As health care has changed, so has the role of hospices’ financial leadership.
Hospice CFOs have had to retool during the past few years due to the influence of the pandemic, growing technology investments and the need to do more with less amid widespread inflation and labor pressures.
These dynamics have forced many CFOs to find new methods and tools to fulfill their organizations’ financial objectives, according to Lauren O’Dwyer, CFO of Louisiana-based Anvoi Hospice.
“As we’ve had to get more creative in certain aspects of operations, this has placed a larger burden on CFOs, because we have to ensure that patient care is not impacted,” O’Dwyer told Hospice News. “With technological changes that we had to implement as a result of the pandemic, our companies obviously had to incur additional costs and adapt financially to make up for the reduced margins.”
We’ve had to get more creative in certain aspects of operations, this has placed a larger burden on CFOs.– Lauren O’Dwyer, CFO, Anvoi Hospice
Tech investments are just one of the economic trends that were accelerated by the pandemic, driven largely by the expanded use of telehealth and remote work.
Anvoi, for instance, purchased iPads for all of its employees to make charting and documentation more efficient, as well as for “face-to-face” telehealth visits. In tandem, the company had to deploy capital to cover the costs of training staff to use these systems while remaining compliant with law and regulation.
These initiatives have been a “huge success” that has yielded “enormous benefits,” O’Dwyer indicated. Nevertheless, she, like many other CFOs, found herself borrowing from Peter to pay Paul in order to cover the hefty price tags.
During the course of the pandemic, crucial aspects of financial performance became rapidly moving targets, including patient volume and clinical capacity, wages and salaries, supply chain issues and rising expenses to name just a few.
Even with the additional government support through the provider relief fund and other programs, these factors have required financial executives to become more nimble and ready to adapt to a volatile environment, according to Alex Fernandez, the recently appointed executive vice president and CFO for VITAS Healthcare, a subsidiary of hemed Corp. (NYSE: CHEM).
“Over the last three years, the role of the CFO in hospice has changed dramatically, primarily due to the pandemic. From the beginning, it required a CFO to be acutely aware of all new obstacles to providing care that we were faced with and to react quickly to ensure our teams had the resources needed to continue to provide safe end-of-life care,” Fernandez told Hospice News. “The support needed to be available despite reducing volumes and escalating costs, requiring the CFO to be more attentive to forecasting cash positions than ever before, despite many uncertainties and unknowns.”
Over the last three years, the role of the CEO in hospice has changed dramatically.– Alex Fernandez, CFO, VITAS Healthcare
Since long before the pandemic, labor shortages have been the proverbial elephant in the room. But during the COVID-19 outbreak, matters worsened considerably.
This too created headaches for CFOs who had to find the resources to bolster recruitment and retention, increase wages and bonuses and pay for tools to reduce the burden on their heavily strained employees.
Among the many associated challenges was the need to enhance compensation to remain competitive without corresponding increases in reimbursement, O’Dwyer said.
Many providers also had to reinforce their teams with staff from travel nurse agencies, which also elevated their expenses. And though some organizations report some degree of improvement on the labor front, these pressures have not gone away as COVID infection rates subsided.
Coupled with inflation, these issues have put many CFOs on the hot seat.
“This has been challenging to combat and there does not seem to be an end to the shortages or increased wage requirements. It’s still a very long process to go through, and we’ve also had to utilize every role efficiently,” O’Dwyer said. “The effects of inflation have been challenging as well. CFOs have had to deal with increased expenses, particularly direct patient expenses because we’re not receiving increased revenues to offset reduced operating margins.”
In the midst of these intertwining crises, CFOs have had to change some of their priorities — with technology close to the forefront.
Throughout the hospice space, employers have increasingly relied on tech to improve efficiency. Among their objectives is the need to ensure that a smaller workforce can achieve the levels of productivity necessary to meet growing demand.
“I believe the priorities have changed out of necessity. I see closer collaboration among all members of the team to think creatively to ensure we have the resources needed to provide the essential safe, high-quality end-of-life care our patients expect and our organization commits to,” Fernandez said. “Probably one of the best examples of increased collaboration has been in quickly evaluating and adopting various technology platforms to enhance our ability to meet the increased demands of high-quality, safe end-of-life care in our communities.”