFOs should understand the key requirements of population health solutions as much as the CMO and CQO and participate in the evaluation process as a key stakeholder. For population health to successfully increase margins and revenue, providers need solutions that can:
1) Aggregate and normalize all data (e.g, clinical, claims, financial) across all systems.
2) Apply analytics to that data to stratify populations down to an actionable number of patients with the highest ROI.
3) Surface data and analytics at the point-of care in near real-time to guide decisions and improve productivity.
Without these capabilities, investments in population health solutions run the risk of underperforming on quality improvement and therefore, not delivering ROI. As the internal subject matter expert on ROI and the owner of financial performance, CFOs should play an important role in population health as it can help pave a stronger financial path for their organizations. I believe that having more stakeholders aligned around quality is the first step to drive better patient outcomes, so I look forward to having more conversations with CFOs about population health.