Why financial literacy is so important for structural heart program directors

"I never would've thought after being an ICU nurse for 18 years that I would want to be involved more with finance. But I really found that it intrigued me and when I needed resources for my program, finance was understanding it and being able to present it to senior leadership. That's what got the resources I needed, such as additional staff, additional equipment, the ability to implement new programs and new technologies. You have to be financially sound before you go asking for additional resources," Redick said. 

She highlighted the importance of understanding contribution margins, cost versus reimbursement, and the financial language that resonates with senior leadership in the C-suite. By becoming financially savvy, Redick was able to successfully advocated for additional resources. 

"I am fortunate enough to be able to network with a lot of people that do the same thing I do across the country. They all struggled with this as well. So it's something that I kind of became passionate about and really mentor my leadership, my managers and leadership team on. We look at our budgets and our variance reports and really take a deep dive and see where can we be more financially, fiscally responsible, be more efficient in using our supplies," Redick said.

Monitoring the finances of structural heart and understanding the analytics 

When TAVR was first cleared for commercial use in 2012, newly formed TAVR programs had an uphill battle because transcatheter procedures were more expensive than surgical valve replacement procedures. However, patients were attracted to the idea of minimally invasive TAVR, so this became an attraction for new patients to these centers. Most early on would not qualify and were instead referred for surgery. At many centers, this allowed increased revenue for hospitals not from TAVR, but from the extra surgical patients TAVR helped recruit. But, as lower risk patient groups were allowed by the FDA to be treated with TAVR, structural heart programs saw rapidly increasing demand. TAVR now more makes up about 85% of all aortic valve replacement procedures in the U.S.

Redick emphasized the initial challenge of profitability for TAVR and MitraClip procedures and how financial efficiency became crucial. As patient volumes increased, she said, so did the need for additional staff and resources to keep up. This is where having dashboards of data on procedures, supplies, costs and reimbursements helps show hospital leadership empirical data of what is happening and what is needed.

"This is the way to do it; it's through financial data," she explained. "Once I started to really learn and began speaking their language, then I felt like they felt like I was more credible when I was presenting my cases for the need for expanded resources." 

Keeping close tabs on the costs of your programs also helps find areas of possible savings. While taking a deep dive into her program's finances, she noticed a charge on every case that was over $3,000, totaled $1.4 million a year. After investigating, it was a charge so a perfusion team could be standby in case the procedure converted over to an open surgical procedure. This was a hold over from years ago when this was considered necessary, but in more recent years, conversion to open cases is an extremely rare occurrence. They were able to renegotiate that contract and had a 17% increase in savings for the program. 

Where to find cardiology financial literacy help

Redick acknowledged the lack of business backing for many clinicians and offered advice to peers in similar positions. She stressed the necessity of understanding program finances to make compelling cases for additional resources. Redick recommended using analytics and electronic medical record (EMR) data to create informative dashboards, which can greatly help with financial transparency and allows for better business decision-making.

Redick also praising vendors for providing information on things like inventory control, billing and getting a grasp on the details of reimbursements. This included the significance of capturing patient comorbidities listed in the EMR to maximize reimbursement.

In conclusion, Redick emphasized the renewed focus on business aspects in cardiovascular society meetings. As margins become slimmer, there is a growing acknowledgment that providing high-quality care efficiently and at a lower cost requires a deep understanding of program finances. Redick called for leaders to mentor upcoming professionals in financial literacy, ensuring the continued growth and success of structural heart programs across the country.

With hospitals operating on slimmer and slimmer margins, financial understanding by managers has increasing become more important.

"I think we're all being asked to provide the same level of high quality of care, but doing it more efficiently and at a lower cost if we can. So that's another very good reason why looking at your finances is imperative to the programmatic growth," Redick explained.