Finances and accounting are often viewed as dry, black-and-white, stringently objective pursuits. In a corporate setting, their practitioners are often characterized as the people who say no. But one of Vincent Tammaro’s mentors taught him several valuable lessons: One, financial matters aren’t always black and white. Two, it’s just as important to have solutions as it is to be able to identify the issues. And three, there is no cookie-cutter approach to most situations.
Tammaro has never forgotten those lessons and has applied them in a variety of ways as chief financial officer at Yale New Haven Health.
Finance’s Place in the Healthcare Landscape
At a time when health plans have placed more and more responsibilities on patients for deductibles and copays, one of his major priorities has been bringing Yale New Haven’s patient-centered focus to the financial office’s interactions with patients and their families. To improve what he calls the “finance-patient experience,” Tammaro cites the implementation of the Epic electronic health information system, which was initiated in 2010 and substantially completed in 2013. Epic has enabled the organization’s staff to do a great deal of front-end, proactive work to ensure patients understand what their insurance covers, as well as the financial and medical options that can enable them to plan more effectively and make fully informed decisions.
“By using the Epic system, we can be more proactive and gather the necessary clinical and insurance documentation before a procedure instead of trying to catch up after,” Tammaro explains. “We can alert patients ahead of time about what costs they’ll be responsible for so they’re not surprised. It improves our interactions and gets them more engaged. Our point of service collection has gone up dramatically, and our revenue cycle has improved overall.”
Rising Healthcare Costs for Individuals
Recent industry trends have resulted in shifting a greater financial burden onto consumers, which has made the organization more sensitive to pricing. And because Yale New Haven Health is an academic medical center, its cost for services can be higher than some other facilities. With that in mind, Tammaro believes that, especially when patients have decided to go through with treatment at Yale New Haven Health, the organization’s proactive, patient-centered approach to finances is critical.
“If patients aren’t aware of the financial details up front and they have to have negative conversations with the business office, we run the risk of undoing a positive patient experience provided by our incredible clinical and operational teams,” he says. “As one of the last opportunities to influence the impression of patients and their families have of us, billing and finance is in a unique situation.”
Leaders trained all 1,600 of the organization’s business office staff members on Epic. That comprehensive instruction taught them how to understand and accommodate every patient’s story. That means responding to 3.5 million unique individuals each year. Staff members often have to determine if patients are eligible for certain charity resources that can help subsidize their care or free drug programs that the hospital works with to provide more than $5 million in medications annually.
Always Thinking About Patients
In one pediatric instance, an insurer would not approve an expensive new drug. But the business office staff handling the case spent three days gathering documentation to build the case for the importance of that specific treatment. Because of their extensive training and knowledge of how to coordinate with clinicians, they were able to change the insurer’s decision.
Tammaro begins his leadership and management meeting with patient stories as a reminder of the organization’s vision, mission, and values and how they directly impact patients and the clinical staff.
“Understanding core success factors from a statistical or numeric perspective is important, but I want to guard against our becoming numb to the numbers on a page,” Tammaro says. “Unless we’re patients ourselves, corporate services such as finance don’t typically have direct contact with the services we provide. But hearing about real outcomes with real patients reminds us of our purpose and why we all work here.”
In one such example, a nineteen year old with an apparent neurological brain disorder and exhausted parents who had no other avenues to turn to for help landed them at one of Yale New Haven Health’s emergency departments. Although the hospital was not the appropriate setting for this treatment and would most likely never be able to recoup costs for the services it provided, clinicians and the business office committed to keeping the patient until the appropriate resources and social services could be arranged.
“This is a common situation for us,” Tammaro says. “We know the economics aren’t aligned, but it’s the right thing to do.”
Improving Care While Saving Money
To help balance the economics and to enable Yale New Haven to continue to provide such care, Tammaro is involved in numerous cost-saving and efficiency efforts. For years, his teams have led consolidation initiatives that have integrated finance departments throughout the system to bring about economies of scope and scale. This has also enabled consistent processes and performance system-wide in areas such as scheduling, billing, and collections.
As sources of funding and reimbursement continue to shift and evolve, Tammaro’s team reflects on the dynamic risk profile of the health system while overseeing Yale New Haven Health’s enterprise-wide risk assessment process. Each year, his team works with operations and clinical areas to identify inherent risks in the organization’s strategic plan; they then develop mitigation strategies. Yale New Haven Health also leverages the assessment to design its internal audit and compliance plan. This serves to provide assurance over mitigation plans.
The finance team also works closely with operations, clinicians, and other corporate areas to streamline costs. The team streamlines costs by identifying pricing advantages for supplier contracts, reducing overutilization of services, and looking for other opportunities and collaborations that can tie in with the institution’s transition to value-based payer arrangements. As a result, they have successfully eliminated approximately $390 million in expenses. That is about 10 percent of Yale New Haven Health’s cost structure.
When he looks back on his first experience in healthcare—an internship at New Rochelle Hospital—Tammaro still feels the impact of seeing firsthand how important the facility was to the community. He remembers that and the lessons learned from his mentor on a daily basis.
“My work has to be data-driven. But its value depends on what you do with the information and how you share it,” he says. “Sometimes it’s actually not about the numbers at all, but the relationships and the people that make them meaningful.”
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