In a closed-door discussion, healthcare industry leaders reviewed current industry issues, pending legislative proposals, and looked to the future.
Continuing pressures within the healthcare sector, the need to protect and improve patient access to care, and the national landscape post-election — these are three key themes at the 2024 Health Leaders recently held in Washington, DC. It was on the minds of chief financial officers at the CFO Exchange. , area. How do these forces impact the nation's health system chief financial officers, and what do they portend for 2025? In a private discussion sponsored by Bank of America, a private discussion of these markets We purposely explored forces and their potential compounding effects on healthcare organizations. The roundtable included CFOs from five major health systems.
Bank of America's Charles Alston and Melinda Ramsdell share the panel's key conclusions.
Q: How is the health system working to improve/expand/protect access to care?
Not-for-profit hospital CFOs face hard facts as they navigate day-to-day situations. At the top of the list are significant shortages of doctors and nurses and reimbursement rates in many fields that have not kept up with inflation and, in the case of Medicare and Medicaid, do not cover costs. Additionally, nonprofit hospitals' tax-exempt status has been questioned by some critics, creating new headaches for CFOs.
Despite these headwinds, healthcare executives remain committed to their patients and their collective mission: to provide the best care and expand patient access to that care in rural and urban markets where medical deserts exist. is intensely focused on.
CFOs demonstrate a united spirit when exploring all options and sharing ideas. We partner in unique ways with churches, law enforcement, and mental health providers. Investing in telemedicine and virtual care tools. Work directly with major employers. And we will have beds in micro-communities rather than in the main hospital towers. These executives understand that there is no one-size-fits-all solution to the challenge of providing good, accessible care. We need to determine the specific needs of each community and understand exactly what resources already exist for potential health care provider partners. At that point, hospitals and health systems can decide where and how to invest and with whom to partner to improve access for all members of their communities. Although CFOs report success with this approach, many communities lack the financial resources needed to close the access gap.
Q: What should healthcare providers expect after the election and into 2025?
The consensus is that the results of the national election will not immediately change anything for medical institutions. As a result, the healthcare ecosystem will not be fundamentally disrupted. However, our committee agreed that there are some things to be aware of. One is the stock market trends in response to the election results. Everyone is eager to see the market continue to romp as it has for most of 2024, setting new records and then breaking them again. Is such performance sustainable? CFOs are understandably concerned that an economic downturn and the potential for lower interest rates on their organization's investment portfolio could impact both balance sheet strength and cash position.
Second, health industry executives are watching to see what happens at the Federal Trade Commission. The Federal Trade Commission's recent priorities are controversial for healthcare organizations. During the Biden administration, the FTC scrutinized potential mergers that would narrow consumer choice within a particular market, while also allowing large systems to merge across geographic regions. Will this situation change under the new administration? stay tuned.
Finally, panelists are concerned about the integrity and sustainability of the federal government's 340B program, which has been targeted by some pharmaceutical companies. Will Congress clarify and uphold the intent of a program that many patients and hospitals in rural and safety net areas rely on? Could it be the subject of legislative action? And if so, what would be the economic impact on the health care system? This could be the subject of legislative action by the 119th Congress. is one of several areas that appears to be ripe.
Q: If you could only choose one thing, how would you create a sustainable health care system that protects patient care while making the reimbursement process more manageable?
From an overall perspective, roundtable participants discussed several key ideas. One is to review and simplify the Diagnosis Related Group (DRG) system. The second was to address mental health gaps in the current system by adding capacity and working toward reimbursement agreements that place fair value on this critical part of patient care. The third was to integrate Medicare and Medicaid to manage the stability of the 340B program. And finally, while fundamentally important to keeping everything else running, the group discussed the importance of moving or evolving to a less complex payer philosophy in the national health care system.
As we discussed these important and complex ideas, one thing became clear. That means it's more important than ever to develop the next generation of hospital and health system CEOs and CFOs – knowledgeable and compassionate leaders who are equipped to solve these challenges.
Melinda Ramsdell, Managing Director, Global Payment Solutions, Bank of America
Charles Alston, Market Executive, Global Commercial Banking, Healthcare, Higher Education and Not-for-Profit, Bank of America
