Chief financial officers and other financial executives attending the Healthcare Financial Management Associations 2009 Annual National Institute in Seattle last week were given advice about how to deal with an operating environment that is more difficult than it used to be and likely to get worse.
Tough times could get tougher
Attendees concerned over possible reimbursement cuts
Although much of the buzz at the conference concerned federal reimbursement cuts proposed by President Barack Obama just before it began, the initially estimated 4,000 people who attendeddown 15% from the previous yearalready had plenty to be concerned about, according to presenters.
Kicking off the convention was some advice from the HFMA. To prepare for healthcare payment reform being debated by Congress and the White House, hospitals must focus on integration with physicians, improving quality and promoting prevention, the HFMA said in a white paper released on the opening day, June 15. All signs point to changes in payment streams that will provide the incentives for hospitals and other providers to collaborate to reduce costs and improve quality, the Westchester, Ill.-based association said in the second of two papers on how to overhaul the industrys financing. In June 2008, the HFMA unveiled its proposal for payment that put financial incentives at the heart of efforts to curb healthcare inflation and improve access.
Robert Broadway, the immediate past chairman of the HFMA who is vice president of corporate strategy for Bethesda Healthcare System, Boynton Beach, Fla., opened the June 15 keynote session with a list of realities that the associations members are facing. Patient volume is down. Bad debt is up. Margins are declining. And capital is hard to find, Broadway said. Hospitals more than ever before will be held accountable for demonstrating that they provide affordable, high-quality care to patients, he said.
HFMA Chairwoman Catherine Jacobson, senior vice president of strategic planning and finance, CFO and treasurer at 676-bed Rush University Medical Center, Chicago, continued the theme of rising to the occasion. Jacobson followed with her list of woes facing the healthcare industry and drew the first laughs of the morning session by quipping, I cant remember a single day in which I was bored. She also urged the attendees not to take matters lying down. Get your head up off the desk and face the next challenge, Jacobson said. Lets all go out and make it count.
An official from a different association had advice for executives preparing for new tax requirements. Hospitals reporting free care and other subsidized aid to the Internal Revenue Service starting in tax year 2009 seemingly must have formal charity-care policies and community needs assessments to do so, said Julie Trocchio, the Catholic Health Associations senior director of community benefit and continuing care.
Hospital disclosure on Schedule H of the newly redesigned Internal Revenue Service Form 990 instructs hospitals to report charity care as identified under its policy for free and discounted care, which creates an unstated IRS requirement for such policies, said Trocchio, in a session held in advance of the conference on June 14.
Hospitals may soon have another outlet to refinance debt. The Housing and Urban Development Department is expected to announce shortly that hospitals seeking to refinance debt may do so through the agencys insured mortgage loans, which extend the governments gilt-edged credit, an agency official told attendees on the final day of the meeting, June 17. William Lammers, a health system adviser with HUDs insured healthcare facilities office, said that proposed changes on a fast track will remove an existing requirement that hospital borrowers use at least 20% of a federally backed loan for new construction. Lammers said that the agency hopes to announce approval for the changes in the coming month.
See modernhealthcare.com/section/liveat for additional news and videos from the HFMA conference.
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