5 skills CFOs should develop in the next 5 years
Healthcare organizations are transforming their traditional, insular operating structures to become more nimble and centralized. This means hospital systems need financial leaders equipped with a different skill set to achieve future success.
Financial leaders discussed how the hospital CFO role has evolved in the past five years and predicted what a future CFO might look like during a panel at Becker's Hospital Review 5th Annual CEO + CFO Roundtable in Chicago Nov. 8.
Here are five ways panelists see the CFO skill set changing in the next five years.
Strategic thinker. The CFO position is increasingly removed from daily financial processes as more hospitals choose to either centralize or outsource some financial services, such as revenue cycle management, accounts payable or collections. Economic uncertainty has caused many healthcare organizations to seek partnerships as a way to retain their market share and ensure financial stability. The new CFO is "someone who is still conversant in financial terms, but maybe has an MBA instead of an accounting degree, who is comfortable doing business in a matrix environment and capable of seeing the big picture," says Patrick McGuire, executive vice president at Ascension Health in St. Louis and CFO of the Michigan market at St. John Providence Health System in Warren, Mich.
Michael Allen, CFO at OSF HealthCare in Peoria, Ill., also expressed the critical importance of business acumen for CFOs. "I need to think beyond the numbers on the spreadsheets and be a visionary [as CFO]," Mr. Allen says.
Exceptional social skills. Planning long-term hospital business strategy and forming partnerships has made relationship building a key part of the CFO role. Alternative business models and transactions require collaboration and trust, and "the CFO needs the social and emotional intelligence to do that well," Mr. McGuire says.
Interdisciplinary approach to problem solving. "Money touches everything," says Mr. Allen, meaning that increased pressure to improve a hospital system's financial performance and reduce spending has spurred financial leaders to address operational efficiency across the enterprise. Cost containment efforts are increasingly focused on areas such as performance improvement, capacity management and materials management — departments outside of finance leaders' traditional wheelhouse. "I've seen increased overlap between the CFO and COO roles as both chiefs partner to lead process improvement efforts," said Kenneth McGee, CFO at LorettoHospital in Chicago.
Equipped with an extra-industry sensibility. Leaders who gained their professional experience outside of the healthcare industry can bring fresh perspective, says Jim Cockey, senior vice president and market executive of specialized industries and global commercial banking at Bank of America Merrill Lynch. "There's already an incredible number of folks cross-pollinating into the healthcare industry, asking questions and bringing and outsider's perspective," Mr. Cockey says. Extra-industry leaders may be more likely to question entrenched processes to drive innovation, look to translate successful models from other industries into the healthcare setting and use creativity when approaching healthcare problems.
Knowledge of alternative payment models. Panelists agreed the CFO and CMO should jointly helm a hospital's implementation of alternative payment models and risk-baring contracts. "As financial leaders who are accustomed to dealing with data and analytics, I think we can step in and play an important role in developing and implementing these alternative payments," Mr. McGuire says.
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