Finance challenges in a changing healthcare environment

Medical News recently spoke with local healthcare finance experts to learn about the challenges they face in the changing healthcare environment in Kentucky. The executives were Holly Hodge, Chief Financial Officer and vice president of Finance at Bluegrass Care Navigators, Adam Shewmaker, director of Healthcare Consulting Services at Dean Dorton, and Dale Skaggs, director at Blue & Co. Below are the highlights.

Medical News: What trends are you seeing in healthcare, as it relates to finance, costs and revenue?


Holly Hodge

Chief Financial Officer/Vice President of Finance

Bluegrass Care Navigators


As the move towards value accelerates, the development of new value-based reimbursement methods grows. Payers and providers continue to be more willing to discuss collaborative opportunities for new services and reimbursement methodologies which bring benefits to all parties involved.

As these are often new arrangements, the background processes aren’t always in place to generate prompt reimbursement. This can lead to frustration for providers if services are being provided but reimbursement is not being received.


Adam Shewmaker

Director of Healthcare Consulting Services

Dean Dorton


Downward pressures on reimbursement for hospitals and physicians are a significant trend in the marketplace. The transition from fee-for-service to quality-based reimbursement has impacted many providers, both positively and negatively throughout the nation.

The Medicare Access and CHIP Reauthorization Act (MACRA) was one of the most significant changes to Medicare reimbursement ever and physicians are adapting to the new revenue impacts.

Additionally, the cost of electronic health records and malpractice insurance have forced organizations to seek new avenues for cost savings, including outsourcing some support functions, such as accounting, billing and credentialing, that were once completed internally.

Although it seems that the rate of acquisitions has slowed some, most community hospitals and independent physicians have sought affiliations and partnerships to help shoulder the burden of population health management while providing coordinated medical care across the full continuum.


Dale Skaggs


Blue & Co.


The financial influences on health systems during the implementation of a new EHR implementation or conversion are significant. These influences are typically felt the most over a three-year period (planning and implementation). The EHR has additional costs that are greater than just the cost of the EHR itself.

The implementation also affects organizations financially due to the increase in staff needed to support the EHR transition, duplicate costs of older systems as they are taken off-line, the reduction in provider productivity in both hospitals and medical group operations and the revenue cycle learning curve.

Health systems will face these challenges when moving out of the implementation phase and back into providing healthcare service phase.


Medical News: What deal or transaction (Kentucky or elsewhere) do you find most interesting? Why?

Holly Hodge, Bluegrass Care Navigators

The evolution of Haven (Amazon’s not-for-profit joint healthcare venture with JP Morgan Chase and Berkshire Hathaway) led by Dr. Atul Gawande is quite interesting. Haven’s initial goal is to lower healthcare costs and create better outcomes and greater satisfaction for their U.S. employees and families. Long term, the plan is to share their solutions to help others.

Dr. Gawande is known for being a visionary in healthcare and this organization has the potential to significantly change the current healthcare system as we know it as well as provide opportunities for healthcare providers in Kentucky to play a role in this evolution.

Adam Shewmaker, Dean Dorton

We’re seeing more physician practices forming super groups as an alternative to hospital employment. Specialties such as gastroenterology, dermatology and pediatrics have successfully developed these models and maintained their autonomy. Some of their management and administrative functions can be centralized which provides some cost sharing amongst multiple physicians.

As hospitals monitor their costs and quality outcomes, I would suspect that some physicians who are currently employed by hospitals and health systems will explore these types of arrangements in the future.


Medical News: What keeps you up at night? What can Kentucky do to create a better healthcare environment?

Holly Hodge, Bluegrass Care Navigators

Option 1: Being reimbursed for services provided is always a challenge and concern especially when it comes to new services and arrangements. While typically not causing an interruption of care, slow to arrive payments may put a financial burden on providers who must continue operationally while waiting for reimbursement. Putting processes in place to hold payers responsible for alleviating issues that prevent providers from successfully submitting claims could create a better environment.

Option 2: Kentucky ranks as one of the top 10 states for hospital readmissions for Medicare enrollees within 30 days of a discharge. Because readmission reduction program penalties assign a dollar value to each readmission, healthcare vendors willing to structure part of their contract on performance can differentiate themselves while helping their hospital partners. Developing alternatives in service delivery can provide opportunities that benefit all involved.

Adam Shewmaker, Dean Dorton

As an advisory services firm, we get to consult with our clients on an ongoing basis regarding the nature of their risks, weaknesses and opportunities. It’s one of the most rewarding aspects of what we do, but also can be the most difficult in that we have to stay abreast of key changes associated with multiple aspects of the industry.

From cybersecurity attacks and managing compliance to implementing process improvements, it takes a team approach and holistic view of a client organization to better serve them and provide value.

Any blind spots a client might have relative to change or potential negative impacts are a constant reminder of how we need to prepare ourselves with the right talent, service, and skill sets that our clients need.

Dale Skaggs, Blue & Co.

Certainly, the opioid crisis has had an impact on our clients. As Blue & Co. helps our hospital clients with their Community Health Needs Assessments (CHNA), we are often seeing that the opioid crisis is creating a need to implement additional education and awareness programs for their communities and healthcare providers, as well as looking for new and creative ways to increase substance abuse prevention in the communities they serve.

We are helping our clients with developing unique strategies to reduce and manage the opioid epidemic in the communities they serve.


Medical News: Are there trends outside the healthcare industry that you would like to see applied to healthcare companies?

Holly Hodge, Bluegrass Care Navigators

Focus on creating a positive patient experience, equivalent to the customer experience in other industries, has been growing over the last few years and while some in the healthcare industry have made this a key focus area there is opportunity for growth.

As more healthcare consumers have high deductible health plans and as out-of-pocket costs continue to grow, providing an excellent patient experience becomes an important factor that consumers consider when making healthcare decisions.

The challenge with healthcare is often the regulatory environment with requirements that must be met in each encounter regardless of whether they add value to the patient experience or not. Current reforms which focus on reducing and streamlining administrative burden may allow a shift of more resources to focus on the mission of direct patient care.

Adam Shewmaker, Dean Dorton

We’ve seen how technology companies have mastered data analytics and business intelligence to influence consumers and drive behaviors. Healthcare is starting to do much of what has been done already in other areas, such as retail and entertainment, which is to more closely connect the consumer with the overall experience.

Services such as online payment pay and access to electronic health records and test results can provide a much more user-friendly experience in the healthcare arena than in years past.

Hospitals and physicians that can improve the customer (patient) experience can be a differentiator in the marketplace and positively impact revenue with some of the new reimbursement models. Healthcare entities that can successfully understand and manage their data will be better able to connect with their customers and affiliates.