Healthcare

Risk tolerance is an interesting thing. Those who make the biggest bets often are actually control freaks—maybe because they know that, by having a strong grasp on the factors that influence the deal, they greatly increase the likelihood that they will come out ahead.

Think you can’t afford to invest in a cost-accounting system? The truth is, you can’t afford not to. As Medicare and other payers increasingly tie payments to value, understanding and reducing your cost structure will become an even more urgent priority.

The HORNE Healthcare team has been blogging recently about the necessary business model changes we think are inevitable to healthcare transformation. We’ve focused on the macro level, urging healthcare organizations to take action. While I believe our advice is sound for large systems, I am additionally concerned about the pressures physicians are feeling in their practices, particularly in small practices. In this blog, I’d like to introduce three issues I think will be important to physicians going forward. I will write in greater depth on each topic in the coming weeks. 

As I help healthcare organizations create effective cost accounting systems, the number one complaint I hear is: “I don’t think this report is accurate” or its second cousin “This just doesn’t look right.” My own father gives me grief because he doesn’t trust accounting systems.

At a recent national conference, I heard top executives from some of the largest healthcare systems in the country discuss their business models and their healthcare delivery transformation during the past several years. We can count on the Geisingers and the Mayos, as well as other large systems, to lead the way, but I was struck by the extent of their progress towards offering value and outcomes to patients rather than the traditional models present today in many systems. They are doing, quite successfully, what many smaller systems are only beginning to debate. They are proving that new models can deliver better patient care and still be profitable.

I was talking to a CEO of a healthcare organization recently, and I asked him what plans he had made for incorporating cost accounting into his financial processes. He admitted, a little reluctantly, that he wasn’t making plans at all. “How can I afford to go into that kind of detail?” he asked.

Bundled payments. Volume-to-value. Cost accounting. Process improvement. Patient engagement. Population health. Organizational leadership.