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The challenges facing children’s and rural hospitals
Julie Lautt, CFO of Avera Health, and Gordon Edwards, CFO of Akron Children’s Hospital
LAS VEGAS – Children’s and rural hospitals face the same challenges as any other health care system and face problems unique to them.
“Our patients don’t schedule their own appointments or pay their own bills,” said Gordon Edwards, chief financial officer of Akron Children’s Hospital. “Parents don’t want to call to schedule appointments. They want to do it on an app. We have the same nursing, reimbursement challenges. More than half of our budget is Medicaid.”
Akron Children’s has two hospital campuses serving eastern Ohio. It is a competitive market that includes the Cleveland Clinic.
Julie Lautt is CFO of Avera Health, a regional healthcare system headquartered in Sioux Falls, South Dakota, that spans 37 hospitals across five states and 72,000 square miles.
“We had to figure out how to keep service local,” Lautt said.
Telehealth has been an important part of access to care for over 30 years.
“We had to be pioneers in telemedicine,” Lautt said. “We started in 1993.”
The “Healthcare Leaders Panel: Insights from the C-Suite” session at HFMA Annual Conference, was moderated by Kevin Holloran, Senior Director of Fitch Ratings.
Holloran asked about one of the biggest problems affecting all health systems: workforce shortages.
The remote team helped keep people local rather than requiring them to come to Sioux Falls, Lautt said.
Avera has been recruiting at high schools and has created its own internal travel program for nurses.
Since COVID-19, people don’t want to go back to the office, Edwards said. To attract and retain employees, Akron rolled out an improved benefits package that includes mental health benefits and a competitive salary.
An aging baby boomer population is helping fuel workforce shortages as this generation retires. The median age is 71, and by 2030, many will be over 75, when health care needs increase.
This is contributing to another major hospital trend: the shift in payer mix away from more lucrative commercial reimbursement and toward more government payments from Medicare and Medicaid.
Competition from disruptive companies like retailers, family health centers, pharmacies and reference labs means finding ways to compete, Lautt said.
“Access is very important and it needs to be quick and easy,” she said.
Edwards said: “I think disruptors are always looking at where we’re not doing well. We’ve seen disruptors come in and realize it’s harder than they thought.”
AI and automation have helped free up doctors’ time, and doctors are the health care system’s biggest expense, Edwards said.
Denials and prior authorizations consume administrative time.
“At the end of the day, 1 percent is really denied,” Edwards said. “All the resources going into denial, it’s a colossal waste of energy.”
Currently, there are perverse incentives rather than collaboration between providers and payers, he said.
Medicare Advantage is finally getting some of the transparency it needs, Lautt said.
“I think there’s enough of a groundswell of support that this is finally coming to light,” she said. “Many in our market have stopped taking MA.”
“We’re focused on our mission,” Edwards said. But on the financial side, he said, “how do we balance all of that?”
Email the writer: SMorse@himss.org
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