On The History of the Metropolitan Philadelphia Chapter of HFMA

by Kevin McPoyle (Current Board Member), with the posthumous contributions of Franklin W. Powers (Chapter Founder), and Floyd A. Kinkead (Chapter President 1968-1969) November 2006

It has always been about people.  First there were two.  In 1954 Franklin W. Powers and Albert W. Roller both worked for Philadelphia area hospitals and both were members of an eight year old national organization known as the American Association of Hospital Accountants (AAHA.)  There was no local chapter of AAHA so members in the Philadelphia area, all 13 of them at that time, did not have access to local educational and networking opportunities.  There was a Philadelphia Chapter of the National Association of Cost Accountants, NACA (later renamed the Institute of Management Accountants) which Franklin Powers and Albert Roller were also members.  NACA was a long standing association of businesspeople that sought to expand the knowledge and professionalism of the accounting field.   It was a general industry focused group meaning that it did not provide concentrated coverage on the intricacies of the hospital accounting environment.  Meeting at a local NACA program, Franklin and Albert conceived the idea of forming a local chapter of AAHA which would provide a forum for sharing information and expanding the professionalism specific to the hospital accountant.

It is difficult to recognize what the healthcare industry looked like in 1954.  Medicare and Medicaid didn’t exist.  Our local hospitals included long forgotten names like Philadelphia General Hospital, Women’s Hospital, as well as the more inventively named Hospital for Contagious Diseases and the Philadelphia Hospital for the Insane.  In the mid-twentieth century hospitals were still viewed as mostly public, charity based organizations with little relationship to the business environment.  This created a challenging role for the hospital accountant.  You wouldn’t find a CFO at these hospitals.  These hospitals were run by physicians and charity sponsors, mostly nuns, who rarely focused on the margin component of their mission.  But there were still bills that needed to be paid and employees who needed to receive paychecks, in essence, there were still numbers to crunch.  So the administrators hired accountants, typically gave them the title “comptroller” and their job was to process and control expenses.  The total healthcare expenditures in theUSat this time were roughly only $25 billion, just under 5% of the national Gross Domestic Product.  Hospitals rarely thought about revenue in those days, but things were starting to change.

In 1954 hospitals were focusing less on philanthropic donations for existence and more on lucrative fee-for-service from emerging employer-sponsored health plans.  The industry was rapidly changing.  Administrators were beginning to ask their hospital comptrollers “How do we keep up and respond to these new trends?”  This was a new question for hospital comptrollers and its newness to this industry made it difficult for people like Franklin Powers and Albert Roller to seek useful assistance from their broad accounting association peers.  They realized that there were accountants at every hospital in the area facing the same challenges and so they asked “How can we bring them together?”

After consulting and contacting appropriate personnel in local hospitals, Franklin and Albert arranged for a dinner meeting onJanuary 11, 1955atChestnutHillHospital. Ten individuals joined our two founders at this meeting.  They were Bernard D. Adler, Thomas R. Beaumont, Fred J. Raff, Jr., John E. Brown, George M. Ritchie, Archibald D. Eglin, Jr., Harry C. Little, Elmer W. Stocker, C. Forrest McFerren, and G. Nelson Watts.  Just five of those present at this first meeting were also members of AAHA and they found themselves unable to immediately interest the others gathered at the meeting to form a local chapter of AAHA and affiliate with the national head­quarters inChicago. Still the group was interested in continuing monthly meetings to discuss subjects of general interest to hospital accountants, and so an informal accounting discussion group was formed.

The early organizers felt it would be easier to get people together over a meal, so monthly meetings were scheduled in the evening.  The meetings were hosted at area hospitals and each attendee was asked to pay the host hospital a fee of one dollar, establishing what would become a long standing tradition of always providing very low-cost educational opportunities.

And so began the Hospital Accounting Discussion Group.  Attendance at each meeting grew as topics included such contemporary subjects as Internal Controls, Blue Cross Payments, Cash vs. Accrual Accounting, and Admitting Office Procedures.  At each meeting the concept of forming a chapter of AAHA was also discussed.  Finally, at the 11th meeting hosted at Phoenixville Hospital on May 28, 1956, the idea of forming a chapter became the majority opinion.  Perhaps after ten meetings the originators realized just how multifaceted and inexhaustible the topic of hospital accounting can be. They decided that as a chapter of AAHA, matters could be more formally organized and the benefits of affiliation with a national organization could be realized.

Franklin Powers and Albert Roller formed an official Organizing Committee and invited fellow colleague Clarence M. Bogia, Jr., to chair this effort.  This group chose a nominating Committee, of which Joseph J. Hayes, Jr. was Chairman, and the date ofAugust 23, 1956was selected for an Or­ganizing Meeting.  From this meeting an application was made to National Headquarters for a charter, which was issuedNovember 10, 1956.  We thus became the 43rd chapter of the Amer­ican Association of Hospital Accountants.

In 1968, in order to better reflect the membership of the association, AAHA was renamed the Hospital Financial Management Association (HFMA). A second refinement to the name was approved in 1982, changing the word “Hospital” to “Healthcare” and it was at this same time that the Philadelphia Chapter welcomed the addition of the state of Delaware to our service area.  To reflect our wider service area with the state of Delaware as well as from the increasing participation from the flourishing suburban hospitals in the region, it was decided that our name should be changed to the Metropolitan Philadelphia Chapter of the Healthcare Financial Management Association.

