How 6 health system CFOs are tackling financial challenges

Running a large health system is not for the faint of heart.

Chief financial officers work behind the scenes, mitigating potential financial disasters, managing investment portfolios, budgeting for new care sites and ensuring the system can pay its bills with, ideally, a little left over.

Related: 5 factors impacting hospital financials in 2024

Those skills have been particularly vital as the industry continues to weather the aftermath of the COVID-19 pandemic. Health system CFOs are still facing high labor costs, reimbursement pressures and demand from an aging population.

Modern Healthcare asked six CFOs how they are prioritizing their challenges and adjusting their strategies. Their responses have been edited for length and clarity.

Jim Molloy, Ochsner Health: "Labor is the No. 1 issue. Look at turnover, staffing shortages and looming staffing shortages throughout the industry. But it goes deeper than labor—it's really the state of the employees across the nation. We need to be able to recruit new positions and retain the talent we have. ... We are looking to work on things that make our employees happier, and many are things that can also make the system more productive. How can we make our processes more efficient, to make work easier for people?"

John Mordach, Jefferson Health: "Our biggest financial priority is to continue on our path to pandemic recovery by restoring our institution’s financial health. One step is to drive revenue growth by expanding our services to attract new patients into our system, improve payer relations and explore additional revenue streams. We’ll also continue implementing numerous operational initiatives underway designed to drive efficiency and cost control, such as reducing length of stay, improving supply chain efforts [and] implementing revenue cycle enhancements."

JoAnn Kunkel, LCMC Health: "Our primary financial priority is navigating the challenges posed by rising healthcare costs and disruptions. We’re focused on delivering the highest quality care efficiently, but we also grapple with labor shortages and healthcare inflation. We’re strategically investing in new technology, expanding our hospitals, initiating community health programs, fostering academic partnerships and supporting pipeline programs to enhance care standards. We’re actively collaborating with [Louisiana state officials] to address Medicaid reimbursement and supplemental payments."

Greg Hoffman, Providence Health and Services: "Our strategies include three D’s: Diversifying revenue streams to support our patient care mission, digitizing tasks and services to improve the experience for patients and clinicians, and deconstructing the traditional healthcare platform to become more nimble and better able to deliver care when and where patients want it. We view 2024 as a year of transformation and collaboration in which innovative partnerships will help to drive increased access to care and improved quality and affordability."

Steve Filton, Universal Health Services: "Our biggest financial priority in 2024 is our intentional effort to be competitively, fairly and adequately reimbursed by payers. [We ensure] that payers are administering claims according to [Centers for Medicare and Medicaid Services] guidelines and that they are adhering to relevant contractual terms and by aggressively appealing claims that have been inappropriately denied."

Dennis Laraway, Cleveland Clinic: "Labor costs now consume an additional 4.5% of total revenue as compared with pre-pandemic levels. That 4.5% used to approximate our yearly operating margins, which has now shifted into our workforce. Inflation across pharmaceuticals and supply chains continue to pressure operating margins as well. Cleveland Clinic has launched an overall sustainability program aimed at creating operating leverage and [scaling] efficiencies, supported by our continuous improvement framework, to deliver truly sustainable performance."