Navigation Links
Intersection of Financial and Regulatory Forces is Broadening Roles of Healthcare CFOs
Date:6/24/2008

Ernst & Young Report Reveals Healthcare CFO Perspectives on Top Industry

Challenges

LAS VEGAS, June 24 /PRNewswire/ -- With the US healthcare system on the threshold of change, healthcare chief financial officers feel the need to anticipate change and begin the process of business transformation before the arrival of any public policy mandates. CFOs face daunting challenges, and their insights on the state of the industry are revealed in a new report released today by Ernst & Young LLP: Healthcare change: Reform or transformation? A CFO perspective.

Based on confidential and candid discussions in two forums with 23 CFOs from leading US healthcare systems earlier this year, the report provides a picture of an industry in financial distress through the eyes of healthcare financial executives.

"As resource pressures mount and regulatory oversight intensifies, CFOs can expect their financial management skills and their policy management expertise to be sharply tested," said Rick Wallace, Managing Partner for Ernst & Young's Health Advisory Services practice. "Leading CFOs now must embrace their role as change agents, analyzing risks and strategies to help guide their companies through a difficult transition, which is nothing short of an industry overhaul."

The forum participants concurred on seven critical issues likely to reshape the industry in years to come.

Paying for healthcare: Hospital finances are being eroded by the growing numbers -- now 47 million -- of uninsured and underinsured. Aging populations, expensive drugs and technology, rising labor costs and hospital obligations to provide care -- regardless of ability to pay -- have combined to create a perfect storm for the industry. Stepping up workforce productivity is seen as the only last chance to improve margins. CFOs agree that curbing the escalating costs must be at the core of healthcare reform.

Access to capital: While many hospitals are experiencing a construction explosion -- with spending on new hospital facilities up 47% over the last five years -- capital is not growing as fast as demand. Lower credit ratings and tighter credit markets have both played a role. With few options, CFOs are seeking greater consolidation of resources and organizations. Merging hospitals can bring savings, potential gains in technology, more leverage with suppliers and power to negotiate with large insurance companies.

Physician relationships: CFOs are seeking to develop more mutually beneficial relationships with physicians to gain a competitive advantage and align with this stakeholder group on reforms. To this end, CFOs see the need to move toward hospital employment of physicians and joint ventures with physician-owned businesses.

Workforce issues: With supply of nurses and other hospital workers falling far short of demand, the cost of labor is skyrocketing. While numbers of qualified applicants to nursing schools is on the rise, dwindling numbers of faculty mean many applicants are turned away.

Quality and pay-for-performance (P4P): While P4P proponents have argued that initiatives will drive dramatic reform in the delivery system, CFOs see goals falling short with incremental improvements at best. CFOs have invested significant sums on quality measures, yet there are few measures to gauge long-term outcomes. The need is great, participants said, to involve doctors in the fabric of hospital leadership and to collectively take ownership for quality.

The race for new technologies: CFOs observe that pressure on providers to invest in new clinical and information technologies is unprecedented. Yet CFOs say new technologies, often enormously expensive, do not always produce improved outcomes or a return on investment. In response, CFOs see scale as one answer. As hospitals consolidate, duplication will be avoided, and expenses and technology purchases can be better leveraged.

Transparency and community benefit: The demand for transparency is great in areas of patient safety, quality of care, and costs and charges. And not- for-profit hospitals are required to disclose even greater detail on bad debts and collection policies, charitable care and community benefit. CFOs point to a very full and growing compliance agenda that must be managed and integrated into business operations.

"The urgency is accelerating to find solutions that better align the interest of payors, consumers, employers and providers," said Ian Morrison, healthcare futurist and leader of one of the Ernst & Young CFO forums. "Deep reform is needed to solve the issues of affordability and quality -- transforming the delivery system to make it better, faster and cheaper than the one we have today."

For a copy of the report, or for more information on Ernst & Young's healthcare provider practice, visit our website: http://www.ey.com/us/healthsciences.

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.

For more information, please visit http://www.ey.com.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. This news release has been issued by Ernst & Young LLP, a member firm of Ernst & Young Global Limited.


'/>"/>
SOURCE Ernst & Young
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Research and innovation at the intersection of physics and health sciences
2. TransUnions Enhanced Revenue Manager(SM) Improves Patient Financial Assistance, Assessments and Hospital Productivity
3. American Scientific Resources, Inc. Discloses Reviewed Financials
4. Symmetry Medical to Report First Quarter 2008 Financial Results on June 24, 2008
5. As Consumers Feel Financial Burden of Increasing Health Care Costs, Health Plans Have Opportunity to Address Unmet Consumer Needs and Become Trusted Advisors
6. Shanghai Medical Technology Co., First Quarter 2008 Financial Results
7. The Quantum Group Announces Second Quarter Financial Results for Fiscal Year 2008
8. Financial Incentives Could Improve Organ Donation and Reduce Donor-Recipient Gap
9. China Yingxia International, Inc. Appoints Chief Financial Officer
10. Chem Rx Corporation Appoints Gary M. Jacobs Chief Financial Officer
11. Alphatec Spine Names New Chief Financial Officer
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/9/2016)... Cambridge, MA (PRWEB) , ... February 09, 2016 ... ... Institute (WCRI) compares the workers’ compensation fee schedule rates and Medicare rates for ... medical services covered in the report, Evaluation of the 2015 Fee Schedule ...
(Date:2/9/2016)... ... February 09, 2016 , ... On January 12, 2016 Paul ... appointment after they noticed their furnace not producing any heat. Shortly after entering the ... cracked heat exchanger was leaking dangerous levels of carbon monoxide into the home, at ...
(Date:2/9/2016)... ... February 09, 2016 , ... ... guide will ensure lab personnel have a basic understanding of the techniques they ... protocols. Enhanced understanding will help them reduce waste and rework to create a ...
(Date:2/9/2016)... ... 2016 , ... i2i Systems, an early innovator and developer of population health ... latest KLAS report, Population Health Management 2015: How Far Can Your Vendor Take You? ... management (PHM). The latest KLAS Report, leveraging over 200 user interviews, shines a ...
(Date:2/8/2016)... ... February 08, 2016 , ... ... BASF Human Nutrition into the Food & Beverage and Dietary ... BASF’s channel partner throughout Canada and USA geographies east of the Rocky Mountains ...
Breaking Medicine News(10 mins):
(Date:2/9/2016)... LONDON , Feb. 9, 2016 Hearing ... amount of sound energy transmitted to the inner ear. ... and hearing bands. These devices are recommended for users ... eight hours. Earplugs refer to HPD that are inserted ... attenuation earplugs are designed to provide more natural sound ...
(Date:2/9/2016)... -- Increasingly, health care professionals are enhancing patient care and ... With the Vios Monitoring System from Vios Medical, health ... problems before they become serious by continuously tracking and ... the United States . --> ... --> The Vios Monitoring System connects patient-worn sensors, ...
(Date:2/9/2016)... -- The new report "Global Anti-Bacterial Drugs Market Assessment & Forecast: ... reveals that the North America continued to ... 2014 that translated into revenues worth US$ 16,907.3 million. ... Asia-Pacific , Latin America , ... The global anti-bacterial market is inclined towards North America ...
Breaking Medicine Technology: