How to Improve Financial Stewardship in Hospital Leaders

How to Improve Financial Stewardship in Hospital Leaders

A financial stewardship program has delivered more than a quarter billion in savings and revenue, enabling a children’s hospital to enhance patient outcomes.

Like most leaders in pediatric health care, Charleeda Redman understands the challenge.

How can a children’s hospital maintain its focus on fiscal concerns when its bottom line is ensuring optimal outcomes for the children in its care?

“Part of what we're trying to do is focus our language so that rather than working toward a return on investment, it’s the return on our mission,” says Redman, RN, M.S.N., ACM, FAACM, vice president of strategy integration at Children's Hospital of Philadelphia (CHOP). “Individuals in pediatrics are really not thinking about the bottom line per se, but in order to continue investing in delivering quality health care for our patients and families as well as delivering innovative research, we need to have some financial stewardship.”

For CHOP, it was a financial stewardship program launched in 2017 to better weather the economic headwinds that were gathering on the horizon. The program’s aim is to help the organization’s leaders better understand finances, standardize ways to explore growth, monitor financial performance and drive financial improvements. It’s built on a four-pillar foundation:

  • Lead. By developing a baseline financial acumen in hospital leadership through a coordinated educational platform, the organization can foster a culture change toward shared financial stewardship.
  • Perform. Measuring progress against financial goals through monthly operational reviews and management reporting.
  • Grow. Anticipating and supporting future growth across the organization. “It's one of the levers we are pulling to get individuals to think more like an enterprise rather than siloed areas,” Redman says. “Financial stewardship is absolutely a way to bring people together.”
  • Improve. In addition to implementing programs based on learnings from the other three elements, this includes uncovering places in everyone’s daily work to increase revenue, reduce costs and enhance productivity and efficiency.

Since its inception, the program has accounted for more than $300 million in cost savings and revenue generation—although Redman and her team are not resting on their laurels.

“Overall, when we look at the program and the $324 million of improvements, we've done a great job—but we have a lot of opportunities remaining,” Redman says. “We're trying to focus our efforts by educating around how to look at productivity and how to make work more efficient—with the labor market today, that’s an integral area for all of us to focus on.”

Examples of financial educational courses

The education platform for improving financial acumen was developed by the Field Finance Team and is delivered in a classroom-style setting. It is hosted within CHOP’s learning management system, enabling the team to track its completion across the organization. “We’re being more intentional in building and sustaining that acumen by holding people accountable for ensuring that the leaders in their respective areas are up-to-date—and addressing where there may be some gaps,” Redman says. Here are a few of the courses leaders take.

Intro to finance
To effectively manage revenue and expenses in health care operations, personnel must understand and be comfortable with financial information and the factors that impact health care economics. This course reviews basic financial concepts and provides examples of practical applications in the workplace.

Budgeting 101
This class is designed for budget managers and leaders that will benefit from having a general understanding of how the budgeting process works at CHOP. Topics covered in this class include the budget timeline, review of the budget module in Strata, the long‐range plan, fixed budgeting and key budget terms.

Labor productivity
This class covers labor productivity concepts, Hours Per Patient Day and Worked Hour Per Unit of Service walkthroughs, introduction to PROSPECT data and a demo of the labor productivity dashboard in Strata.

Variance reporting
This class covers key concepts in variance analysis reporting, how to enter variances in Strata, taking deep dives into finance data to understand drivers, productivity analyses and an overview of inter‐entity funding.

The importance of leadership buy-in

Redman says the success of CHOP’s financial stewardship program relies on unwavering support from hospital leadership, which sets the tone for the organization-wide culture that drives ongoing improvements in fiscal responsibility.

“When people come here, they stay for a long time because they're committed to a mission—they're committed to advancing the health and welfare of pediatric patients,” Redman says. “When you start at the top to ensure everyone is equipped with the proper level of financial acumen, you’re building the culture and walking the walk—not just talking the talk.”

Read the Latest Issue of Children's Hospitals Today

Spring 2024 Children's Hospitals Today

Don't miss the latest industry news, insights and ideas.