Alert finance leaders to impending risks from ACA

Revenue and finance will be affected significantly by healthcare reform, and key aspects of reform already are impacting revenue streams, says Erin M. O’Connor, Esq., practice leader with Cammack LaRhette Consulting in New York City.

“In order to ensure that quality continues to be delivered to patients in ways that maximize efficient utilization of the health system — not just when care is needed, but also to prevent care episodes — hospitals, physicians, and payers are looking to shape reimbursement to align those objectives,” O’Connor says. “That’s a start, but doesn’t in and of itself create change.”

O’Connor suggests that even if revenue is not usually a primary concern of risk managers, they should, at a minimum, ensure that leaders are aware of the coming changes and the potential impact on revenue. The risk manager can play a role in helping mitigate those financial risks through the implementation of quality improvement and security measures.

Critical to success is access to data to drive process and measure results across the care continuum as well as the organizational and human resources development plans to transform the workforce, O’Connor says. And there has to be an integrated way to measure it all to reinforce best practices and uncover improvement opportunities.

“Payers are trying to drive change, but they don’t control how physicians practice. Hospitals have resources to support practice transformation, but without physician leadership fully committed to transformation efforts, alignment will be elusive,” O’Connor says. “Practice alignment and integration models vary, and compensation is a key component of those models. Hospitals have more control in an employed model, but also more risk if their employed physicians underperform.”

Hospitals contracting with payers for risk arrangements brings more leverage to the negotiating table than a small independent practice might be able to — but to achieve results, hospitals must rely on physicians to practice in a way that maximizes efficiency without compromising quality, O’Connor explains. Health reform is trying to drive collaboration between what should be interdependent parties serving the health needs of a community to achieve optimal results of good care and good experience at reasonable cost.

“Experimentation is key to finding the right balance and best practice. Hospitals and physicians need reasonable room to experiment without fear of financial ruin,” O’Connor says. “That said, organizations need to be nimble. The market is swiftly changing.”


  • Erin M. O’Connor, Esq., Practice Leader, Cammack LaRhette Consulting, New York City. Telephone: (212) 227-7770 Ext. 228. Email: