Warren E. Beck recently joined Crowe as the firm’s healthcare advisory services leader. Beck comes to Crowe from the Cardiovascular Care Group in Nashville, Tennessee, where he served as CEO. He also worked for more than 25 years in various roles at Vanderbilt University Medical Center, including as the academic medical center’s CFO from 2009 to 2013. Brian Sanderson, managing principal of the Crowe healthcare services group, sat down with Beck to talk about some of the major challenges facing healthcare providers today, his thoughts on how to address them, and his plans for the healthcare advisory services group.
Q: Tell me about your time working at Vanderbilt. Can you share a career highlight or two?
A: I started working at Vanderbilt in November 1988. I became CFO for the clinical enterprise in 1995 and then CFO for the entire medical center in 2009. One particular highlight that comes to mind was participating in a collaborative organizational redesign project with a multidisciplinary group of physicians and nurses from across the medical center. Our role was to identify best practice behaviors and processes from other industries outside healthcare and develop proposals for consideration and implementation at Vanderbilt. This project was a terrific opportunity for team members to visit successful companies in order to better understand their approach to customer service, employee education, and work processes. Our team identified 10 initiatives that later were used to redesign our approach to providing healthcare. These initiatives are still in place today, and they helped earn Vanderbilt recognition on U.S. News & World Report’s Best Hospitals Honor Roll in 2008 and 2009.
Another highlight for me was the respect and friendship I earned from my peers, superiors, and others whom I supported. Early in my healthcare career, I witnessed the conflict that frequently exists between finance and operations. With the ever-changing landscape of reimbursement and government regulations, and the industry’s competitive environment, my approach to finance was to work with operations and to make decisions based on what was best for our patients and staff.
Q: What unique challenges do academic medical centers (AMCs) face, and what can other healthcare providers learn from how AMCs address those challenges?
A: Academic medical centers have a three-part mission: doing research, educating students and training residents, and providing patient care. All three parts are highly dependent on funds from the federal government, which subjects AMCs to continual budgetary reduction. In addition, two of those missions – education and training along with research – tend to lose money. As such, it is necessary for AMCs to develop strong lobbying capability in Washington, make substantial profits from patient care to subsidize their unprofitable missions, and raise significant revenue from philanthropy.
Academic medical centers have learned to do things differently to increase profits from patient care. They have created new clinical tracts for faculty that de-emphasize research and training to focus solely on clinical care and that allow for easier patient access. AMCs have developed affiliations with community groups to bring academic expertise to patients in a lower-cost environment. They have improved their customer service approach and taken a lead role in standardizing medical care and ensuring high quality. Last, AMCs have embraced the concept of bundled payments and, through integration, are active participants in this initiative. Other sectors of the healthcare industry would be wise to use a similar approach, including moving toward quality initiatives and away from pay-for-volume reimbursement.
Q: What initiatives are you planning to undertake as the Crowe healthcare advisory services leader?
A: Many providers in the healthcare industry view Crowe as a technology firm and may not yet know about the firm’s advisory services. A lot of this perception is a result of the huge success of the firm’s revenue cycle analytics, unclaimed property technology, and credit balance technology solutions. I plan to create more awareness about Crowe capabilities and service offerings. My focus areas will include litigation support, forensics, investigations, due diligence, mergers and acquisitions, and integration. I also am working to develop a new solution to help hospitals and physicians quantify and optimize at-risk payments, and I would like to increase our capabilities in general financial support and healthcare operations consulting. I had a long-term client relationship with Crowe before joining the firm, and I was impressed with its level of professionalism and client service. I look forward to building on that success.
Q: Given the many challenges facing healthcare providers today, what do you think their top priorities should be?
A: Healthcare providers do indeed face numerous challenges. Just a few of those challenges include:
- Shrinking margins with the continuous downward pressure on payment
- Uncertainties concerning how changes to the Affordable Care Act will affect the uninsured
- Decreased inpatient volume as services transition to the outpatient setting with much lower payment rates per patient encounter
- Increased pressure to maintain high patient satisfaction scores and demonstrate continuous high quality on publicly reported data sets
Healthcare providers cannot rely on cost cutting as their only strategy to achieve prosperity because it’s too difficult to sustain such cuts. Instead, healthcare providers need to develop strategies to generate and retain the margin for existing services and to generate incremental margin. Focusing on revenue cycle performance and realizable net revenue should be a top priority. When I go into any organization, my very first question is, “What do you think about your revenue cycle?” And if the organization doesn’t think highly of it, I know Crowe can help.