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The Happy Marriage of Hospital Finance and Frontline Operations

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The hospital finance department typically acts as administrator and controller over hospital operations, at least in the eyes of frontline clinicians. Additionally, finance is burdened with the day-today tasks of balancing the books. And all too often, finance thinks they know what their customers want, but customers think that finance is isolated, secretive, and bureaucratic. The hospital finance department needs a makeover. To transition into the role of valued business partner and financial expert, finance needs to reinvent itself by:

Simplifying the flow of, and expand access to, information
Repositioning financial analysts as experts
Understanding what customers value

Learn how these straightforward business practices can support operations in their outcomes improvement efforts, and ultimately benefit the entire healthcare organization.

Published in: Healthcare
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The Happy Marriage of Hospital Finance and Frontline Operations

  1. 1. The Happy Marriage of Hospital Finance and Frontline Operations ̶ Jane Felmlee
  2. 2. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations Many finance offices within the healthcare sector are facing a dilemma. They are consumed with the daily tasks of accounting for the revenue and expenses of the organization, keeping up with new and changing regulations, and simply closing the books. Unfortunately, this leaves little time for them to partner with the operational frontline, but there are remedies for improvement.
  3. 3. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations I was with a finance department that sought to better understand what operational customers valued and needed. By initiating dialog, we heard directly from frontline leaders that the tasks consuming finance were those that operations considered “administrative” or “controller-type.” Although vitally important and necessary, these activities weren’t what the operational frontline valued. Operational stakeholders were surveyed to gather direct feedback.
  4. 4. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations The goal of the exercise was to: Improve communication between finance and its stakeholders, and understand the needs and requirements of their constituents Provide information on how effectively finance was meeting its stakeholders’ needs Help the finance department identify roles/services that stakeholders desire from them Establish a baseline for developing the appropriate trans- formation strategy and associated delivery service model > > > >
  5. 5. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations The survey results indicated that stakeholders perceive that finance spends over 60 percent of its time on administrative and controller-type tasks. FINANCE TASK Stakeholder perception of time spent Administrator Spends time processing transactions and is tactically focused on fulfilling requests. 38% Controller Spends time setting policy and ensuring process and policy compliance. 24% Valued Business Partner Spends time with other business/functional heads. Interested in improving my business metrics rather than finance’s agenda. 20% Finance Expert Spends time providing insight and information to managers on finance issues. 18%
  6. 6. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations Feedback from the operational frontline included comments like: Stop assuming you know what we need Become less siloed Stop withholding information Stop changing the operational definitions and be more transparent about how the data is derived Help us to understand the targets and what is driving the variances Eliminate your paper processes Standardize on a process; it’s tough to manage to targets and processes that continually change > > > > > > >
  7. 7. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Improving Healthcare Accounting in Operations The feedback speaks to the reality of the situation. Staff in finance offices across the country are working incredibly hard just to keep the lights on. … and it’s never enough. It’s a daunting task. The first step is to admit there is a problem. If the organization supports a transition from the current reality to a finance team that teams up with operations to elevate performance across the organization, then it’s time to begin the journey toward reinventing the finance office.
  8. 8. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order Create Simplicity, Transparency, and Trust Cleaning up the hospital finance department back office starts with removing the spaghetti flow of informa- tion, where numerous requests for reports overwhelm analysts as they sift through disparate systems to surface information that will help tell the financial story.
  9. 9. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order Figure 1 illustrates a complex data flow. This is a painstaking process and one that repeats itself each and every month. It definitely creates job security, but there is a better way to redirect this effort from number crunching to one valued by frontline operations. The finance department can work to transform this. FIGURE 1
  10. 10. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order The Enterprise Data Warehouse (EDW) is a safe, central repository of data that is organized and optimized for measure- ment, analysis, and reporting. The true value of the data warehouse is to organize data, provide links across disparate data sources (so the analysts don’t have to), and provide access so analysts and clinicians can “fish for themselves.”
