The CFO dashboard: Healthcare leaders target the metrics that matter most

Bert Zimmerli, Executive Vice-President/CFO of Intermountain Healthcare

Whether running the financial operations for a single hospital, a physician's network or a large, integrated health system, the sheer number of metrics finance managers have to keep track of can be daunting.

But while a close eye on numbers can keep chief financial officers ahead of potential problems, there's also the risk of losing focus when you stare too intently at the analytics.

We spoke to two financial leaders about the metrics they follow, their ideal analytics dashboard and how they interpret data to make decisions for their systems.

Christopher Lah, Cincinnati Children's Hospital

"For every step of the rev cycle, there needs to be one power metric associated with it," said Christopher Lah, Revenue Cycle Senior Director at Cincinnati Children's Hospital.

For Lah, his idea of the perfect financial metrics dashboard is one that is specific and very detailed. Lah's ideal dashboard would visually layout each of the 10 steps of his revenue process. While every model is different, he said, at Cincinnati Children's the front end of the revenue cycle includes scheduling/registration(nicknamed "schedistration"), utilization review, coding and charge entry. On the back end, steps include billing, account follow-up, cash posting, customer service and reporting/feedback.

For each of those 10 steps, he looks at an efficiency/accuracy metric gauging the success at each step of the revenue cycle. "It is a smorgasboard. Every company's got something different. It depends on what your strategic objective is," said Lah.

Each metric tells a story, Lah said.

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Utilization review efficiency describes their ability to get insurance authorizations for services that have been or will be provided. It lets them know whether they did the paperwork right.

Coding/charge entry efficiency, or lack thereof, tells Lah whether they are making sure that documentation and charge match each other when they go into the system.

Billing joins the front and back end of the revenue cycle. Lah said gauging efficiency here helps make sure nothing is in the "tank file", and forecasts how fast you get billing out, and how fast you turn around exceptions.

Account follow-up efficiency metrics are also highly important because someone has to watch to make sure bills clear and get paid.

Financial advocacy can show up anywhere in the revenue cycle, and best practices can vary. Cash posting is kind of a moving target too, Lah explained. It happens at the beginning of the revenue cycle, but it also happens at the middle and at the very end of the revenue cycle too.

Customer service indicators track patient experience, including speed of service, said Lah.

While that may seem like a busy dashboard, Lah says it's all about keeping tabs on the overall operation, and making sure the business is running smoothly.

"A dashboard report is there to give me the vitals on my entire revenue cycle. So if my efficiency indicators look good at each step I move on because I have other work to do. The minute one of the indicators doesn't look right, either in relationship to the rest of the report or benchmarking it against itself, I'm going to drill down and ask more questions about what's going on," said Lah.

Finally, at the top of his dashboard are the three indicators Lah said are at the top of any revenue cycle report. First is the amount of cash you're collecting compared to each year versus your projection and total revenue and collections. "That's the heart and soul of your engine," Lah said.

The second is the cost-to-collect, and last is patient satisfaction. He says all of the metrics stemming from the steps in the revenue cycle "drill up" to these main three vitals that show the real health of an organization.

"Everything needs to feed into how your revenue and cash are performing, how effective you are in collections, and how your customers feel about you in that process. Because the last one is really your future."

Bert Zimmerli, Executive Vice-President/CFO of Intermountain

"It's a very honest answer. What metrics do I look at on a daily basis? I thought a lot about this and I don't look at any metrics on a daily basis," said Bert Zimmerli, CFO at Utah-based Intermountain Healthcare.

Zimmerli said they coined the phrase a few years ago that "Intermountain is a forever organization. We don't have an exit strategy."

"My main job is making sure this organization is financially sound and stable and so I'm looking at long-term indicators of that," said Zimmerli.

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But when you're the CFO of one of the highest rated financial organizations in healthcare in the United States, nonprofit or for-profit, you've got to be keeping your eye on something. Zimmerli said that's where those few long-term indicators come in.

On the financial side, he said they look at what is their debt-to-equity ratio. The goal is to stay below 30 percent long term. A second indicator, "days of cash," is unique to the nonprofit world and measures the amount of cushion in the financial operation. Zimmerli reported that as of the end of January, Intermountain had 320 days of cash on hand with the possibility of slight fluctuation afterward.

Zimmerli also said some indicators that they use to gauge the health and success of the organization aren't financial. Indicators and goals spelled out by the board of trustees fall into six important categories, and change depending on best practices and other influences: clinical board goals, physician alignment engagement goals, employee engagement goals, operational goals, community goals and service excellence.

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"I happen to think it's something that's really enabled Intermountain to do what we've done. People take this very, very seriously and the board holds us accountable for that," said Zimmerli.

Even so, Zimmerli's bottom line, and everyday focus, centers more on the big picture. He said, in his role there aren't a lot of things he looks at on daily basis that would spurn changes in what he does. He explained there is a danger to getting too caught up in numbers, and for him, the real danger is looking at any one number and drawing a conclusion without looking at other things.

"Don't get me wrong we are an evidence-driven organization. So you do have to have metrics. You can't run things on gut feel. But on a daily basis, there's not too many things I would look at and make a course correction," Zimmerli said.

Twitter: @BethJSanborn