2024 Study of CFO Pain Points with HFMA

Intro:

A Ratio Marketing Podcast.

Todd Nelson:

If I’m coming with a product or service that I want you to buy as a CFO, you need to understand the pain points. So how do you match up what you’re doing, whether you’re insourcing or outsourcing or a product or a service, to the pain points that that CFO is feeling?

John Farkas:

Welcome everybody to today’s episode. I’m your host, John Farkas, and today we are unpacking some what I think are critical findings from HFMA’s 2024 Study of CFO Pain Points. And here’s what I know. I mean, right now health systems CFOs are grappling with all kinds of things, from rising pressures that are driven by escalating labor costs to complex pay reimbursement issues, unpredictable supply chains, all kinds of investments in AI and heightened cybersecurity requirements.

All of those are adding new layers of financial strain and operational risk. And this study that we’re going to be looking at really gets into some unique insights into what’s keeping healthcare CFOs up at night right now and why addressing these concerns in different ways and forms are really important to anyone in the health tech space. So joining us are two incredible guests who live and breathe healthcare finance.

Todd Nelson is the director of partner relationships and chief partnership executive at HFMA, and Trish Rivard, who is the head of Eliciting Insights, has partnered with HFMA to come up with this study. Trish is a seasoned researcher with all kinds of understanding in and around today’s healthcare finance landscape. And so together, we’re going to explore the pain points and pressures of CFOs and what they’re facing right now in all those areas that we just mentioned and more.

This is going to be a rich discussion packed with a lot of insights. So stay tuned here. Trish and Todd, welcome to our podcast.

Todd Nelson:

Great to be here.

Trish Rivard:

Thank you, John.

John Farkas:

So Trish, why don’t you just start off by giving us a little bit of introduction into this study and why you chose to focus right now on CFOs?

Trish Rivard:

Well, thanks, John. So in early 2024, we conducted several qualitative interviews of health system CFOs, and then we followed up with a survey. So it was a 50 plus question survey to HFMA CFOs, and we have a total of 135 respondents across 132 unique health systems. So really rich, robust study, especially with pure executive level respondents. The reason we chose the CFO is the CFO is the economic buyer for the health system.

So a lot of times we think about the CFO for rev cycle, we think about the CFO for finance, but really the CFO, whether it’s a major investment in IT, whether it’s a new clinical solution, the CFO is at the table either in the beginning of the conversation, at some point in the middle of the conversation, the end of the conversation. The CFO is always looking at new technology, new outsourcing solutions through the lens of, what’s the ROI? Is this going to improve our margin?

And right now in the post-pandemic time that we’re in, the margin pressure for health systems is worse than it’s been. So health systems have typically gone by on very low operating margins. And right now given inflation, given the increased cost in labor, specifically nursing, which we’ll talk about later in this podcast, and then we have pay reimbursement, and you see rising inflation.

And it’s not like health plans come to the health system and say, “We’re seeing inflation go up 6, 7, 8, 9%. Why don’t we give you a little more money to help you out?” Health plans don’t do that. So these health systems are struggling with this inflationary pressure, but they’re not seeing increase in reimbursement. In fact, they’re actually seen the opposite. They’re seeing that health plans are denying more, requiring more prior authorizations, and so it’s that much more challenging for health systems and specifically CFOs to navigate this.

So we thought this would be a really interesting time to just get a sense for what the CFO is seeing, what’s keeping them up at night, and really what’s that lens that they see the world in so that healthcare technology vendors can have a better conversation when they really understand who this financial buyer is that they’re trying to sell to.

John Farkas:

So Todd, I know you come to this conversation honestly. Give us a little bit of your backdrop and how you’re seeing what your perspective is on the current state of affairs in health systems.

Todd Nelson:

Sure. My background is I was a hospital CFO. So prior to coming to HFMA…

John Farkas:

You’re that guy.

Todd Nelson:

Yeah. Some would say I’m a reformed hospital CFO. I don’t know if I’ve recovered exactly. But the reality is working as a CFO in a health system or any business is you have a role to play. And you are in charge of thinking about from an executive team the financial management of your organization. So there’s short-term margin pressures and then there’s ensuring from a fiduciary responsibility that your organization is there for the long-term.

So it’s not just about short-term revenue and expense, it’s about long-term. It’s about thinking for projects, thinking about how you’re going to meet the needs of the community, no matter what type of business that you’re in. But in healthcare as a nonprofit to what Trish mentioned, whether you’re a nonprofit or a for-profit, you’re thinking about how am I going to be there to deliver the care?

So you’re thinking about also supporting the clinicians and operations and IT folks within the system that you’re working in and you’re doing that on an executive strategic level, working with the other members of the executive team and working with the board to try to look at that fiduciary responsibility. When I think about the health system executive in the CFO perspective, it’s important as a key decision-maker for a business partner, a vendor if you will, to understand the perspective of the CFO.

Because they’re going to be working with them on developing solutions, developing information to be able to present to them, and understanding the pressures, not just the margin pressure from a revenue perspective, but from a supply and expense perspective, from a labor perspective. Many of the things this survey discussed and that we will discuss, it’s important if I’m coming with a product or service that I want you to buy as a CFO, you need to understand the pain points.

So how do you match up what you are doing, whether you’re insourcing or outsourcing or a product or a service, with the pain points that that CFO is feeling every day? If you can relieve a pain point, if you can give me more time in my day, then you’re going to have a much easier road to getting that CFO to not only give you time to listen, but also to share what some of their concerns are and how you can help each other. And I think that’s the key factor when I think about a CFO.

John Farkas:

Yeah, Todd, it’s a very consistent theme when I talk to C-level executives and health systems. The desire to be known and understood, the desire for people who are coming to them and trying to get their attention to have done the work needed to understand what the actual scenarios are is so important and very uncommon, unfortunately, it seems. Because anytime you’re a solution provider, your focus tends to be on your solution.

And you have to understand the adjacencies and the comorbidities, if you will, that a hospital leader is facing when trying to decide. There’s so many opportunities for improving, optimizing, increasing effectiveness. And if you could do them all, that would be awesome, but you can’t. And so I think that doing the work to understand what these factors are is really important so that you can put that in your top line, so you can work that farther into how you’re addressing what you’re bringing in this case. Thanks for that.

Todd Nelson:

Let me hop in there. It’s developing the relationship. I mean, if I think about many financial institution relationships, banking relationships, it really is a relationship that you develop over time. It’s not transactional. Hopefully, eventually there is a transaction there, but developing that relationship, understanding the pain points. So that when something maybe doesn’t go as planned, you’ve got the trust that’s there to be able to say, “Well, you know, we also have this thing,” or you can pivot together and work on it together to solution.

And so I think to your point about relationship adjacent, we went through a pandemic. I don’t know if you heard about that. It was a thing, I guess. And evidently, that caused a lot of different pain points and pressures from folks. And those that worked together and trusted and developed that more long-term relationship I think are seeing the fruits of those labors.

John Farkas:

Yeah, that’s definitely a good underscore. And speaking of fruit of the pandemic, we should talk a little bit more about labor costs. If you’ve been anywhere near the space, you know that health systems are facing incredible pressure around the cost of labor and the availability of labor, which is we have a supply and demand curve there, and it is affecting everything, I mean, in many, many ways. I know that that’s an area that you focused on in the study, Trish. I’m interested to hear how… Give us some perspective on the nature of what we’re seeing there.

Trish Rivard:

Yeah, absolutely. So of the respondents, 96% of health CFOs indicated labor is a top challenge. And within labor, so we’ve drilled down into different categories, 99% of health systems indicated that nursing was the biggest pain point when it comes to labor. And this is consistent. We saw the shift to contract labor during the pandemic. It’s continued in the post-pandemic time. Health systems are really struggling with nursing. We’ve seen a definite improvement in terms of overall nursing and nursing costs.

But even in the beginning of this year, it was still the top pain point. So how are health systems CFOs solving it? So definitely continuing to outsource, and at the same time, they’re increasing wages for nurses. We also heard through the qualitative work and other CFO interviews that we’ve done, health systems are doing everything and anything they can to be creative around nursing. So they’re actually creating internal outsourcing, contracting, developing labor pools for nursing.

They’re really working hard to retain nurses, which is critical. We’ve also seen other areas of challenges with labor is in the revenue cycle and IT. One important thing to note is this study was conducted prior to the Change Healthcare breach. So all of the data had been gathered prior. So there’s no reflection of the increased costs associated with that Change Healthcare breach and the significant impact that had on the revenue cycle.

So from a revenue cycle standpoint, health system CFOs, they’ve been increasing wages, but looking to technology even more so than outsourcing. Whereas nursing, there’s a view that contract labor outsourcing is still necessary. Revenue cycle, the shift seems to be like what new technologies can we bring? And then for IT staffing shortages, increased wages, technology, and also an increase in outsourcing for IT are some of the areas of focus.

John Farkas:

Yeah, I can say from my perspective, and Todd, I’m curious to hear on yours, I know that revenue cycle from a technology and innovation perspective was a pretty sleepy space for a long time. And the new things or the innovative things were very incremental. And recently it seems like it’s really awakened.

There’s a lot of different technologies coming that are AI empowered, allowing for enhanced efficiencies that seem to really be making a difference and seem to have caught the attention of a lot of health systems that are working very diligently to overcome some of these challenges. That’s been very apparent to me in the last… Well, since the pandemic. Todd, I’m curious your perspective on that.

Todd Nelson:

Yeah. If you think about revenue cycle has a lot of different areas that it touches. You’ve got your frontline revenue cycle people that are right there from a labor perspective when you walk into a physician’s office or a health system. Those frontline people are generally new to the workforce. You compete with those people, which are gathering all of your data, by the way, and getting it right so that your revenue cycle can actually work, you’re competing with large retail organizations that pay about the same wage.

