Providing care for the poorest Alabama communities puts DCH Health System in a tougher financial position than its peers, resulting in the need for unique investments.
As healthcare providers continue to deal with the ongoing economic challenges caused by the pandemic, labor issues, inflation, expenses, and more, CFOs leading the financial initiatives for these organizations must reevaluate how they invest in order to make the best decisions for the hospital’s well-being as well as the patients—especially when those patients are some of the poorest members of the community.
That is the case at DCH Health System, a Tuscaloosa, Alabama-based healthcare provider with about $560 million in annual revenue. The organization's CFO Nina Dusang says it can be challenging to find the right balance when investing in the organization’s technology while making sure the community of patients has the most high-quality care available.
Dusang recently connected with HealthLeaders to discuss hospital spending, tech investments, and patient care.
HealthLeaders: Tell me about DCH Health System and its mission.
Nina Dusang: DCH Health System is comprised of three acute care facilities, a long-term care facility, and some employed physician practices, as well as a few other peripheral joint ventures. DCH is a mid-sized health system; our two largest facilities are in Tuscaloosa, Alabama. We are designated as a sole community hospital, and what that means is we are the caretakers for our community. We care for not only Tuscaloosa County but for about 11 counties that surround us. Those counties are some of the poorest counties in Alabama. People can get fooled by seeing the University of Alabama here in Tuscaloosa, and they think that we must be a rich health system with lots of commercial payers, but we are not. We serve the poorest in Alabama and our payer mix reflects that as do our financials.
With our payer mix, it is a struggle to provide all the care our community needs but we are the [only] care for our community, so it is not an option to only pursue services that are considered profitable. We have tertiary care facilities. We provide trauma care. We do pretty much everything except burns, transplants, and specialty children's care. We are the hub and spoke here for this community. We're considered an authority, which is a public hospital designation in Alabama. We are not owned directly by the city proper or the county, but we are owned by the citizens as a whole. With that comes an awesome responsibility. We take our mission very seriously to provide the best health care that this community can have and to improve the health and access to care of our underserved communities.
HealthLeaders: How do your financial challenges differ from other health systems?
Dusang: What differs is the fact that we don't have competitors. We accept all patients, and we do that everywhere for any kind of care that is needed. Our owned physician clinics, as well, follow our charity care policy, and we take 100% of all payers and all patients including uninsured patients across the system. We also have one of the lowest wage indexes in the country. Blue Cross of Alabama is one of the lowest, if not the lowest, paying Blue Cross plans in the country. So, we start from behind the eight ball, to begin with, before we even consider the fact that we serve the poorest counties in Alabama.
Financially, we are starting out from a negative position and trying to claw our way out so that we can make sure we serve our community. For us, it's about being stewards of our community's money. So, looking at the entire image is extraordinarily important. We don't believe we can cut our way to prosperity when I say that at all. But we do believe rigorous good business practices and cost containment are of utmost importance, while we try to find pockets of profitable business. However, cost is something we will always have to focus on.
HealthLeaders: How is DCH making cost a priority?
Dusang: To the point of efficiency and driving costs down, the real next horizon for everybody is not pricing. We've all done that with GPOs. We’re constantly looking at pricing, but you're not going to be able to cut your way out of something. The biggest thing right now that we have to have is efficiency in terms of cost; in other words—utilization. Utilization comes in many forms. You could have too high of a length of stay; the patient is just staying longer than they clinically need to and so has added cost on the tail end of the stay that is unnecessary. It could be over-ordering of tests. It could be added cost by using an IV medicine instead of a by-mouth medicine that is cheaper, but it's the exact same medicine. And I have had these discussions with physicians. I've had several physicians in particular talk to me to say 'Hey, I want to participate in helping the organization be sustainable. But I have no clue how to do it. If you told me that the other medicine was cheaper than the IV medicine if I agreed that both of those had the same clinical efficacy. I would of course choose the lower price, but I have no way to know that.' That was the focus of a lot of the discussions we were having. How do we deal with utilization when our clinicians, especially providers, don't know the cost of care? And that's where Illumicare came in.
HealthLeaders: What is Illumicare and why did DCH decide to invest in this tool?
Dusang: Through this technology—this app—we’re providing physicians with the data they need. We're going to take our cost data, in particular, our pharmacy and lab costs, and provide clinicians with concrete costs that they can pull in and marry up with the medical orders. When a physician would go to order an IV medicine, there would be a pop-up that says the medicine costs—I’m making this up—$50 a bag, whereas the PO medicine, if appropriate for the patient, is only $3 a tablet. But if the clinician doesn’t feel the PO medicine is appropriate, they can cancel out and go with the IV medicine.
What was so intriguing about this is the idea that we could nudge providers with the information they've actually been wanting for a while that we've never had a way to provide before in real-time. We could always sit with somebody after the fact three months later and say 'here’s what you need to change going forward.' But that kind of retrospective review is just not helpful. It doesn't stay in their mind as they're doing their day-to-day work. Nudging them while they work is one of the most effective things an organization can do.
The other thing technologies like this do is that they are visually more like everyday apps, which makes them much easier to implement. Today's training in the new technology is much faster than it ever was. In the past, we would be in classrooms for days, training them on point-and-click tools. Now it's pretty intuitive if you know how to use your phone. That's the other advantage of the new technologies, is the fact that we've grown up on smartphones. Our lives are now run on phones and so anything that mirrors that look and feel makes the implementation faster.
HealthLeaders: Where would you like to see DCH make future tech investments?
Dusang: This is probably cliché, and you probably hear it from everybody, but I think the two areas that have the most potential are AI and bots. There could be huge gains in our revenue cycle by using that particular technology. I'm very excited about the potential of what we're going to be able to do there, but we have to do our due diligence as an organization and find the right partner.
We have to consider the pricing versus the efficiency we will gain. I have spoken with several revenue cycle bot companies, and it is very clear that we’re just in the beginning because the pricing is all over the board. One company wanted to charge me a percent on improvement, and I would have ended up paying more than it would cost to hire 10 people to do the work—that’s not efficient. A lot of technology is overpriced for what you're gaining. And again, as CFO I have to see our bottom line improve so that we can sustain ourselves and be able to provide better access to care, more care for more people, kept here locally.
Amanda Schiavo is the Finance Editor for HealthLeaders.
Investing in technology that can nudge clinicians to be mindful of pricing while they treat patients is one of the most effective things an organization can do.
Utilizing AI and bots could result in huge gains in the revenue cycle.