CMOs, CFOs Collectively Identify Value-Based Impediments

October 13, 2015 - Chief medical officers (CMOs) and chief financial officers (CFOs) must effectively collaborate – both individually and mutually – to combat the healthcare industry’s profound complexity and intricacy, confirms an October report jointly released by the American Association for Physician Leadership and the Healthcare Financial Management Association.

Both groups of individuals generally lack a reason to collectively communicate, says the report. They disadvantageously operate within the confines of their own walls via a disconnected and parallel communicative fashion, says the report. As with most other industries, this lack of communication is especially problematic and requires addressing. Collaboration of the financial and clinical realms, says the report, is essential if innovative organizational and population health goals are to be met and exceeded.

“With the advent of new care and payment models, these leaders need to converse and collaborate as never before. The transition from volume- to value-based care affects virtually every aspect of the strategy and operations of hospitals, health systems and physician practices,” the report states. “Its enormity is such that [CMOs] and [CFOs] must bridge the divide between them and find effective ways to work together.”

Collaboration of the financial and clinical realms, the report maintains, which brought both groups together to discuss what shared challenges exist, is essential if innovative organizational and population health goals are to be met and exceeded.

To nonetheless bridge this divide, three of the advised actions recommended include ideas that:

• CMOs must work closely with CFOs to help improve CFOs’ understanding of clinical care.
• CFOs must work closely with CMOs to help improve CMOs’ understanding of business practices, the competitive environment and priorities for health care systems.
• CMOs and CFOs together must develop opportunities to innovate, collaborate and share novel approaches that improve the overall value of care in a changing environment.

CMOs and CFOs identified numerous hindrances standing in the way of value-based implementation efforts. Highlights for matters of payment and incentives are as follows:

• Widespread use of the FFS model generates misaligned incentives that hinder transformation
• Lack of clear alignment of incentives across all stakeholders, including physicians, around the goal of increased value
• Need for stronger incentives to reduce and remove waste from care delivery
• Allocation of capital to joint ventures

Regarding matters of policy and organizational structure, challenges are noted as follows:

• Lack of agreement about and understanding of value in health care across all stakeholders
• Lack of a solid, broadly accepted national voice in health care
• Lack of a national strategy for moving toward value
• Poor wording of certain government regulations and certification requirements, which adds waste to the system
• Organizational culture that hinders collaboration between providers such as hospitals and payers
• Culture that undermines the will to try new models and practices without a guarantee of success
• Lack of willingness of some payers to join in value-based payment programs
• Excess administrative burdens of care delivery and associated costs (e.g., funds spent to prepare for a CMS surveyor inspection; the costs associated with claim creation, submission and resolution)

Lastly, the following is noted regarding matters of patient-related hindrances:

• Lack of understanding about patient accountability and the degree to which patients are responsible for their health outcomes
• Lack of benefit plans designed to engage patients in their care and encourage shared decision-making
• Lack of effective tools to improve population health and ultimately improve value
• Lack of understanding of the many determinants of population health and of effective mechanisms for improving population health (e.g., an understanding of the data and tools needed to impact the desired downstream health outcomes, such as reducing obesity)
• The expectation among some patients that “more care is better care”

In light of this and other information reported, there are quite a few tangible commonalities between CFOs and CMOs, says Joseph J. Fifer, FHFMA, CPA, President and CEO of the Healthcare Financial Management Association, in a press release. “For example, the two groups share an appreciation of data-driven decision making. By encouraging collaboration between these groups, we are taking an important step toward building a better health care system,” he states.

Says Peter Angood, MD, FACS, FRCS(C), MCCM, the American Association for Physician Leadership’s President and CEO, in a press release, the report bluntly addresses a variety of practical methodologies and steps CMOs and CFOs should implement. “The report is designed to stimulate both groups towards collaboration that will support the necessary changes to build stronger health care systems,” he states.

“This report sets the stage and clarifies the importance of redefining the CMO-CFO relationship,” Angood adds. “While many of the challenges in health care will not be easily resolved, bringing these groups together to collaborate, talk and reach consensus on additional actions is a step in the right direction.”