Health care governing board members confront a complex and changing financial landscape in their role as stewards of health care organizations. Hospitals and health systems have faced slim bottom lines for an extended period that have reduced available dollars to invest in organizational advancement and forced many to change strategy, forego acquisition of new technology, delay physical plant improvements, reduce services and streamline staff.
Now, implementation of health reform under the Affordable Care Act (ACA) brings new financial ambiguity and risk as health care payment and delivery fundamentally shifts from being volume-based to value-based and providers experience simultaneous and significant reimbursement cuts including extensive reductions to Medicare. Such challenges make it difficult for governing boards to reconcile their complementary roles of facilitating strategic financial investments to advance the organization while ensuring adequate financial resources to safeguard the mission.
However, savvy board members know continuing to delay investment in the organization isn’t a path to either sustainability or success. Rather, the key to ensuring the vibrant future of their health care organization is in finding new revenue streams.