Intermountain’s financial planning tool moves from annual budgets to rolling forecasts

Intermountain Healthcare has a reputation for being an innovative healthcare system, with caregivers and IT managers always looking for ways to expand its footprint and broaden the options for patients to receive care in their preferred environment, whether virtual or in person. This mission applies to Intermountain’s hospitals, medical groups, clinics and its health plan, SelectHealth.


However, finding and allocating a budget for these innovation initiatives can be difficult, said Gregory M. Johnson, vice president of finance at Intermountain.

“Not only do we have multiple divisions, but we also have to navigate different payment models – both pay and pay – and maintain cash to support our various projects,” he explained. “Uncertainty is the norm in healthcare – it can be difficult to predict the extent of flu season or respiratory problems for local people.

“Yet each year we created an annual budget that could end up in the millions of dollars off target,” he continued. “And that was the state of things in 2019, before the COVID-19 pandemic became our reality. We were really looking for a tool that could simplify and streamline the way we plan, as well as offer clear and actionable on the profitability and productivity of our business units.”


Intermountain chose financial IT provider Strata’s dynamic planning system to meet its challenges. The first phases of implementation, which began in 2019, included rolling forecasts and performance management.

However, at the start of 2020, when the COVID-19 pandemic arrived in the communities served by Intermountain, the health system was still using its traditional budgetary approach.

“The decline in patient volumes due to the postponement of elective procedures, combined with the increase in the number of patients in intensive care, has required hospitals across the country to make significant and ongoing adjustments to projected revenues,” Johnson recalled. . “We made the choice to suspend elective procedures shortly before they were imposed statewide in Utah.

“We are spending more time thinking strategically, including growth initiatives, rather than analyzing and reviewing the details of historical patterns. This has freed up our management team to focus on other important initiatives. “

Gregory M. Johnson, Intermountain

“However, as we had moved to a rolling forecast by mid-2020, we were in a better position to manage its impacts and pursue some of our planned initiatives.”

A key tenet of Strata’s approach, Johnson said, is that financial planning and analysis should be informed by an organization’s strategy, not the other way around.

“With the rapid pace of change in our environment, we needed a solution that would provide more agility through a quarterly forecasting process and support our continuous improvement operating model,” he noted. “Robust and flexible software allowed us to more effectively forecast our results and identify key performance trends or gaps.

“Leveraging the entire StrataJazz platform has also allowed us to understand our costs and margins across care episodes, service lines and patient populations,” he added. “Because we have diverse operations that face unique and varying financial pressures, we determined that dynamic planning would be better suited for effective financial planning and performance measurement.”

With changing patient numbers, the continued shift to value-based payment models, and rising healthcare costs, Intermountain found that creating an annual budget was not as helpful for manage operations. He concluded that the rolling forecast model was a common sense approach given the organization’s need to be more agile in reacting to all the changes it manages.


“With a thoughtful approach to change management and the intuitive nature of Strata’s platform, our implementation helped management rethink financial goals and drive improvements,” Johnson said. “We began our journey in the fall of 2019, undergoing a significant transformation towards dynamic planning in our hospitals, medical groups, health plan and other areas.

“By leveraging the Strata team, our leadership has prioritized the implementation of this new technology and planning process,” he continued. “We conducted a thorough evaluation of market-leading solutions to make our decision, and Strata’s dynamic scheduling solution was the best aligned with our vision and goals.”

For implementation, Intermountain created a committee that included operational leaders who worked closely with the finance team to help with key decisions and explain to management what would be different and why the organization needed to make this change. .

Any change, no matter how positive, is often met with resistance, Johnson said, but staffers were pleased with how the team bought into the idea of ​​moving away from budgets.

“When the COVID-19 pandemic hit, we stuck to the dynamic planning model because traditional budgets don’t really work in a global crisis,” he noted. “We needed to be able to forecast on the fly and update projections to navigate the many unexpected turns of the pandemic.

“These efforts have also helped us ensure that we have the necessary cash to care for patients, caregivers and providers while continuing to move forward with other projects,” he added. . “At the start of the pandemic, we set up a command center, which helped us receive continuous information from across the organization, and Strata’s solutions helped us tighten projections and support decisions that were to be taken.”


Planning technology has enabled Intermountain to take a more agile approach to financial planning, including engaging C-suite management and rethinking financial goals. The healthcare system has been able to translate financial planning goals from the corporate level to business units and individual departments.

“Now we do quarterly reviews and every month local teams discuss performance through operational reviews,” Johnson said. “We are able to periodically reassess our goals and plans based on the actual metrics we have achieved.

“Through the implementation of Strata’s processes and technology, we also spend more time thinking strategically, including growth initiatives, rather than analyzing and reviewing the details of historical patterns. This freed up our leadership team to focus on other important initiatives.”

He added that throughout the pandemic, Intermountain has been proactive in supporting its workforce and has not laid off employees, demanded pay cuts or cut bonuses.


“Critical to the success of our implementation was engaging with key leadership groups, including our operations board and leadership team, in choosing a solution to better manage the company’s finances. organization,” Johnson advised. “Giving leaders the opportunity to understand how the new process would work, the benefits of making the change, and asking them to vote for or against the recommendation to implement were important steps for us.”

Buy-in and support were key to successful implementation, he added.

“Ongoing communication has also been critical to our success,” he said. “We have established an operational finance steering committee that has expanded beyond implementation and includes a number of operational managers who attend a monthly meeting on various topics.

“At these meetings, we discuss issues they’ve encountered, and we’re able to collectively explain improvements and answer questions that reinforce how rolling forecasts and performance management help our leaders across the board. levels of the organization to prudently manage the business.”

In addition, monthly operational reviews and quarterly business reviews that take place across all business units provide opportunities for user experience communication as well as variance explanations so that management better understands the business and can focus its focus on what matters most, he concluded.

Twitter: @SiwickiHealthIT
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