Healthcare financial leaders will encounter a myriad of challenges and improvement opportunities in 2016. 2016 will force health system financial leadership to focus and prioritize, with challenges including increased healthcare spending, continued momentum toward value-based care, and the need to reexamine the revenue cycle after years of focusing so intently on ICD-10. But 2016’s financial healthcare trends include more than just challenges; exciting opportunities abound, from using technology to engage patients to a national focus on population health. Engaged healthcare financial leaders—particularly those with the characteristics of effective leaders (resilient, collaborative, and inspirational)—are positioned to stay ahead of the curve in 2016.

1. Top 7 Financial Healthcare Trends
and Challenges for 2016 – Bobbi Brown

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Common Leadership Traits
On a recent “Face the Nation,”
episode there was a panel
discussion about former
presidents who were skilled at
helping their country overcome
challenges in the 21st century.
The discussion noted traits,
common to effective leaders:
• Resilient
• Inspiring
• Collaborative
• Great communicators

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Healthcare Financial Trends for 2016
Those same attributes, paired with an
in-depth understanding of financial
healthcare trends, will help financial
leaders overcome challenges and
make improvements in 2016.
What follows are seven financial
healthcare trends for 2016, including
action-oriented strategies that will
help healthcare financial leaders stay
ahead of the curve.

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More Data Sharing
As health systems improve their
analytics capabilities and the
quality of their healthcare data,
sharing it with clinicians will
become increasingly important.
Sharing data has a proven impact
on accountability, productivity,
care quality, and innovation.
Lead the way:
Financial
Trends
For 2016
1
Share data with your clinicians: Stop hoarding data. Stop
waiting for perfect data. Share data with your clinicians often.

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Continued shift from volume-
based care to value-based care
CMS announced its goal: by
2018, 50% of fee-for-service
payments will move to alternative
payment models, such as
bundled payments and
accountable care organizations.
CMS also issued final regulations
for joint replacement (published
November 2015), starting the
mandatory movement to bundled
Medicare payments in 67
metropolitan areas.
Financial
Trends
For 2016
2

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Continued shift from volume-
based care to value-based care
Financial
Trends
For 2016
2

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Continued shift from volume-
based care to value-based care
Lead the way:
Financial
Trends
For 2016
2
Understand clinical measures: healthcare
financial leaders need to get a handle on clinical
quality and how much it costs to achieve a unit of
healthcare outcome and quality.
Develop cost systems to quantify your margins:
develop new, automated systems that show costs
for activities across all sectors
Create your risk vision: we’ve been under various
CMS quality programs for years. If you aren’t
improving yet, then you need to prioritize helping
your teams improve.

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We’ve recently seen three large insurance mergers:
According to a recent Health Affairs blog, Georgia,
Connecticut, and Colorado could experience a 40 percent
or more commercial insurance concentration.
Industry consolidation
(and alternative delivery models)
Financial
Trends
For 2016
3

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Industry consolidation
(and alternative delivery models)
We’re also seeing a spike in alternative
delivery models, including retail space.
In October 2015, Walgreens announced
they were acquiring Rite Aid to broaden
their expanse into retail health.
Both Walgreens and Rite Aid are very
active in the walk-in health clinic business.
Lead the way:
Financial
Trends
For 2016
3
Update your marketing/contracting plan: determine what consolidation
means for your contracting strategy. Assess what you’ve lost to the retail
movement. Have you seen a decrease in urgent care and physician office
visits? Decide if it’s a market you should compete in.

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Population health is a top priority
Population health is the recurring
theme in a recent interview of
healthcare leaders from the 21
winning Healthcare IT News’ 2015
Best Hospital IT Departments.
Fort HealthCare’s Senior Director of IT
effectively summarized the increasing
prioritization of population health:
Financial
Trends
For 2016
4
Population health is 100 times bigger and the road isn’t
yet paved; it isn’t just about the data or the tools used by
clinicians, it really is about changing the way healthcare
organizations think about practicing medicine.”

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Population health is a top priority
Lead the way:
Financial
Trends
For 2016
4
Get comfortable with blurred lines: provider and payer
roles will become less obvious, and we’ll continue to rely
less on four-walled structures.
Learn the new terminology: Are you familiar with Return
on Engagement? In a PMPM capitated environment, you
must budget time and resources for all patients.
Know how to treat a population: and take risk for that
population. Load claims data and analyzing physician,
diagnosis codes, and treatment pattern data.

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Population health is a top priority
Lead the way:
Financial
Trends
For 2016
4
Learn new measurements: with 23.5 ACO and 7.8 million
Medicare ACO patients, you must know your population to
define how to measure success.
Collaborate to improve the care continuum: identify
partner organizations and stakeholders you’ll need to
collaborate with to achieve a broader definition of care.
Study patient flow: start by identifying the bottlenecks at
your hospital or clinic. Use data to study patient movement
and focus on improving the admission/discharge process.

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Engaging patients through
technology
Using technology to engage patients
will be a focal point of patient
engagement conversations in 2016.
Half of patients hospitalized in the
last year started using wearable
technology after their hospital stay.
Lead the way:
Financial
Trends
For 2016
5
Understand how different patient segments use
technology: technology is not a one-size-fits-all solution.
Understand how different patient segments use technology.
Attend the International Consumer Electronics Show:
CES is a global consumer electronics tradeshow that takes
place every January in Las Vegas.

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Revive the analytics around
revenue cycle
The first month of CMS claims
processing didn’t show any huge
spikes in denials.
Now that ICD-10 is in place, we
need to revive the analytics
around revenue cycle.
Lead the way:
Financial
Trends
For 2016
6
Put the right analytics tools in place: Don’t get too comfortable
in that false state of tranquility based on high-level metrics. Make
sure cash is still flowing at the same rate. Implement frequent
reporting so you can quickly and efficiently identify trend

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Increased healthcare spending
Healthcare spending increased by
5.3% in 2014—a significant
increase compared to previous
years, when it was closer to 2.5%.
We’re spending $9,523 per person
for healthcare. To contain increases
we must be vigilant about costs.
Lead the way:
Financial
Trends
For 2016
7
Take a leadership role in reducing waste, overtreatments, and
unnecessary variation: you can’t tackle everything at once. Work
with clinicians to do the right thing for your patients/members.

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2016: The Year of the Consumer
Healthcare spending increased by
5.3% in 2014—a significant
increase compared to previous
years, when it was closer to 2.5%.
We’re spending $9,523 per
person for healthcare.
To contain these increases we
must be vigilant about costs.
Lead the way:
Take a leadership role in reducing waste, overtreatments, and
unnecessary variation: you can’t tackle everything at once. Work
with clinicians to do the right thing for your patients/members.

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Link to original article for a more in-depth discussion.
Top 7 Financial Healthcare Trends and Challenges for 2016

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For more information:

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Bobbi Brown is the Vice President of Financial Engagement for Health Catalyst. Ms.
Brown started her healthcare career at Intermountain Healthcare supporting clinical
integration efforts before moving to Sutter Health and, later, Kaiser Permanente,
where she served as Vice President of Financial Planning and Performance. Ms.
Brown holds an MBA from the Thunderbird School of Global Management as well as
a BA in Spanish and Education from Misericordia University. She regularly writes and
teaches on finance-related healthcare topics.
Other Clinical Quality Improvement Resources
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