Our Chapter grew and evolved in tandem with the healthcare financial profession.  Perhaps the keystone of our success has been our ability to adjust to the changing needs of our members.  Immediately following the formation of the Chapter, the Directors realized that by having the meetings in the evening they had inadvertently excluded from attendance numerous Sisters who worked in the religious hospitals and were very interested in the Chapter’s activities.  So a change was made to schedule meetings during normal working hours.  This made a significant impact on the Chapter, enhanced the inclusiveness of our female members, and made possible the great contributions that would immediately follow by numerous women such as Ida Milanese, our first female president elected in 1965, L. Therese Costello and Sister M. Michelina, O.S.F. who were very active Board members throughout the 1960’s — a time when participation from women was not common in professional associations.  The healthcare financial management field would witness increasing participation by women to a point in 2005 when 50% of professionals entering the accounting field were women and it is believed that an even higher percentage is drawn to the healthcare accounting segment.  Many women have served our Chapter throughout its history to the present day where in the wake of past-presidents Loretta McLaughlin (96-98) and Patricia Underwood (99-00) and considering the current composition of our Board and Officers, the leadership role of women has been surely solidified in the character of our Chapter.

The history of the Metropolitan Philadelphia Chapter of HFMA reflects a growth in membership and an ever increasing spectrum of responsibility in healthcare financial management.  The Chapter has always adapted to meet the challenges of the healthcare financial manager.  The days of the oft-compared and stereotyped bookkeeper, green-visored hunched over his books of account, squinting under an inadequate light, faded into history, and we’re not ungrateful for that.  In his place has appeared a sophisticated financial administrator who fulfills a significant and viable role in the operation of a healthcare organization. Growth has at times been painful and agonizing, but has always been a refreshing and stature-building experience.

The subject matter of our education programs has been a syllabus to our profession.  HFMA became the medium by which the bookkeeper and the comptroller morphed and matured into the CFO, the Director of Finance, the Compliance Officer, the Vice President of Revenue Cycle, and the myriad of other financial leadership roles needed in today’s complex environment.  This migration was met with a combination of both hard and soft skill development of our members.  As a 1971 program education calendar reflects, HFMA members were provided opportunities for development in both the technical skills, such as a session on Cost Finding Reporting, as well as the less mechanical skills, such as a session on “How to Supervise Effectively.”  HFMA would become the de-facto source for information on the ever-evolving Medicare reimbursement program.  Our Chapter would meet this challenge head-on with countless seminars on cost reporting, the prospective payment system, regulatory issues and the like.  This effort eventually culminated into the formation of the Reimbursement Seminar in 1989, which would go on to become our longest running and most popular annual tradition.  Always forward-thinking and innovative minded, the Chapter spearheaded the formation of the Accounts Receivable Committee in 1992, the Decision Support Committee in 1995, and the Physician Practice Management Committee in 1997 — reflecting the diverse and growing range of skill sets needed by the modern healthcare financial manager.

The growth of our Chapter paralleled the growth of the healthcare industry.  By the year 2000 US spending on healthcare, through all of its machinations, had grown to $1.3 trillion, over 13% of the Gross Domestic Product.  Healthcare was now considered the largest single segment in theUSeconomy and the healthcare financial manager was seen as a vital player in this showground.  Much of this growth was occurring in the burgeoning non-acute care sectors and our Chapter witnessed an emergent number of its members employed in the long-term care, home health, and physician practice arenas.  The Chapter rose to the challenge with various programs and committees to assist our members tackle the new tribulations presented by these fields. The years have been full ones and the healthcare accountant has donned the mantle of respectability in the new professionalism as a healthcare financial administrator.

Perhaps the greatest legacy of our Chapter will always be its ability to connect people, from colleague to colleague, and from generation to generation.  At each seminar the networking that takes place in between each presentation is perhaps as invaluable as the education obtained from the sessions.  Our involvement in committees also brings us together in shared tasks, where through conference calls and meetings, duties and deadlines, we get to know one another. This is networking in its truest form.  We become not just names in a directory, but people who look to each other as colleagues and friends.  And like the passing of the gavel from president to president, our Chapter pulsates with seasoned professionals connecting with the up-and-coming and the inexperienced.  Collectively we share a wealth of experience and familiarity that transcends all barriers.  It is the power of association and it can even be seen in this printed account of our history, written by three members who could only have connected across space and time through the multiple bonds that make up our Chapter.

If our history teaches us anything, it is that our future will remain as dynamic as ever and we will continue to be called upon to meet one new challenge after another.  Our pressures are really no different than those felt by Franklin Powers and Albert Roller in 1954.  The reasons our Chapter’s founders came together are the same reasons we continue this effort today.  The challenges are always changing and there is a constant need to lead the industry through one challenge at a time. We have navigated through an alphabet soup of challenges over the years — TEFRA, DRG, BBA, BBRA, OPPS, EMTALA, HIPAA, MMA, DRA, and the list goes on.  By continuing to reach out to one another to share our knowledge and to connect with others in the field, we will lead our profession to even newer heights.  We will succeed because all of us connected through this organization have come to know the secret of success.  You see, it has always been about people.  First there were two, now our Chapter is nearly one thousand strong; and to the future we move on together.