And so your competition for those folks are… Let’s say I’m working in a department store doing basically the same thing as I am in a health system. And when you come to a health system, most of the time you’re not super happy, excited, feeling good, having a great day and going home with something, except maybe a prescription. You leave a department store, you’re coming home with something that you wanted, that you bought, you’re excited about, new clothes. So we’re competing with those people in the front line from a revenue cycle perspective.

To your point of automation and the explosion in the revenue cycle, which is more middle or back end of revenue cycle, that’s been a good thing, but it’s been slow to adopt, because there is still concerns about privacy and security and where those are. And if you think about ways that we’ve been able to pay our electric bill for decades or many other things that have been slow to be adopted in the health systems because of that security thing, it is moving in that direction, which is a good thing and I think that will help.

But we go to IT shortages, everybody’s competing for IT talent. That has been a longer term, I would say, concern of folks, but you’ve got major consultancies built around IT talent now. That’s not bad, but it’s causing a tremendous amount of competition to retain the staff that you have that in many cases, by the nature of the world of IT, you don’t have to be physically located in the building that you’re serving to do it. So you may want to live in Des Moines, Iowa, but work in Silicon Valley and get Silicon Valley wages and a cost of living in Des Moines, Iowa.

And that creates a competition when you’re a health system for IT talent trying to serve the needs that you have right there. We used to think it was people moving to the other area that was causing the raise in wages, but it’s actually people staying where they are and working for somewhere else that’s causing that difficulty and the shortage in the IT area in health systems. And then last but not least, if I didn’t talk about clinical folks, our nursing staff, our workforce, and even our physician partners, people would wonder, does he really know what happens in hospitals anymore?

And there’s a lot of different strategies for recruitment and retention, from a sign-on bonus to a loan forgiveness, to flexible work hours, to compensation arrangements that are more than just raising the base wage, which we’ve seen a lot of. And the long-term impact and effect of that to the point of one of the comments that was made earlier, there’s nobody saying, “Wow! Yeah, those costs for hospitals are going up. We should probably pay them more. That’s what we should do. Where can we get more money to pay them?”

Well, that’s not following through. I mean, that’s not what we’re seeing. And so really these increased labor costs are creating that pressure from an expense side of things that hospitals are having to be creative, whether that is creating float pools for all these different areas. In some cases, going together with other systems or organizations in their area to create an IT float pool or a revenue cycle float pool or a nursing float pool. It is just they’re trying to get creative and in essence cutting out the middleman. And I think that’s good, but there’s certainly a lot of pressure to perform.

John Farkas:

So one of the things that I’m curious about, as you talked before about the role of the CFO as far as future casting and being prepared, what I know is that as we look at the labor demands on health systems and we look at the population curve that is all getting ready to crash onto our shores in the next several years, how are CFOs thinking about what is getting ready to happen as far as that crunch?

Because I know labor costs are not… That’s not a curve that’s just going to magically disappear when we put some tech toward it. It’s going to be a major issue for some time to come because the supply-demand curve is not going to be in patient’s favors or hospital’s favors. How are you seeing that?

Todd Nelson:

From a demographics perspective, if you think about the population, we’re moving into… Not only our population is getting older, but our workers are aging out of the workforce. And so a lot of hospitals…

John Farkas:

And we’re not replacing them at the rate we’re losing them.

Todd Nelson:

That’s right. That’s exactly right. What folks are doing is they’re creating partnerships with community organizations, universities, trying to reach into high schools, grade schools to say, “Hey, yeah, you heard all this terrible stuff about the pandemic, but being a nurse or being a doctor is still a pretty cool thing.” Going back to making the profession something that people want to do versus what for a period of time was somewhat of a negative connotation related to how people were being treated.

I’m here to take care of you. Please don’t be angry with me. So turning the page a little bit, talking younger grade school, high school about the profession, and there’s been campaigns before about how it’s great to be a teacher as an example. So I think there’s a lot more campaigns about starting earlier. And then unique community partnerships to develop formal training programs for clinicians, as well as IT professionals.

And then last but not least, once you get them in, very formal preceptor programs, trying to open up nursing slots, trying to open up other clinical slots where people can get trained before they’re thrown into a clinical situation. So there’s a lot of simulation labs and other ways that we can train people before they’re in front of a patient. And we’re seeing a lot more investment now for the long-term in those relationships because we know that there is a shortage and it’s going to continue and could potentially get worse if we don’t start investing now.

John Farkas:

So safe to say, as we’ve already mentioned, this is way up in the face of pretty much everybody. I think you said 99%, Trish, of folks in the survey would hold labor costs as a primary issue. Let’s turn our attention to the next one that we’ve already mentioned because we all know it’s there, and that’s the challenges as pertaining to reimbursement. Trish, what did the study uncovered there?

Trish Rivard:

So for 84%, so payer reimbursement was the second top driver of market compression with 84% of CFOs indicating that their reimbursement was a top challenge. Of the respondents, so 90% indicated that either technical or clinical denials or both was the top challenge in revenue cycle. 82% of CFOs indicated that denials are higher than they were pre-pandemic time. What we see a lot in the revenue cycle is these technical denials that have exploded from Medicare Advantage Plans.

So in general, denials are going up. In fact, I just heard an article about a week ago saying that I believe it’s Huntsville Hospital Health is no longer accepting UnitedHealthcare plans because the denial rate for UnitedHealthcare was 75% higher than other health plans. And so Huntsville said, “Enough. Somebody needs to take a stand here.” It’s mind-boggling to me that health plans are able to get away with this consistent denial even with every state has an insurance commission and somehow the health plans are still able to get away with this.

But we’re seeing specifically Medicare Advantage, and I think that’s going to be… We’re starting to see a lot of news come out about Medicare Advantage, where CMS is realizing that maybe these Medicare Advantage Plans have been overly risk-adjusting on certain patients so they can increase their reimbursement. What these Medicare Advantage Plans have done is they systematically deny claims from the health system so they can get the medical record. So they get the medical record and then they can take it and they can risk adjust.

But this process is creating so much burden on the health system to have to receive the denial, appeal the denial, submit the medical record, and then get paid that from a cost standpoint, it’s just out of control. And so what we’re starting to see, and we saw this in the survey, is 61% of CFO respondents, this is earlier this year, indicated that they were either stopping the acceptance of one or more Medicare Advantage Plan or considering stopping one or more Medicare Advantage Plan.

So I think what we’re starting to see, and I’d love your perspective on this, Todd, is that health systems are looking at this going, okay, I have this Medicare Advantage Plan. I have this one, two, three plans for Medicare Advantage, because there’s so many out there, but these couple of plans that are denying everything or adding all these additional ownership requirements with prior optimization and really hard to work with, we’re not making any money. In fact, we’re losing money and we have a low patient volume.

We need to be done with them. We need to stop accepting them. And yeah, it’s going to create some patient friction by doing this, but over time patients will realize that these are not the best plans to work with and they’ll find a different Medicare Advantage Plan. But we need to stop accepting the ones that are just creating all this burden and we’re losing money by working with them. So I think we’re really going to start to see a lot in the news about health systems saying enough is enough here with these Medicare Advantage Plans.

John Farkas:

Yeah, Todd, I’m curious your perspective on that because I know this is getting into it here.

Todd Nelson:

Yeah. I mean, if you think about any agreement or contract that you create, you accept a certain rate for that agreement and you model it out. And both sides come together and in theory you say, “Okay, well, I think this is a fair agreement. So you’re going to pay me 90 cents, 90%. 90% seems good. I can still make some margin on that. You can make some margin on that. Everybody’s going to be happy at 90%.”

But if at the 90% and you’re a hospital all of a sudden becomes 0% because I’m not paying you on everything you send to me and I have to fight for that, then eventually it comes back. It’s costing me more. Maybe I overturn 99% of them, but the expense to get that 99% of 90% is 15% more. Then not only does my brain hurt from the math I just did in that example, but I’m not getting paid what I thought I was going to get paid. So it’s no longer a fair deal.

And to me, that’s where we are seeing hospitals and health systems say the reason I agreed to 90% is because that’s what I thought net end of day I was going to get. But if now it’s really 70% or even 80%, then I should have agreed to 98% because I knew it was only going to be this much. And I think that’s where there’s so much staff time involved in fighting these denials, the paperwork involved, the consternation between the patient that gets a denial and wonders, “Well, why did it get denied? I thought I had coverage. You told me I had coverage and now I don’t have coverage.”

And so then it becomes a battle back and forth. And so the decision to walk away is not purely a financial decision, but it’s also a patient impact decision from the fact that they’re also receiving a denial for care that was appropriate, but was technically denied, which causes confusion. So then you have to say to yourself, okay, yes, it’s not the deal that I thought, but it’s now confusing my patients.

So now if I don’t accept this plan anymore, if we break our agreement, if we don’t renew it, our patients are going to have to go somewhere else. And you can only imagine the dynamic between the patient, the physician or clinicians, the hospital, the community, the board members, and the payer. And so in some cases, we’ve seen people continuously trying to work on a better way, a better methodology to do some of these things through automation.

HFM, our magazine, we did an article, a feature story called The Battle of the Bots, where you’ve got these automated denials over here from the insurance company and then the automated fighting denials from the health system. There’s no real people involved. It’s just literally the bots going back and forth. And again, it becomes a really big margin pressure.

When you’re trying to think about agreements that you come to in good faith with any organization, and then there’s a systematic process of saying, “No, we don’t want to pay you. Oh, wait, okay, I guess we should pay you,” and 99% of the time they’re getting overturned, it feels very disingenuous, and it’s not good for the patient at all because they’re stuck in the middle.

