It is important to acknowledge that CMOs and CFOs speak different languages, have different perspectives and focus on different goals. It is absolutely critical for clinical and financial leaders to recognize and understand the pain points of their colleagues on the other side of the C-suite. The need for CMO-CFO collaboration is just as evident in the financial realm of health care organizations.

Part of this blog is based on a report by American Association for Physician Leadership® and Healthcare Financial Management Association. For the full report, “Designing the New Health Care System-The Need for CMO and CFO Collaboration” click HERE.

New payment models, such as bundled payment programs, full capitation, gain sharing and related demonstration projects, such as the Medicare Shared Savings Program (MSSP), require that financial leaders understand both the fiscal implications of implementing these models or participating in demonstration projects and the clinical implications. Without such a balanced understanding, the journey toward higher value is unlikely to be smooth.

CMO-CFO Collaboration

The need for collaboration is evident in the shift of tying physician compensation more closely to quality, performance or organizational financial metrics. It is also evident in the need for financial leaders to seek novel forms of payment for services that are not covered under traditional fee-for-service (FFS) models, such as e-visits.

CMO-CFO collaborationFinally, changes in payment, such as shared risk arrangements, can have a significant impact on the financial viability of health care organizations, unless leaders understand the most effective ways to optimize the delivery of high-quality care in a cost-efficient manner.

Conversations that bridge the gaps between clinical and financial leadership are essential. Collaboration does not magically appear overnight. It takes constant attention over a wide range of challenges.

The Institute for Healthcare Improvement posted three suggests for bridging the finance and clinical gaps.

Start From the Patient Perspective

Here are the steps that collaborative clinician-finance teams must take to successfully establish a new way of working together:

  • Acknowledge that each group of professionals has both expertise and gaps in their knowledge.
  • Begin from the point of view of a patient population and their care needs.
  • Develop a value stream map that includes both the processes and costs of care for that cohort of patients. Transparency at this step is crucial.

When executed well, this process not only develops a shared understanding of patients’ needs and costs, but builds trust and crafts a common language and work processes between clinicians and financial analysts. Clinicians can suggest care changes to improve outcomes, while analysts track proposed savings.

Another challenge affecting multiple silos within healthcare is implementing value-based payment structures. A CMO-CFO collaboration is necessary for success in implementing these newer revenue models.

Barriers Impeding Movement Toward Value

Working together for the report, CMOS and CFOS identified several barriers to the greater value from the health care system as a whole. These barriers fall into four main categories: payment and incentives; policy and organizational culture; patient- and population health-related and information technology.

  • Specific barriers to moving toward greater value include:
    • Payment and incentives
    • Lack of clear alignment of incentives across all stakeholders, including physicians, around the goal of increased value
    • Need for stronger incentives to reduce and remove waste from care delivery
    • Allocation of capital to joint ventures
  • Policy and organizational culture
    • Lack of agreement about and understanding of value in health care across all stakeholders
    • Lack of a solid, broadly accepted national voice in health care
    • Lack of a national strategy for moving toward value
    • Poor wording of certain government regulations and certification requirements, which adds waste to the system
    • Organizational culture that hinders collaboration between providers such as hospitals and payers
    • Culture that undermines the will to try new models and practices without a guarantee of success
    • Lack of willingness of some payers to join in value-based payment programs
    • Excess administrative burdens of care delivery and associated costs (e.g., funds spent to prepare for a CMS surveyor inspection; the costs associated with claim creation, submission and resolution)
  • Patient-related and population-health related
    • Lack of understanding about patient accountability and the degree to which patients are responsible for their health outcomes
    • Lack of benefit plans designed to engage patients in their care and encourage shared decision-making
    • Lack of effective tools to improve population health and ultimately improve value
    • Lack of understanding of the many determinants of population health and of effective mechanisms for improving population health (e.g., an understanding of the data and tools needed to impact the desired downstream health outcomes, such as reducing obesity)
    • The expectation among some patients that “more care is better care”
  • Technology-related
    • Need for IT infrastructure that can provide timely, actionable data and decision support tools
    • Lack of inter-operability of IT systems and costs associated with IT
    • Failure to use technology to encourage evidence-based medicine

Acknowledging and gaining a shared understanding of these possible barriers is essential to moving ahead in the journey toward value. By anticipating these blocks, then proactively addressing them, clinical and financial leaders can help smooth the potentially bumpy journey as their organization shifts from optimizing volume to delivering greater value.

A Joint Report from the American Association for Physician Leadership® and Healthcare Financial Management Association