When it comes to health systems operations, serious financial concerns are often at the most worrisome for healthcare leaders. With growing pressure to reduce costs while increasing the quality of care, these leaders must use every tool at their disposal to remain financially solvent. A healthcare MBA from George Washington University strives to equip graduates with the knowledge, skills, and experience to help confront these concerns while raising the standard of care in health systems.
Transition from Volume to Value
This is a concern for hospital executives across the country. There are several ways health systems are attempting to make this switch. First, payers and hospitals must agree on new goals and incentives for effective payment and care delivery. Second, to shift to a value mindset, health providers need to work collaboratively to manage care, especially for those with chronic illnesses. Finally, strong leadership, in the form of executives, physicians and hospital boards, must be visible and work to demonstrate a unified vision and focus.
Medicaid is a government program started in 1965 and designed to pay for medical care for individuals who are unable to afford it. The system is very complex and doctors and care providers can have difficulty in getting reimbursed for services rendered. Many physicians have stories about long reimbursement times and increasingly complex paperwork their staff is forced to do. In addition to less money and longer waits, many physicians are reluctant to treat Medicaid patients because they often require much more time and attention than the average patient.
This issue arises when hospitals attempt to collect payment from patients without insurance. The Affordable Care Act has insured millions of people that previously were uninsured. The high deductibles that come with this new health coverage is increasingly difficult for care providers to collect. “It feels like a sucker punch,” said John Henderson, Childress Regional Medical Center’s chief executive. “When someone has a really high deductible, effectively they’re still uninsured, and most people in Childress don’t have $5,000 lying around to pay their bills.” Collecting this increasing amount of bad debt is a major concern for healthcare leaders.
57% of hospitals identified the increasing cost of operation as being a systemic problem facing their 2016 year. Supplies, staff payroll, equipment and information services, and other basic costs of operation are on the rise at two to three times faster than the rate of inflation. A 2014 report has this dismal prognostication: “Hospitals that keep operating according to business, as usual, will have a -15.8 percent margin by 2021.”
These increasing costs are not simply the fault of inflation. As the population grows and the average American’s health deteriorates, there is a much greater strain on resources now than in previous decades. Patients are demanding more from their doctors, staying in the hospital for longer periods of time, presenting a greater complexity with their cases, and requiring a higher intensity of services. This in turn leads to a strain on hospital staff’s time and manpower. More time (and thus money) must be spent on hiring and training staff to deal with the increasing workload.
Reducing Operating Costs
Concurrent with the rise in healthcare costs is the pressure for healthcare system administrators to find ways to reduce those costs. This is a considerable strain for healthcare leaders, who must balance the imperative of providing quality healthcare for patients with the demand of their stakeholders to spend less money in that process.
And while many of the cost-saving solutions lie within the scope of new health informatics technology, the cost of installing these systems and train staff in using them presents a significant financial hurdle.
Financial concerns are a constant issue for healthcare leaders. With rising costs and pressure to increase efficiency and care, financial strategies are crucial for those in charge of keeping healthcare organizations in the black. The classes students take while getting a healthcare MBA from George Washington University help them learn the fundamentals of the business side of healthcare. This allows GW graduates to succeed in the high-pressure world of healthcare administration.