John Farkas:

Especially when the payers post their profits. That’s where it’s hard to watch, for sure. Well, let’s turn our attention to supply chain because that’s another thing that the pandemic brought front and center that has found its way to lingering in multiple different ways. What have you seen in that context, Trish?

Trish Rivard:

Yeah, so of the CFO respondents, supply chain came in as the number three driver of margin pressure with 47% of CFOs indicating that supply chain was a top challenge. What’s interesting about supply chain is while less than half of the respondents indicated it was a top challenge from a margin perspective, 86% of CFOs expect that the increase in pharmacy costs and 73% expect significantly higher cost pressure in medical devices. What I’d say about supply chain is right now it’s being overshadowed by the cost and the payer reimbursement.

John Farkas:

But they’re real numbers.

Trish Rivard:

But the expectation is that pharmaceutical and medical device costs are going to increase significantly in the next one to two years. So Todd, we’d love your thoughts on what you’re hearing and what’s driving these increased pharmaceutical costs and med devices. Is it really just new innovation that we’re seeing so that we’re seeing better outcomes with patients as a result of this increased cost?

Todd Nelson:

I mean, research development innovation is great. I mean, we all want the magic thing that’s going to fix us, whether that’s the super-duper hip or magical drug or treatment that’s going to be there. But the reality is for CFOs or health system executives, and as we think about wanting to provide the best outcomes for our patients, we also have to think about what the clinicians are using, what they’re trained on, what they’re comfortable with.

And so a lot of organizations look at trying to standardize pricing of pharmaceuticals through a formulary, standardizing use of medical devices. But you have to remember, we’re also dealing with a labor shortage. So we need every clinician we can get. We can go to them and say, “Well, we really think you should use this lower cost thing that we just negotiated a great price on,” and they’re going to look at you and like, “No, I want to go to the place that allows me to use what I want to use.”

And so it’s a game I don’t want to say per se of cat and mouse, but to some extent, it’s hard to create unless you are all in the same boat rowing together, incentivized together, everybody moving in the same direction. And yes, there are increased cost pressures. I mean, inflation was a deal, has been a deal for folks, but it seems very easy for a supplier to say, “Well, I had a tremendous amount of inflation increase, so I’ve got to put 9% ahead. That’s the new cost increase.”

And even with our own business partners that we work with, sometimes we have to say, “Well, could you actually articulate what in your business specifically was that inflation cost?” And I think that’s where CFOs are asking their business partners to get a little more granular with what exactly was the cost. Was it an ingredient? Because it’s very easy to say, “Well, it’s all the R&D costs of creating the new thingamajig,” but really what R&D costs.

I mean, I realize there’s opportunity and people are being opportunistic and we believe in those types of things. But that being said, being able to actually articulate what the true costs increase are and then work with our clinicians to say, “Is this thing worth a 20% premium,” whatever the thing is from a supply cost perspective. And again, that’s a careful balance.

You want the clinicians to be able to use the products that they’re familiar with, that they’re comfortable with. You don’t want a patient or a clinician to ever feel like something’s cheap. So it’s involving them in the value analysis, in the decision-making, and many times asking them, if they don’t believe it’s worth that premium, asking them to challenge those that are trying to sell that product or service and partnering with them.

But I think innovation is an awesome thing, and it does come at a price and a cost. But is the price worth $3 million a dose? I don’t know. I don’t know if that’s sustainable.

Trish Rivard:

The whole notion of standardization of devices, that came up a lot in the qualitative interviews. And from a CFO perspective, it’s like, okay, well, you currently have 10 devices, if we can streamline down to two or three. And then you have the physicians saying, “Yeah, but I was trained on this particular device. I did my residency and I was trained, and I’ve been using that device for 10 years. And I have to think about my malpractice insurance, and I have to think about just my comfort level with a different device.”

And those are things that don’t necessarily factor into the economic decision, but those are… Physician preference is a really important consideration. And Todd, I love how you connected that back to the labor shortage on the clinician side because that’s something that I hadn’t really thought about as well is you’re also competing. We talked about nursing, but physicians, while health systems don’t pay physicians directly, there’s a really important relationship between the physicians and making sure physicians are happy at the health system and the partnership.

John Farkas:

Let’s move to our last chapter here, because I think it was a surprise to me after what we’ve encountered in the last 18 months or so to see cybersecurity below supply chain, for instance, as some of the pressures go, but it’s the next step on our docket. So Trish, what did we uncover about the relative cost of AI and cybersecurity, two frontiers here that are showing up in a lot of planning and deployments? But what are we seeing there as far as CFO’s view on those?

Trish Rivard:

So from an AI standpoint, AI is fascinating. So there are a couple questions that Rita Walker from the HFMA suggested we include in the study, and I’m really glad we did. And actually Todd had suggested we include the, do CFOs really believe that AI is going to lower the cost, and the answer is no. About a third say it’s going to ultimately decrease costs, and a third say it’s going to increase costs, and a third say it’s going to stay flat. So from an AI standpoint, because there’s just this expectation that AI is here.

Health systems implemented EPIC years ago. They thought implementing a better EHR was going to lead to decreased costs, and then what they saw was, nah, not so much. It actually increased your costs because you have to have more technology support. And then from a clinical standpoint, you need more resources. And so they’re really, I think, being very practical about AI in that best case scenario, it’s going to be cost neutral. It would be great if it save costs.

And you look at the revenue cycle and what Todd had just talked about, where you have The Battle of the Bots, the health plans get more sophisticated. And so then from a revenue cycle standpoint, you need to be more sophisticated and keep up. Now we have bots fighting bots. Has society really benefited from this? Not so much. But AI, I think health systems CFOs are being very practical about it. Some of the other findings, and this was an area Rita had suggested, was looking at the governance structure. Health systems are not prepared right now for AI.

So only 8% of respondents have either a mature or near mature governance structure in place for AI. That’s significant. And this is something that really would encourage vendors to think about as you come with new AI-based solutions, there’s an opportunity to educate the health systems about what are some of those things that they should be thinking about and asking and providing sample frameworks for AI and AI governance, thinking about being a good partner as you bring an AI-based solution, and then thinking about cybersecurity.

So again, this study was conducted prior to the Change Healthcare breach. And at that point, 50% of respondents said that they have seen a significant increase in cybersecurity-related spend. So I think the thing about cybersecurity is you have to do it. Even if you don’t have it budgeted, you have to find the money for cybersecurity and to make sure that your health system, that your data infrastructure is tight. And then here we have health systems spending a significant increase in money, and then the Change Healthcare breach happens.

And it’s not on the health system side, it’s actually a vendor side, a large vendor, a large vendor owned by UnitedHealthcare has the data breach and health systems are struggling. I’m sure if we asked the increase in cybersecurity spend, if we asked it a month or two later, it would’ve been a lot more than 50% saying they’ve seen a significant increase in cybersecurity spend.

John Farkas:

I was curious your perspective on that, Todd, because I know that post Change, certainly the heat is on a number of fronts. And I think that everything I hear from the folks that I stay close to that are healthcare cybersecurity vendors, they’re busy as can be right now.

Todd Nelson:

Yeah, I don’t think there’s any doubt. I mean, I think a phrase that we hear a lot in regard to cybersecurity is it’s not a question of if, it’s a matter of when it’s going to happen to you. And so whether it’s a vendor breach or a health system breach or whatever, we all need to be prepared for it. I think maybe just a little bit naively seven, eight years ago, we thought, well, nobody would attack healthcare because that would hurt patients. So we should be okay. We don’t have to overspend because we only have so much money anyway.

We don’t have to overspend in cybersecurity. We don’t have to invest in defense. Let’s just buy insurance, and that’ll be okay because they’re probably not going to come after healthcare, right? Yeah, yeah, yeah, yeah, we’re okay with that. Well, the reality is these folks don’t care. They’re coming after wherever the money is. And the reality is they’re going to do a breach, they’re going to continue to test and ransomware and all the horrible, terrible things that we’ve seen in the headlines that have happened to…

I mean, they’re criminals. They’re out to make money, and so they’re going to go where people are vulnerable, where they can use leverage, and data is leverage to do that. And so health systems are investing a tremendous amount in cybersecurity, in governance, in understanding systems, in testing and getting third-party testing, and then investing in what are their vendor partners doing to protect them.

So how are we protecting information and data and equipment and all the things that you wouldn’t think you would need to worry about related to the new connected world that we’re in that are part of the healthcare system. And when I think about AI, as a general rule, hospitals and health systems are just trying to understand, I mean, everybody has a “AI solution” now. Is it really AI or is it automation? And do I need AI? Maybe I just need things to be automated, which is very different than AI.

There’s a whole continuum from simply automating a task up to artificial intelligence and what is the pathway to do that and what are the use cases, whether those are revenue cycle use cases, whether that is lowering the burden on clinicians by automating certain tasks, whether that is full artificial intelligence or not. I think people are really treading lightly, and especially in the healthcare finance world. I mean, our basic training is to be conservative, to be risk-adverse in general.

So whether it’s AI, although it’s cool and shiny, or cybersecurity that’s going to prevent risk, we’re really thinking about… I mean, all things being considered, cybersecurity seems like a bigger risk that we need to make sure we’re investing in versus artificial intelligence that we really don’t understand if there’s a return on investment, if it’s going to help us and is risky and new and comes fraught with, in some cases, all these other things like cybersecurity. So now we got to figure that part out.

So this cool new thing that everybody seems to have, whether they do or not, called AI now is increasing our cybersecurity risk. So again, I like things that are shiny and new. But as an accountant, as a conservative fiscal person, my role in my health system is to protect the future. And so I’m investing in anything or being involved in anything that’s going to make us more secure. And in cybersecurity, we’ve seen just a tremendous amount of investment in that area.

Trish Rivard:

So Todd, when vendors come and say we have an AI-based solution, from a health system CFO perspective, are they excited? Are vendors, are they better served to lean into AI, even if it’s more automation? Do you think it’s better or it’s worse?

Todd Nelson:

I mean, I think the CFO is immediately skeptical. And just because it’s AI, we don’t know that it’s better, which is sort of like any new device or any new drug. Okay, so it’s new, it probably costs more. Does that mean it’s better? Is it more effective? What does it do for the system, the people in the system, reduction in cost, improvement in revenue? What are the hard facts around that?

John Farkas:

Compliance.

Todd Nelson:

So I don’t know that saying AI is immediately, oh my gosh, AI, that’s going to be the savior. Now then again, in a room full of CFOs, there’s some questions people are asking like, hey, are you guys using AI? Oh yeah, we’re using AI. What’s your day’s cash on hand? Oh, mine’s pretty good. What’s yours? I mean, there are certain phrases that we look at and we talk about because they’re shiny and interesting and we don’t want to be left behind, and yet we want to be conservative and risk-adverse because that’s the role.

So I think sometimes our business partners think that they have to have AI. And so by saying something’s AI, they’re going to get in the door. And I would argue that there’s so much skepticism about what it can actually deliver. If you don’t have it, you don’t necessarily have to go create it to be able to deliver automation at whatever stage that’s going to help a health system.

John Farkas:

AI is about solving problems ideally, and it’s about how well you’re able to solve the problems and how you get the problem solved is… At the end of the day, it doesn’t matter if you’re solving the problem well. How do you solve the problem? What does it all end up saving? How reliable is it? And is it going to protect us from litigation and compliance concerns and regulatory failures?

Is it going to decrease our exposure in those regards? I mean, that’s the end of the day what we’re looking at. Todd, I’m curious, as you think back at your time as a CFO, is there a vendor of a truly innovative solution that came across your desk at some point that did a really good job of addressing your concerns? And if so, what were some of the things that they did that made it easy to say yes?

And I know I’m putting you on the spot with this one, but I’m just curious if you can think back and think back to a decision that a vendor actually made easy by how they came alongside you and helped you understand what they were going to truly do.

Todd Nelson:

I think the way I think about… There’s a couple of vendor partners that I can think about that it was about understanding what my needs are, what kept me up at night, what the pain points were, what my concerns were, so being able to articulate them, ask more about what were some of the problems that we were facing and concerns that we had, not me personally, but the system had and how could a solution that they have solve one of those problems. And so the solution wasn’t always a revenue increase or a cost reduction.

Sometimes it was a non-financial benefit for the system, so if that was making our clinicians happier or it was a better patient outcome, if it was a frictionless environment. But it was thinking about everything from what were our needs and how could their solution meet one of those needs to then fully articulating not just the financial part of it, but all the other non-financial benefits, good and bad in some cases, the impacts, what was going to happen if you did this solution?

So they really helped me think about the finance part of it, but also the operational part of it. So maybe I just “saved” a bunch of money from a revenue and expense perspective. But if I switched to the new thing and all of a sudden, all of my clinical staff in the OR were unhappy, and so they just generally started leaving, I had attrition, they started doing, if I’m a physician, doing the cases somewhere else because they didn’t like the thing I switched to or it took them longer and in general made them more efficient, that was a pretty poor decision on my part.

When a vendor partner comes and really talks through and spends the time to walk through the implementation part of it, the operational impacts part of it, has a good ROI model related to it, yeah, I like the ROI stuff, but I like all the other non-financial impacts as well. If I think you’re a nail and I’m selling hammers, guess what I’m going to sell you? So I think it’s understanding the needs that I have first and then coming up with solutions that maybe aren’t what I need right now, but that’s okay.

So you know what? We stay in touch. We develop that relationship over time. Because more often than not, when you’re in the healthcare space, that need is going to come up for your organization. And if you’re there and you’ve developed the relationship, I think that’s really the key to being there and listening. So that when you’re in your R&D meeting and someone says, “We’re thinking about some new product development. Well, does anybody know what the CFO thinks? What are the pain points hospitals are doing,” you actually know what those are.

And then when you’re developing solutions, it’s based on customer or even industry feedback, not just what you think is the best. And so I think to me, that’s what was always helpful is to watch it come back around and listening, because those are the people also that I invested my time in when they wanted to come and have a meeting with the CFO. It’s like, oh, I remember John. He was great. He always asked about…

I just saw this in the news, and it was more than just this is the thing that I have that I want you to buy. It was about the context of the industry and how it was impacting our system. And to me, that was always the key of folks that we kept inviting back to have that conversation.

John Farkas:

Thanks, Todd. That’s great insight and important thing to underscore. Trish, I’m curious on your end, as you put all this together, was there anything that stood out to you, any surprises, anything that you felt like was just the real salient point to drive home here in the context of what you put together?

Trish Rivard:

Yeah, there were definitely a couple of things. I think the frustration around Medicare Advantage, that really stood out. Health systems, they’re at that breaking point. Enough is enough here. We can’t have this ridiculous denial rate, and then have 99% overturn rate on these denials, it’s just too much. Considering or planning to drop Medicare Advantage Plans, that I thought was really interesting.

And when we conducted the study, that was really predicted. We have seen health systems start to drop Medicare Advantage. We’ve seen it in the news, if you follow the headlines on Becker’s or other healthcare publications. And I think the other thing that was just so interesting is from an AI standpoint, health systems are just… Like all of us, they’re struggling with how to think about it.

But going into this, I would’ve expected more than 8% to say, yes, we’re ready for it. I mean, we have a lot of large health systems out there. I would’ve expected to see closer to 40 or 50% say, yeah, we have a governance in place and we are prepared for it. But that 8% number really surprised me.

John Farkas:

Yeah, I’m anticipating that’s going to be a fast moving number in the next 12 months for sure as we get to… Well, as the technology continues to take substantial leaps forward. And as entrusted with more, it’s going to become increasingly evident that clear governance needs to be in place. And I’m guessing that’s going to be a pretty strong theme we’re going to see over the next six to eight months. Trish, tell us about if people are wanting to get a hold of this study that you’ve put together, what’s the way they can get their eyes on this?

Trish Rivard:

So the study is available both on the elicitinginsights.com website, as well as hfma.org, and the report is available for $2,500. If you’re interested, feel free to reach out.

John Farkas:

Just lots of specific insight as well. If you are anywhere near the space and CFOs are on your target that you’re interested in making sure you understand and get… I mean, we’ve just skimmed the surface of what this covers. There’s a lot of very good specific insight and information in the study. So check out elicitinginsights.com or hfma.org. There’s two good paths to get that. And really want to encourage you, if you are in this space, it’s very worth your time.

Trish Rivard:

This report is a 40-page CFO persona. So as a market research company, we get asked to do buyer personas all the time. And typically, we’ll interview five buyers, understand their pain points. Within the study, there’s an actual persona at the end for marketers, sales executives to have it all consolidated in one page. Typically, for a buyer persona to have a custom one developed, we would charge a lot more.

So really excited about this report and this study and the opportunity that it can create for vendors to be able to better understand their buyer and like Todd talked about, just have a better conversation. And then you start thinking about content creation and content that’s going to resonate with this economic buyer at the health system. And there’s so much in this report that can really help with thought leadership and better content creation.

So really, if you’re interested and if you want more information about the study, we have an overview where you can reach out, info@elicitinginsights.com. We could provide you more information about this study if you’re interested.

John Farkas:

That’s awesome. Thanks, Trish. Todd, any final thoughts here as we wrap up?

Todd Nelson:

Well, I mean, I think the question that you asked me before was think about a vendor partner that did a really nice job. And the reality is, is if you understand what my pain points are, and to Trish’s point of the 40-page report, when you come to ask for an appointment, you’ve already got a head start. Because frankly, you know what the elevator pitch is.

And it’s not about the thing that you have, it’s about, I understand that everybody knows that you’re facing high labor costs and you’re now trying to evaluate artificial intelligence and increased supply chain and payer, da-da-da-da, all the stuff that we’ve talked about today. I mean, tell me how those things are impacting you and your health system. I saw the study that HFMA did with da-da-da-da-da. To me, that is a great opportunity.

When you’re trying to get that appointment, have that discussion to understand that you believe you understand the environment, but you want to learn more. And as you could tell from this CFO persona, we like to talk about ourselves and the stuff that’s going on. So when you ask us questions, we think you want to know. So we’re going to talk to you and tell you what our pain points are, which helps to design a relationship, design a project or service, and see how you can help us solve a problem.

And I’ll tell you what, no matter what problem you help us solve, whether it’s the one that your project or service does, or it’s the fact that I’m going to be in X city in two months and I’m looking for a restaurant, that endears you to us and we are interested in that. It’s about that relationship. So appreciate the insights the report put together, and it’s great working with Trish and really appreciate the opportunity to be here today.

John Farkas:

Well, thank you and we appreciate it as well. And just to underscore here, I mean, for health tech innovators, anybody bringing a solution to the market, if you’re trying to get across to the CFO, and this is true of any other C-level persona that you’re trying to relate to, it’s not just about pitching a product. It’s about becoming somebody who they trust, who knows that they have an empathetic understanding of what’s going on, and someone that’s going to help them ultimately in the CFO role is going to help them toward achieving a sustainable financial health profile.

I mean, that’s a big part of the deal. And so if you’re working towards those ends and help them understand that you share that objective, that’s going to go a long way. Trish, Todd, thank you both for joining us here today. So thankful for the input and the insight, and looking forward to the next opportunity we have to chat.

Trish Rivard:

Awesome. Thanks, John.

Todd Nelson:

Thank you, John.

