New Mission Health CFO Targets Growth, Costs, Value, Efficiency

Christopher Cheney, February 13, 2018

When you do the math, we may have a 1.5% annual revenue increase; and meanwhile, expenses are going up 3% to 5% depending on the category. So, we have an imbalance between inflationary pressures in expenses and the low rate increases on the revenue side that create a continual need for cost savings.

HLM: Is it possible to achieve cost savings that will make up that gap?

McDowell: The next generation of cost savings relates to supply and drug utilization. We have been working the unit-cost side of supplies and drugs for a long time—trying to make sure that we have the best contracts and the lowest prices.

Now, we have transitioned to focusing on the utilization of supplies and drugs. So, we have much more standardization and make sure we are using a supply that not only has a good price but also represents the best supply item for a particular need. We are getting physicians to work together to use the same supplies in the same circumstances, which creates buying power for us.

One of the most important clinical advancements at Mission Health over the past two to three years is the development of dozens of care process models, where groups of clinicians determine the best, most evidence-based approach to a given disease or condition. These models are then imbedded in the EMR and tracked through our data warehouse. The development of these care process models has systematically standardized care, improved quality, and reduced cost.

HLM: Are there other ways to close the health system's finance gap?

McDowell: We also are focused on making improvements to revenues. This includes reducing payment denials, improving the accuracy of clinical documentation, and reducing patient outmigration so that they can have care closer to home. Over the past four to five years, revenue improvements have made up approximately 30% to 40% of our annual margin improvement initiatives.

HLM: How are you preparing for the shift to value-based care?

McDowell: We are preparing for the future and the value-based world, but most of our business is still in fee-for-service. So, living in that dual world is a challenge every year and we are systematically preparing for the future. We have an accountable care organization that has more than 60,000 members—that is a significant population and an interesting opportunity from the gain-share perspective. Despite having a low spending target compared to others nationally in the Medicare Shared Savings Program Track 1, we saved the federal government just more than $11 million last year.

Our performance level is indicative that we are successfully transitioning to the value-based world. Looking forward, we are continuing to focus on improving performance and outcomes.

HLM: Do you have any other optimization goals?

McDowell: We have goals for IT investment in the revenue cycle to make sure that we are continuing to improve our performance.

One goal is getting the entire organization on the same IT system. Our acute care hospitals all are on the same system, but some of our physician practices are not. We have acquired practices and they have come into the system in various ways, and having multiple IT systems creates an incredible amount of inefficiency. You can't leverage your scale when you are on six or seven IT systems in your ambulatory settings.

A second goal is leveraging technology to optimize the revenue cycle. That includes getting all care settings on the same payment portals, getting patient scheduling on the Internet so patients can self-schedule, and adopting other patient-facing technology that can both improve efficiency and improve patient satisfaction.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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