10 tips to understanding practice finances

We’ve heard it before–physicians need to care about hospital finances. But how can we get busy doctors to pay attention to spreadsheets and numbers?

In a newly released white paper, “Why Should Physicians Care About Hospital Finances?” by Jonathan Burroughs, MD, MBA, FACPE, CMSL, senior consultant at The Greeley Company, offers 10 tips to help the medical staff understand the finances of a community care hospital:

1. Support all medical staff members and their leaders to become cognizant of, if not near-fluent in the arcane language of finance.
2. Go over annotated financial statements with interpretive dashboards and scorecards at MEC meetings.
3. Provide financial training to medical staff members and their leaders on an ongoing basis.
4. Demonstrate what decreasing length of stay can mean to the hospital and the medical staff in terms of decreased costs and increased reinvestment.
5. Help management to understand the clinical implications of financial decisions.
6. Help the medical staff to understand the financial implications of clinical decisions.
7. Avoid the use of financial jargon and provide interpretive annotation whenever possible to enable non–financial professionals to understand the implications of financial data.
8. Invite medical staff participation at the level of the governing board.
9. Invite both formal and informal medical staff leaders to participate with the senior management team.
10. Utilize financial and qualitative metrics when creating a medical staff recruitment and retention strategy.

One big theme is that physicians are trained to talk “doctor talk,” not numbers.

“Just as physicians have had to learn to demystify clinical jargon to patients, management, and board members, management should demystify and simplify financial jargon so everyone at the table can participate in meaningful financial discussions,” says Burroughs.

Therefore, it’s important to set up specific training for physicians interpreting financial data (tip #7).

It’s also critical to include multiple departments (tip #9); no one likes being left out.

“The discussion of whether to start a hospitalist program has financial, political, and economic repercussions that involve every aspect of the organization. Managers may demonstrate what a subsidized service might mean to the hospital’s bottom line, and physicians can help management to understand the not-so-obvious clinical and political implications as well as unintended consequences for their colleagues in non-hospital-based practices,” Burroughs says.

You can read more of the white paper at http://www.greeley.com/register/sEC87716A.

Any other tips that helped you or your clinicians understand finances? Comment below.