John Farkas:

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Intro:

A Ratio Marketing Podcast.

Todd Nelson:

If I’m coming with a product or service that I want you to buy as a CFO, you need to understand the pain points. So how do you match up what you’re doing, whether you’re insourcing or outsourcing or a product or a service, to the pain points that that CFO is feeling?

John Farkas:

Welcome everybody to today’s episode. I’m your host, John Farkas, and today we are unpacking some what I think are critical findings from HFMA’s 2024 Study of CFO Pain Points. And here’s what I know. I mean, right now health systems CFOs are grappling with all kinds of things, from rising pressures that are driven by escalating labor costs to complex pay reimbursement issues, unpredictable supply chains, all kinds of investments in AI and heightened cybersecurity requirements.

All of those are adding new layers of financial strain and operational risk. And this study that we’re going to be looking at really gets into some unique insights into what’s keeping healthcare CFOs up at night right now and why addressing these concerns in different ways and forms are really important to anyone in the health tech space. So joining us are two incredible guests who live and breathe healthcare finance.

Todd Nelson is the director of partner relationships and chief partnership executive at HFMA, and Trish Rivard, who is the head of Eliciting Insights, has partnered with HFMA to come up with this study. Trish is a seasoned researcher with all kinds of understanding in and around today’s healthcare finance landscape. And so together, we’re going to explore the pain points and pressures of CFOs and what they’re facing right now in all those areas that we just mentioned and more.

This is going to be a rich discussion packed with a lot of insights. So stay tuned here. Trish and Todd, welcome to our podcast.

Todd Nelson:

Great to be here.

Trish Rivard:

Thank you, John.

John Farkas:

So Trish, why don’t you just start off by giving us a little bit of introduction into this study and why you chose to focus right now on CFOs?

Trish Rivard:

Well, thanks, John. So in early 2024, we conducted several qualitative interviews of health system CFOs, and then we followed up with a survey. So it was a 50 plus question survey to HFMA CFOs, and we have a total of 135 respondents across 132 unique health systems. So really rich, robust study, especially with pure executive level respondents. The reason we chose the CFO is the CFO is the economic buyer for the health system.

So a lot of times we think about the CFO for rev cycle, we think about the CFO for finance, but really the CFO, whether it’s a major investment in IT, whether it’s a new clinical solution, the CFO is at the table either in the beginning of the conversation, at some point in the middle of the conversation, the end of the conversation. The CFO is always looking at new technology, new outsourcing solutions through the lens of, what’s the ROI? Is this going to improve our margin?

And right now in the post-pandemic time that we’re in, the margin pressure for health systems is worse than it’s been. So health systems have typically gone by on very low operating margins. And right now given inflation, given the increased cost in labor, specifically nursing, which we’ll talk about later in this podcast, and then we have pay reimbursement, and you see rising inflation.

And it’s not like health plans come to the health system and say, “We’re seeing inflation go up 6, 7, 8, 9%. Why don’t we give you a little more money to help you out?” Health plans don’t do that. So these health systems are struggling with this inflationary pressure, but they’re not seeing increase in reimbursement. In fact, they’re actually seen the opposite. They’re seeing that health plans are denying more, requiring more prior authorizations, and so it’s that much more challenging for health systems and specifically CFOs to navigate this.

So we thought this would be a really interesting time to just get a sense for what the CFO is seeing, what’s keeping them up at night, and really what’s that lens that they see the world in so that healthcare technology vendors can have a better conversation when they really understand who this financial buyer is that they’re trying to sell to.

John Farkas:

So Todd, I know you come to this conversation honestly. Give us a little bit of your backdrop and how you’re seeing what your perspective is on the current state of affairs in health systems.

Todd Nelson:

Sure. My background is I was a hospital CFO. So prior to coming to HFMA…

John Farkas:

You’re that guy.

Todd Nelson:

Yeah. Some would say I’m a reformed hospital CFO. I don’t know if I’ve recovered exactly. But the reality is working as a CFO in a health system or any business is you have a role to play. And you are in charge of thinking about from an executive team the financial management of your organization. So there’s short-term margin pressures and then there’s ensuring from a fiduciary responsibility that your organization is there for the long-term.

So it’s not just about short-term revenue and expense, it’s about long-term. It’s about thinking for projects, thinking about how you’re going to meet the needs of the community, no matter what type of business that you’re in. But in healthcare as a nonprofit to what Trish mentioned, whether you’re a nonprofit or a for-profit, you’re thinking about how am I going to be there to deliver the care?

So you’re thinking about also supporting the clinicians and operations and IT folks within the system that you’re working in and you’re doing that on an executive strategic level, working with the other members of the executive team and working with the board to try to look at that fiduciary responsibility. When I think about the health system executive in the CFO perspective, it’s important as a key decision-maker for a business partner, a vendor if you will, to understand the perspective of the CFO.

Because they’re going to be working with them on developing solutions, developing information to be able to present to them, and understanding the pressures, not just the margin pressure from a revenue perspective, but from a supply and expense perspective, from a labor perspective. Many of the things this survey discussed and that we will discuss, it’s important if I’m coming with a product or service that I want you to buy as a CFO, you need to understand the pain points.

So how do you match up what you are doing, whether you’re insourcing or outsourcing or a product or a service, with the pain points that that CFO is feeling every day? If you can relieve a pain point, if you can give me more time in my day, then you’re going to have a much easier road to getting that CFO to not only give you time to listen, but also to share what some of their concerns are and how you can help each other. And I think that’s the key factor when I think about a CFO.

John Farkas:

Yeah, Todd, it’s a very consistent theme when I talk to C-level executives and health systems. The desire to be known and understood, the desire for people who are coming to them and trying to get their attention to have done the work needed to understand what the actual scenarios are is so important and very uncommon, unfortunately, it seems. Because anytime you’re a solution provider, your focus tends to be on your solution.

And you have to understand the adjacencies and the comorbidities, if you will, that a hospital leader is facing when trying to decide. There’s so many opportunities for improving, optimizing, increasing effectiveness. And if you could do them all, that would be awesome, but you can’t. And so I think that doing the work to understand what these factors are is really important so that you can put that in your top line, so you can work that farther into how you’re addressing what you’re bringing in this case. Thanks for that.

Todd Nelson:

Let me hop in there. It’s developing the relationship. I mean, if I think about many financial institution relationships, banking relationships, it really is a relationship that you develop over time. It’s not transactional. Hopefully, eventually there is a transaction there, but developing that relationship, understanding the pain points. So that when something maybe doesn’t go as planned, you’ve got the trust that’s there to be able to say, “Well, you know, we also have this thing,” or you can pivot together and work on it together to solution.

And so I think to your point about relationship adjacent, we went through a pandemic. I don’t know if you heard about that. It was a thing, I guess. And evidently, that caused a lot of different pain points and pressures from folks. And those that worked together and trusted and developed that more long-term relationship I think are seeing the fruits of those labors.

John Farkas:

Yeah, that’s definitely a good underscore. And speaking of fruit of the pandemic, we should talk a little bit more about labor costs. If you’ve been anywhere near the space, you know that health systems are facing incredible pressure around the cost of labor and the availability of labor, which is we have a supply and demand curve there, and it is affecting everything, I mean, in many, many ways. I know that that’s an area that you focused on in the study, Trish. I’m interested to hear how… Give us some perspective on the nature of what we’re seeing there.

Trish Rivard:

Yeah, absolutely. So of the respondents, 96% of health CFOs indicated labor is a top challenge. And within labor, so we’ve drilled down into different categories, 99% of health systems indicated that nursing was the biggest pain point when it comes to labor. And this is consistent. We saw the shift to contract labor during the pandemic. It’s continued in the post-pandemic time. Health systems are really struggling with nursing. We’ve seen a definite improvement in terms of overall nursing and nursing costs.

But even in the beginning of this year, it was still the top pain point. So how are health systems CFOs solving it? So definitely continuing to outsource, and at the same time, they’re increasing wages for nurses. We also heard through the qualitative work and other CFO interviews that we’ve done, health systems are doing everything and anything they can to be creative around nursing. So they’re actually creating internal outsourcing, contracting, developing labor pools for nursing.

They’re really working hard to retain nurses, which is critical. We’ve also seen other areas of challenges with labor is in the revenue cycle and IT. One important thing to note is this study was conducted prior to the Change Healthcare breach. So all of the data had been gathered prior. So there’s no reflection of the increased costs associated with that Change Healthcare breach and the significant impact that had on the revenue cycle.

So from a revenue cycle standpoint, health system CFOs, they’ve been increasing wages, but looking to technology even more so than outsourcing. Whereas nursing, there’s a view that contract labor outsourcing is still necessary. Revenue cycle, the shift seems to be like what new technologies can we bring? And then for IT staffing shortages, increased wages, technology, and also an increase in outsourcing for IT are some of the areas of focus.

John Farkas:

Yeah, I can say from my perspective, and Todd, I’m curious to hear on yours, I know that revenue cycle from a technology and innovation perspective was a pretty sleepy space for a long time. And the new things or the innovative things were very incremental. And recently it seems like it’s really awakened.

There’s a lot of different technologies coming that are AI empowered, allowing for enhanced efficiencies that seem to really be making a difference and seem to have caught the attention of a lot of health systems that are working very diligently to overcome some of these challenges. That’s been very apparent to me in the last… Well, since the pandemic. Todd, I’m curious your perspective on that.

Todd Nelson:

Yeah. If you think about revenue cycle has a lot of different areas that it touches. You’ve got your frontline revenue cycle people that are right there from a labor perspective when you walk into a physician’s office or a health system. Those frontline people are generally new to the workforce. You compete with those people, which are gathering all of your data, by the way, and getting it right so that your revenue cycle can actually work, you’re competing with large retail organizations that pay about the same wage.

And so your competition for those folks are… Let’s say I’m working in a department store doing basically the same thing as I am in a health system. And when you come to a health system, most of the time you’re not super happy, excited, feeling good, having a great day and going home with something, except maybe a prescription. You leave a department store, you’re coming home with something that you wanted, that you bought, you’re excited about, new clothes. So we’re competing with those people in the front line from a revenue cycle perspective.

To your point of automation and the explosion in the revenue cycle, which is more middle or back end of revenue cycle, that’s been a good thing, but it’s been slow to adopt, because there is still concerns about privacy and security and where those are. And if you think about ways that we’ve been able to pay our electric bill for decades or many other things that have been slow to be adopted in the health systems because of that security thing, it is moving in that direction, which is a good thing and I think that will help.

But we go to IT shortages, everybody’s competing for IT talent. That has been a longer term, I would say, concern of folks, but you’ve got major consultancies built around IT talent now. That’s not bad, but it’s causing a tremendous amount of competition to retain the staff that you have that in many cases, by the nature of the world of IT, you don’t have to be physically located in the building that you’re serving to do it. So you may want to live in Des Moines, Iowa, but work in Silicon Valley and get Silicon Valley wages and a cost of living in Des Moines, Iowa.

And that creates a competition when you’re a health system for IT talent trying to serve the needs that you have right there. We used to think it was people moving to the other area that was causing the raise in wages, but it’s actually people staying where they are and working for somewhere else that’s causing that difficulty and the shortage in the IT area in health systems. And then last but not least, if I didn’t talk about clinical folks, our nursing staff, our workforce, and even our physician partners, people would wonder, does he really know what happens in hospitals anymore?

And there’s a lot of different strategies for recruitment and retention, from a sign-on bonus to a loan forgiveness, to flexible work hours, to compensation arrangements that are more than just raising the base wage, which we’ve seen a lot of. And the long-term impact and effect of that to the point of one of the comments that was made earlier, there’s nobody saying, “Wow! Yeah, those costs for hospitals are going up. We should probably pay them more. That’s what we should do. Where can we get more money to pay them?”

Well, that’s not following through. I mean, that’s not what we’re seeing. And so really these increased labor costs are creating that pressure from an expense side of things that hospitals are having to be creative, whether that is creating float pools for all these different areas. In some cases, going together with other systems or organizations in their area to create an IT float pool or a revenue cycle float pool or a nursing float pool. It is just they’re trying to get creative and in essence cutting out the middleman. And I think that’s good, but there’s certainly a lot of pressure to perform.

John Farkas:

So one of the things that I’m curious about, as you talked before about the role of the CFO as far as future casting and being prepared, what I know is that as we look at the labor demands on health systems and we look at the population curve that is all getting ready to crash onto our shores in the next several years, how are CFOs thinking about what is getting ready to happen as far as that crunch?

Because I know labor costs are not… That’s not a curve that’s just going to magically disappear when we put some tech toward it. It’s going to be a major issue for some time to come because the supply-demand curve is not going to be in patient’s favors or hospital’s favors. How are you seeing that?

Todd Nelson:

From a demographics perspective, if you think about the population, we’re moving into… Not only our population is getting older, but our workers are aging out of the workforce. And so a lot of hospitals…

John Farkas:

And we’re not replacing them at the rate we’re losing them.

Todd Nelson:

That’s right. That’s exactly right. What folks are doing is they’re creating partnerships with community organizations, universities, trying to reach into high schools, grade schools to say, “Hey, yeah, you heard all this terrible stuff about the pandemic, but being a nurse or being a doctor is still a pretty cool thing.” Going back to making the profession something that people want to do versus what for a period of time was somewhat of a negative connotation related to how people were being treated.

I’m here to take care of you. Please don’t be angry with me. So turning the page a little bit, talking younger grade school, high school about the profession, and there’s been campaigns before about how it’s great to be a teacher as an example. So I think there’s a lot more campaigns about starting earlier. And then unique community partnerships to develop formal training programs for clinicians, as well as IT professionals.

And then last but not least, once you get them in, very formal preceptor programs, trying to open up nursing slots, trying to open up other clinical slots where people can get trained before they’re thrown into a clinical situation. So there’s a lot of simulation labs and other ways that we can train people before they’re in front of a patient. And we’re seeing a lot more investment now for the long-term in those relationships because we know that there is a shortage and it’s going to continue and could potentially get worse if we don’t start investing now.

John Farkas:

So safe to say, as we’ve already mentioned, this is way up in the face of pretty much everybody. I think you said 99%, Trish, of folks in the survey would hold labor costs as a primary issue. Let’s turn our attention to the next one that we’ve already mentioned because we all know it’s there, and that’s the challenges as pertaining to reimbursement. Trish, what did the study uncovered there?

Trish Rivard:

So for 84%, so payer reimbursement was the second top driver of market compression with 84% of CFOs indicating that their reimbursement was a top challenge. Of the respondents, so 90% indicated that either technical or clinical denials or both was the top challenge in revenue cycle. 82% of CFOs indicated that denials are higher than they were pre-pandemic time. What we see a lot in the revenue cycle is these technical denials that have exploded from Medicare Advantage Plans.

So in general, denials are going up. In fact, I just heard an article about a week ago saying that I believe it’s Huntsville Hospital Health is no longer accepting UnitedHealthcare plans because the denial rate for UnitedHealthcare was 75% higher than other health plans. And so Huntsville said, “Enough. Somebody needs to take a stand here.” It’s mind-boggling to me that health plans are able to get away with this consistent denial even with every state has an insurance commission and somehow the health plans are still able to get away with this.

But we’re seeing specifically Medicare Advantage, and I think that’s going to be… We’re starting to see a lot of news come out about Medicare Advantage, where CMS is realizing that maybe these Medicare Advantage Plans have been overly risk-adjusting on certain patients so they can increase their reimbursement. What these Medicare Advantage Plans have done is they systematically deny claims from the health system so they can get the medical record. So they get the medical record and then they can take it and they can risk adjust.

But this process is creating so much burden on the health system to have to receive the denial, appeal the denial, submit the medical record, and then get paid that from a cost standpoint, it’s just out of control. And so what we’re starting to see, and we saw this in the survey, is 61% of CFO respondents, this is earlier this year, indicated that they were either stopping the acceptance of one or more Medicare Advantage Plan or considering stopping one or more Medicare Advantage Plan.

So I think what we’re starting to see, and I’d love your perspective on this, Todd, is that health systems are looking at this going, okay, I have this Medicare Advantage Plan. I have this one, two, three plans for Medicare Advantage, because there’s so many out there, but these couple of plans that are denying everything or adding all these additional ownership requirements with prior optimization and really hard to work with, we’re not making any money. In fact, we’re losing money and we have a low patient volume.

We need to be done with them. We need to stop accepting them. And yeah, it’s going to create some patient friction by doing this, but over time patients will realize that these are not the best plans to work with and they’ll find a different Medicare Advantage Plan. But we need to stop accepting the ones that are just creating all this burden and we’re losing money by working with them. So I think we’re really going to start to see a lot in the news about health systems saying enough is enough here with these Medicare Advantage Plans.

John Farkas:

Yeah, Todd, I’m curious your perspective on that because I know this is getting into it here.

Todd Nelson:

Yeah. I mean, if you think about any agreement or contract that you create, you accept a certain rate for that agreement and you model it out. And both sides come together and in theory you say, “Okay, well, I think this is a fair agreement. So you’re going to pay me 90 cents, 90%. 90% seems good. I can still make some margin on that. You can make some margin on that. Everybody’s going to be happy at 90%.”

But if at the 90% and you’re a hospital all of a sudden becomes 0% because I’m not paying you on everything you send to me and I have to fight for that, then eventually it comes back. It’s costing me more. Maybe I overturn 99% of them, but the expense to get that 99% of 90% is 15% more. Then not only does my brain hurt from the math I just did in that example, but I’m not getting paid what I thought I was going to get paid. So it’s no longer a fair deal.

And to me, that’s where we are seeing hospitals and health systems say the reason I agreed to 90% is because that’s what I thought net end of day I was going to get. But if now it’s really 70% or even 80%, then I should have agreed to 98% because I knew it was only going to be this much. And I think that’s where there’s so much staff time involved in fighting these denials, the paperwork involved, the consternation between the patient that gets a denial and wonders, “Well, why did it get denied? I thought I had coverage. You told me I had coverage and now I don’t have coverage.”

And so then it becomes a battle back and forth. And so the decision to walk away is not purely a financial decision, but it’s also a patient impact decision from the fact that they’re also receiving a denial for care that was appropriate, but was technically denied, which causes confusion. So then you have to say to yourself, okay, yes, it’s not the deal that I thought, but it’s now confusing my patients.

So now if I don’t accept this plan anymore, if we break our agreement, if we don’t renew it, our patients are going to have to go somewhere else. And you can only imagine the dynamic between the patient, the physician or clinicians, the hospital, the community, the board members, and the payer. And so in some cases, we’ve seen people continuously trying to work on a better way, a better methodology to do some of these things through automation.

HFM, our magazine, we did an article, a feature story called The Battle of the Bots, where you’ve got these automated denials over here from the insurance company and then the automated fighting denials from the health system. There’s no real people involved. It’s just literally the bots going back and forth. And again, it becomes a really big margin pressure.

When you’re trying to think about agreements that you come to in good faith with any organization, and then there’s a systematic process of saying, “No, we don’t want to pay you. Oh, wait, okay, I guess we should pay you,” and 99% of the time they’re getting overturned, it feels very disingenuous, and it’s not good for the patient at all because they’re stuck in the middle.