  11. 11. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order Liberate the Financial Analysts The finance office needs to liberate financial analysts from their number crunching activities. Giving them access to a single source of truth where information is standardized and organized for fast access will greatly enhance their support.
  12. 12. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order Jeremy Hope, the founder of the Beyond Budgeting Roundtable, wrote this in his book, “Reinventing the CFO”: …companies today demand far more from their CFOs than simply managing the numbers. They expect strategic support and leadership that can boost manager’s performance throughout the firm and enhance the bottom line.”
  13. 13. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Get the Finance House in Order Begin to reduce the complexity of the analytic infrastructure to start seeing a more controlled and predictable process, and one that improves the job satisfaction of all involved. Instead of waiting for the local Excel guru to export the data to his PC, reformat it, manipulate it, and publish it, the information will be available every morning upon login.
  14. 14. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Understand Where You Stand in the Eyes of Your Customer – What Do They Value? Were you to ask clinical and operational leaders how well the finance team is meeting their needs, their feedback would align pretty closely with our earlier survey. There is such variability across clinical operations in its ability to understand basic financial concepts. This isn’t surprising since most started as compassionate clinicians who treat patients.
  15. 15. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Understand Where You Stand in the Eyes of Your Customer – What Do They Value? Most of them dread the finance aspect of their jobs because we provide them with reports they don’t understand, from a myriad of disconnected systems, in terms they don’t recognize, and ask them to explain variances without access to the information they need.
  16. 16. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Understand Where You Stand in the Eyes of Your Customer – What Do They Value? Finance can step up and help them enhance their basic financial acumen, help them find information to tell the story and help them to run and elevate the performance of their business. The first task for the CFO is to liberate both finance and business managers from huge amounts of detail and the proliferation of complex systems that increase their workload and deny them time for reflection and analysis. This means purging their systems, measures, and reports and eradicating work that adds little value.” - Jeremy Hope
  17. 17. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Reinventing the Finance Office Let the journey begin Pick a seasoned financial analyst to pilot a financial liaison role. Consider co-locating that resource with the clinical/operational leader(s) they will support. They can sit side-by-side with the leader during the preparation and delivery of the operational/financial reviews. They will quickly begin to understand first-hand how they can better support these leaders.
  18. 18. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Reinventing the Finance Office Let the journey begin I’m confident clinical operations staff will appreciate the help and will begin to step up their game in terms of running their businesses. This will also allow the operational leader time to reflect on their business and how to enhance their performance.
  19. 19. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. For more information: “This book is a fantastic piece of work” – Robert Lindeman MD, FAAP, Chief Physician Quality Officer
  20. 20. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. More about this topic Link to original article for a more in-depth discussion. The Happy Marriage of Hospital Finance and Frontline Operations Surviving Value-Based Purchasing in Healthcare: Connecting Your Clinical and Financial Data for the Best ROI - Bobbi Brown, VP of Financial Engagement Linking Clinical and Financial Data: The Key to Real Quality and Cost Outcomes Bobbi Brown, VP of Financial Engagement Clinical Data Management: 3 Improvement Strategies Jane Felmlee, Finance Operations Consultant New Ranking Helps Prioritize Your Healthcare Cost Reduction Efforts With Surprising Results Dale Sanders, Executive VP of Software The Best Organizational Structure for Healthcare Analytics John Wadsworth, Technical Operations, VP
  21. 21. © 2016 Health Catalyst Proprietary. Feel free to share but we would appreciate a Health Catalyst citation. Jane Felmlee joined Health Catalyst in January, 2014 but has worked with the company since 2010 serving as administrative sponsor for the 2nd Health Catalyst client, North Memorial Healthcare, located in the Twin Cities. Jane has worked in healthcare for over 25 years serving in various roles at Mayo Clinic, Park Nicollet, and North Memorial Health Care. Her contributions span the areas of Information Technology, Decision Support, Audit, Accounting/Finance, and Lean Promotion Office. Jane holds a bachelor degree in accounting from the University Of Minnesota Carlson School Of Business and is a Certified Public Accountant (inactive), Certified Information Systems Auditor, and is Lean Certified. Other Clinical Quality Improvement Resources Click to read additional information at www.healthcatalyst.com

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