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At the Margins

Our latest insight into health care margin improvement efforts

What CEOs should know about their CFOs

July 11, 2014

Managing Director Christopher Kerns recently finished a series of interviews with dozens of hospital and health system CFOs to find out how their roles are changing.

Two of his top takeaways? CFOs are spending more time than ever with physicians, and they're expected to increase their involvement in strategic planning. 

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'It's not my fault!': Four tips for talking to physicians about performance

Sandra Miller July 1, 2014

We all know that sharing performance data with physicians can lead to meaningful documentation improvement. But what do you do when your physicians don’t want to listen?

When approached with performance data, physicians may respond with anything from full acceptance to flat-out denial—as we know firsthand from conversations with physicians through our Physician Documentation Initiative.

Regardless of physicians' initial responses, we've also seen how slight tweaks to your messaging make a difference in ensuring your physicians buy in to improving their performance data.

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Hospitals offer 'patient-friendly' payment plans

Robin Brand June 25, 2014

Some medical professionals offer medical credit cards and lines of credit that allow patients to pay for procedures not covered by insurance. First made popular about a decade ago for cosmetic surgery and other elective procedures, the cards and loans can now be used to cover out-of-pocket expenses for basic care.

But such cards often come with interest rates of up to 30%—and that amount can increase substantially if patients miss payments.

Now, an increasing number of hospitals are offering a more "patient-friendly" option: no-interest payment plans that make it easier for patients to pay their expenses.

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How to rightsize your workforce and avoid layoffs

John Johnston June 10, 2014  | Comments (1)

In my last post, I discussed Cleveland Clinic’s tactical approach to labor cost reductions and how hospitals should set their future labor targets. But once those targets are set, how do you make sure your hospital reaches them in a timely manner?

Other than layoffs, there are a few strategies that are frequently deployed to reduce the workforce to the extent most hospitals need.

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The IRS blocks exchange 'dumping'—sort of

June 5, 2014

Last month, the IRS announced that companies offering money to employees for buying health insurance on public exchanges or in the individual market will still be subject to the Affordable Care Act’s employer mandate penalty. Creative employers were exploring these “payment plan models” to reimburse workers for insurance premiums or out-of-pocket expenses as a way to avoid fines ranging from $2,000 to $3,000 per employee.

Private exchanges, self-funded plans, and traditional employer-sponsored health insurance are now the only coverage options that meet new group plan requirements effective next year.

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Memorize two numbers to maintain your margins

Robin Brand June 2, 2014

A lot of my recent discussions with CFOs and finance executives have centered on the worry they have around coverage expansion and how it will impact provider margins.

The anxiety is understandable. Most providers have realized that increased coverage via Medicaid expansion and the public exchanges will not have the positive effect on uncompensated care that may have been expected. Shifts in the type of coverage patients have hold the potential to wreak havoc on margins.

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Demystifying the finances of your development department

May 29, 2014

This is a guest post from our colleagues with the Philanthropy Leadership Council.

Jennie Light, Katie Stratton

How will philanthropic dollars impact your margins? What philanthropic dollars can you count on for strategic planning purposes? Why do philanthropy production reports look like funny math?

Sound familiar? We've heard these questions time and again in our conversations with both finance and development leaders.

So when system integration at the University of Michigan Health System necessitated a stronger partnership between their development and finance departments, the Philanthropy Leadership Council sat down with leaders from both departments. Once everyone understood how they built their relationships and began speaking a common language, they were able to demystify the misconceptions between finance and fundraising.

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Despite the ACA, hospitals will struggle with uncompensated care costs

Robin Brand May 23, 2014

A new study in Health Affairs found that uncompensated care costs were between $75 billion and $85 billion in 2013, and that coverage expansion through the Affordable Care Act (ACA) will not eliminate that burden for providers.

Although the ACA expands affordable coverage options for millions of Americans, the Congressional Budget Office estimates that 31 million U.S. residents will remain uninsured by 2024.

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