John Farkas:

Especially when the payers post their profits. That’s where it’s hard to watch, for sure. Well, let’s turn our attention to supply chain because that’s another thing that the pandemic brought front and center that has found its way to lingering in multiple different ways. What have you seen in that context, Trish?

Trish Rivard:

Yeah, so of the CFO respondents, supply chain came in as the number three driver of margin pressure with 47% of CFOs indicating that supply chain was a top challenge. What’s interesting about supply chain is while less than half of the respondents indicated it was a top challenge from a margin perspective, 86% of CFOs expect that the increase in pharmacy costs and 73% expect significantly higher cost pressure in medical devices. What I’d say about supply chain is right now it’s being overshadowed by the cost and the payer reimbursement.

John Farkas:

But they’re real numbers.

Trish Rivard:

But the expectation is that pharmaceutical and medical device costs are going to increase significantly in the next one to two years. So Todd, we’d love your thoughts on what you’re hearing and what’s driving these increased pharmaceutical costs and med devices. Is it really just new innovation that we’re seeing so that we’re seeing better outcomes with patients as a result of this increased cost?

Todd Nelson:

I mean, research development innovation is great. I mean, we all want the magic thing that’s going to fix us, whether that’s the super-duper hip or magical drug or treatment that’s going to be there. But the reality is for CFOs or health system executives, and as we think about wanting to provide the best outcomes for our patients, we also have to think about what the clinicians are using, what they’re trained on, what they’re comfortable with.

And so a lot of organizations look at trying to standardize pricing of pharmaceuticals through a formulary, standardizing use of medical devices. But you have to remember, we’re also dealing with a labor shortage. So we need every clinician we can get. We can go to them and say, “Well, we really think you should use this lower cost thing that we just negotiated a great price on,” and they’re going to look at you and like, “No, I want to go to the place that allows me to use what I want to use.”

And so it’s a game I don’t want to say per se of cat and mouse, but to some extent, it’s hard to create unless you are all in the same boat rowing together, incentivized together, everybody moving in the same direction. And yes, there are increased cost pressures. I mean, inflation was a deal, has been a deal for folks, but it seems very easy for a supplier to say, “Well, I had a tremendous amount of inflation increase, so I’ve got to put 9% ahead. That’s the new cost increase.”

And even with our own business partners that we work with, sometimes we have to say, “Well, could you actually articulate what in your business specifically was that inflation cost?” And I think that’s where CFOs are asking their business partners to get a little more granular with what exactly was the cost. Was it an ingredient? Because it’s very easy to say, “Well, it’s all the R&D costs of creating the new thingamajig,” but really what R&D costs.

I mean, I realize there’s opportunity and people are being opportunistic and we believe in those types of things. But that being said, being able to actually articulate what the true costs increase are and then work with our clinicians to say, “Is this thing worth a 20% premium,” whatever the thing is from a supply cost perspective. And again, that’s a careful balance.

You want the clinicians to be able to use the products that they’re familiar with, that they’re comfortable with. You don’t want a patient or a clinician to ever feel like something’s cheap. So it’s involving them in the value analysis, in the decision-making, and many times asking them, if they don’t believe it’s worth that premium, asking them to challenge those that are trying to sell that product or service and partnering with them.

But I think innovation is an awesome thing, and it does come at a price and a cost. But is the price worth $3 million a dose? I don’t know. I don’t know if that’s sustainable.

Trish Rivard:

The whole notion of standardization of devices, that came up a lot in the qualitative interviews. And from a CFO perspective, it’s like, okay, well, you currently have 10 devices, if we can streamline down to two or three. And then you have the physicians saying, “Yeah, but I was trained on this particular device. I did my residency and I was trained, and I’ve been using that device for 10 years. And I have to think about my malpractice insurance, and I have to think about just my comfort level with a different device.”

And those are things that don’t necessarily factor into the economic decision, but those are… Physician preference is a really important consideration. And Todd, I love how you connected that back to the labor shortage on the clinician side because that’s something that I hadn’t really thought about as well is you’re also competing. We talked about nursing, but physicians, while health systems don’t pay physicians directly, there’s a really important relationship between the physicians and making sure physicians are happy at the health system and the partnership.

John Farkas:

Let’s move to our last chapter here, because I think it was a surprise to me after what we’ve encountered in the last 18 months or so to see cybersecurity below supply chain, for instance, as some of the pressures go, but it’s the next step on our docket. So Trish, what did we uncover about the relative cost of AI and cybersecurity, two frontiers here that are showing up in a lot of planning and deployments? But what are we seeing there as far as CFO’s view on those?

Trish Rivard:

So from an AI standpoint, AI is fascinating. So there are a couple questions that Rita Walker from the HFMA suggested we include in the study, and I’m really glad we did. And actually Todd had suggested we include the, do CFOs really believe that AI is going to lower the cost, and the answer is no. About a third say it’s going to ultimately decrease costs, and a third say it’s going to increase costs, and a third say it’s going to stay flat. So from an AI standpoint, because there’s just this expectation that AI is here.

Health systems implemented EPIC years ago. They thought implementing a better EHR was going to lead to decreased costs, and then what they saw was, nah, not so much. It actually increased your costs because you have to have more technology support. And then from a clinical standpoint, you need more resources. And so they’re really, I think, being very practical about AI in that best case scenario, it’s going to be cost neutral. It would be great if it save costs.

And you look at the revenue cycle and what Todd had just talked about, where you have The Battle of the Bots, the health plans get more sophisticated. And so then from a revenue cycle standpoint, you need to be more sophisticated and keep up. Now we have bots fighting bots. Has society really benefited from this? Not so much. But AI, I think health systems CFOs are being very practical about it. Some of the other findings, and this was an area Rita had suggested, was looking at the governance structure. Health systems are not prepared right now for AI.

So only 8% of respondents have either a mature or near mature governance structure in place for AI. That’s significant. And this is something that really would encourage vendors to think about as you come with new AI-based solutions, there’s an opportunity to educate the health systems about what are some of those things that they should be thinking about and asking and providing sample frameworks for AI and AI governance, thinking about being a good partner as you bring an AI-based solution, and then thinking about cybersecurity.

So again, this study was conducted prior to the Change Healthcare breach. And at that point, 50% of respondents said that they have seen a significant increase in cybersecurity-related spend. So I think the thing about cybersecurity is you have to do it. Even if you don’t have it budgeted, you have to find the money for cybersecurity and to make sure that your health system, that your data infrastructure is tight. And then here we have health systems spending a significant increase in money, and then the Change Healthcare breach happens.

And it’s not on the health system side, it’s actually a vendor side, a large vendor, a large vendor owned by UnitedHealthcare has the data breach and health systems are struggling. I’m sure if we asked the increase in cybersecurity spend, if we asked it a month or two later, it would’ve been a lot more than 50% saying they’ve seen a significant increase in cybersecurity spend.

John Farkas:

I was curious your perspective on that, Todd, because I know that post Change, certainly the heat is on a number of fronts. And I think that everything I hear from the folks that I stay close to that are healthcare cybersecurity vendors, they’re busy as can be right now.

Todd Nelson:

Yeah, I don’t think there’s any doubt. I mean, I think a phrase that we hear a lot in regard to cybersecurity is it’s not a question of if, it’s a matter of when it’s going to happen to you. And so whether it’s a vendor breach or a health system breach or whatever, we all need to be prepared for it. I think maybe just a little bit naively seven, eight years ago, we thought, well, nobody would attack healthcare because that would hurt patients. So we should be okay. We don’t have to overspend because we only have so much money anyway.

We don’t have to overspend in cybersecurity. We don’t have to invest in defense. Let’s just buy insurance, and that’ll be okay because they’re probably not going to come after healthcare, right? Yeah, yeah, yeah, yeah, we’re okay with that. Well, the reality is these folks don’t care. They’re coming after wherever the money is. And the reality is they’re going to do a breach, they’re going to continue to test and ransomware and all the horrible, terrible things that we’ve seen in the headlines that have happened to…

I mean, they’re criminals. They’re out to make money, and so they’re going to go where people are vulnerable, where they can use leverage, and data is leverage to do that. And so health systems are investing a tremendous amount in cybersecurity, in governance, in understanding systems, in testing and getting third-party testing, and then investing in what are their vendor partners doing to protect them.

So how are we protecting information and data and equipment and all the things that you wouldn’t think you would need to worry about related to the new connected world that we’re in that are part of the healthcare system. And when I think about AI, as a general rule, hospitals and health systems are just trying to understand, I mean, everybody has a “AI solution” now. Is it really AI or is it automation? And do I need AI? Maybe I just need things to be automated, which is very different than AI.

There’s a whole continuum from simply automating a task up to artificial intelligence and what is the pathway to do that and what are the use cases, whether those are revenue cycle use cases, whether that is lowering the burden on clinicians by automating certain tasks, whether that is full artificial intelligence or not. I think people are really treading lightly, and especially in the healthcare finance world. I mean, our basic training is to be conservative, to be risk-adverse in general.

So whether it’s AI, although it’s cool and shiny, or cybersecurity that’s going to prevent risk, we’re really thinking about… I mean, all things being considered, cybersecurity seems like a bigger risk that we need to make sure we’re investing in versus artificial intelligence that we really don’t understand if there’s a return on investment, if it’s going to help us and is risky and new and comes fraught with, in some cases, all these other things like cybersecurity. So now we got to figure that part out.

So this cool new thing that everybody seems to have, whether they do or not, called AI now is increasing our cybersecurity risk. So again, I like things that are shiny and new. But as an accountant, as a conservative fiscal person, my role in my health system is to protect the future. And so I’m investing in anything or being involved in anything that’s going to make us more secure. And in cybersecurity, we’ve seen just a tremendous amount of investment in that area.

Trish Rivard:

So Todd, when vendors come and say we have an AI-based solution, from a health system CFO perspective, are they excited? Are vendors, are they better served to lean into AI, even if it’s more automation? Do you think it’s better or it’s worse?

Todd Nelson:

I mean, I think the CFO is immediately skeptical. And just because it’s AI, we don’t know that it’s better, which is sort of like any new device or any new drug. Okay, so it’s new, it probably costs more. Does that mean it’s better? Is it more effective? What does it do for the system, the people in the system, reduction in cost, improvement in revenue? What are the hard facts around that?

John Farkas:

Compliance.

Todd Nelson:

So I don’t know that saying AI is immediately, oh my gosh, AI, that’s going to be the savior. Now then again, in a room full of CFOs, there’s some questions people are asking like, hey, are you guys using AI? Oh yeah, we’re using AI. What’s your day’s cash on hand? Oh, mine’s pretty good. What’s yours? I mean, there are certain phrases that we look at and we talk about because they’re shiny and interesting and we don’t want to be left behind, and yet we want to be conservative and risk-adverse because that’s the role.

So I think sometimes our business partners think that they have to have AI. And so by saying something’s AI, they’re going to get in the door. And I would argue that there’s so much skepticism about what it can actually deliver. If you don’t have it, you don’t necessarily have to go create it to be able to deliver automation at whatever stage that’s going to help a health system.

John Farkas:

AI is about solving problems ideally, and it’s about how well you’re able to solve the problems and how you get the problem solved is… At the end of the day, it doesn’t matter if you’re solving the problem well. How do you solve the problem? What does it all end up saving? How reliable is it? And is it going to protect us from litigation and compliance concerns and regulatory failures?

Is it going to decrease our exposure in those regards? I mean, that’s the end of the day what we’re looking at. Todd, I’m curious, as you think back at your time as a CFO, is there a vendor of a truly innovative solution that came across your desk at some point that did a really good job of addressing your concerns? And if so, what were some of the things that they did that made it easy to say yes?

And I know I’m putting you on the spot with this one, but I’m just curious if you can think back and think back to a decision that a vendor actually made easy by how they came alongside you and helped you understand what they were going to truly do.

Todd Nelson:

I think the way I think about… There’s a couple of vendor partners that I can think about that it was about understanding what my needs are, what kept me up at night, what the pain points were, what my concerns were, so being able to articulate them, ask more about what were some of the problems that we were facing and concerns that we had, not me personally, but the system had and how could a solution that they have solve one of those problems. And so the solution wasn’t always a revenue increase or a cost reduction.

Sometimes it was a non-financial benefit for the system, so if that was making our clinicians happier or it was a better patient outcome, if it was a frictionless environment. But it was thinking about everything from what were our needs and how could their solution meet one of those needs to then fully articulating not just the financial part of it, but all the other non-financial benefits, good and bad in some cases, the impacts, what was going to happen if you did this solution?

So they really helped me think about the finance part of it, but also the operational part of it. So maybe I just “saved” a bunch of money from a revenue and expense perspective. But if I switched to the new thing and all of a sudden, all of my clinical staff in the OR were unhappy, and so they just generally started leaving, I had attrition, they started doing, if I’m a physician, doing the cases somewhere else because they didn’t like the thing I switched to or it took them longer and in general made them more efficient, that was a pretty poor decision on my part.

When a vendor partner comes and really talks through and spends the time to walk through the implementation part of it, the operational impacts part of it, has a good ROI model related to it, yeah, I like the ROI stuff, but I like all the other non-financial impacts as well. If I think you’re a nail and I’m selling hammers, guess what I’m going to sell you? So I think it’s understanding the needs that I have first and then coming up with solutions that maybe aren’t what I need right now, but that’s okay.

So you know what? We stay in touch. We develop that relationship over time. Because more often than not, when you’re in the healthcare space, that need is going to come up for your organization. And if you’re there and you’ve developed the relationship, I think that’s really the key to being there and listening. So that when you’re in your R&D meeting and someone says, “We’re thinking about some new product development. Well, does anybody know what the CFO thinks? What are the pain points hospitals are doing,” you actually know what those are.

And then when you’re developing solutions, it’s based on customer or even industry feedback, not just what you think is the best. And so I think to me, that’s what was always helpful is to watch it come back around and listening, because those are the people also that I invested my time in when they wanted to come and have a meeting with the CFO. It’s like, oh, I remember John. He was great. He always asked about…

I just saw this in the news, and it was more than just this is the thing that I have that I want you to buy. It was about the context of the industry and how it was impacting our system. And to me, that was always the key of folks that we kept inviting back to have that conversation.

John Farkas:

Thanks, Todd. That’s great insight and important thing to underscore. Trish, I’m curious on your end, as you put all this together, was there anything that stood out to you, any surprises, anything that you felt like was just the real salient point to drive home here in the context of what you put together?

Trish Rivard:

Yeah, there were definitely a couple of things. I think the frustration around Medicare Advantage, that really stood out. Health systems, they’re at that breaking point. Enough is enough here. We can’t have this ridiculous denial rate, and then have 99% overturn rate on these denials, it’s just too much. Considering or planning to drop Medicare Advantage Plans, that I thought was really interesting.

And when we conducted the study, that was really predicted. We have seen health systems start to drop Medicare Advantage. We’ve seen it in the news, if you follow the headlines on Becker’s or other healthcare publications. And I think the other thing that was just so interesting is from an AI standpoint, health systems are just… Like all of us, they’re struggling with how to think about it.

But going into this, I would’ve expected more than 8% to say, yes, we’re ready for it. I mean, we have a lot of large health systems out there. I would’ve expected to see closer to 40 or 50% say, yeah, we have a governance in place and we are prepared for it. But that 8% number really surprised me.

John Farkas:

Yeah, I’m anticipating that’s going to be a fast moving number in the next 12 months for sure as we get to… Well, as the technology continues to take substantial leaps forward. And as entrusted with more, it’s going to become increasingly evident that clear governance needs to be in place. And I’m guessing that’s going to be a pretty strong theme we’re going to see over the next six to eight months. Trish, tell us about if people are wanting to get a hold of this study that you’ve put together, what’s the way they can get their eyes on this?

Trish Rivard:

So the study is available both on the elicitinginsights.com website, as well as hfma.org, and the report is available for $2,500. If you’re interested, feel free to reach out.

John Farkas:

Just lots of specific insight as well. If you are anywhere near the space and CFOs are on your target that you’re interested in making sure you understand and get… I mean, we’ve just skimmed the surface of what this covers. There’s a lot of very good specific insight and information in the study. So check out elicitinginsights.com or hfma.org. There’s two good paths to get that. And really want to encourage you, if you are in this space, it’s very worth your time.

Trish Rivard:

This report is a 40-page CFO persona. So as a market research company, we get asked to do buyer personas all the time. And typically, we’ll interview five buyers, understand their pain points. Within the study, there’s an actual persona at the end for marketers, sales executives to have it all consolidated in one page. Typically, for a buyer persona to have a custom one developed, we would charge a lot more.

So really excited about this report and this study and the opportunity that it can create for vendors to be able to better understand their buyer and like Todd talked about, just have a better conversation. And then you start thinking about content creation and content that’s going to resonate with this economic buyer at the health system. And there’s so much in this report that can really help with thought leadership and better content creation.

So really, if you’re interested and if you want more information about the study, we have an overview where you can reach out, info@elicitinginsights.com. We could provide you more information about this study if you’re interested.

John Farkas:

That’s awesome. Thanks, Trish. Todd, any final thoughts here as we wrap up?

Todd Nelson:

Well, I mean, I think the question that you asked me before was think about a vendor partner that did a really nice job. And the reality is, is if you understand what my pain points are, and to Trish’s point of the 40-page report, when you come to ask for an appointment, you’ve already got a head start. Because frankly, you know what the elevator pitch is.

And it’s not about the thing that you have, it’s about, I understand that everybody knows that you’re facing high labor costs and you’re now trying to evaluate artificial intelligence and increased supply chain and payer, da-da-da-da, all the stuff that we’ve talked about today. I mean, tell me how those things are impacting you and your health system. I saw the study that HFMA did with da-da-da-da-da. To me, that is a great opportunity.

When you’re trying to get that appointment, have that discussion to understand that you believe you understand the environment, but you want to learn more. And as you could tell from this CFO persona, we like to talk about ourselves and the stuff that’s going on. So when you ask us questions, we think you want to know. So we’re going to talk to you and tell you what our pain points are, which helps to design a relationship, design a project or service, and see how you can help us solve a problem.

And I’ll tell you what, no matter what problem you help us solve, whether it’s the one that your project or service does, or it’s the fact that I’m going to be in X city in two months and I’m looking for a restaurant, that endears you to us and we are interested in that. It’s about that relationship. So appreciate the insights the report put together, and it’s great working with Trish and really appreciate the opportunity to be here today.

John Farkas:

Well, thank you and we appreciate it as well. And just to underscore here, I mean, for health tech innovators, anybody bringing a solution to the market, if you’re trying to get across to the CFO, and this is true of any other C-level persona that you’re trying to relate to, it’s not just about pitching a product. It’s about becoming somebody who they trust, who knows that they have an empathetic understanding of what’s going on, and someone that’s going to help them ultimately in the CFO role is going to help them toward achieving a sustainable financial health profile.

I mean, that’s a big part of the deal. And so if you’re working towards those ends and help them understand that you share that objective, that’s going to go a long way. Trish, Todd, thank you both for joining us here today. So thankful for the input and the insight, and looking forward to the next opportunity we have to chat.

Trish Rivard:

Awesome. Thanks, John.

Todd Nelson:

Thank you, John.

John Farkas:

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