20 pieces of advice from hospital CFOs

From changing reimbursement levels to the evolving CFO role, hospital and health system financial leaders are dealing with a number of challenges.

Regarding the numerous issues CFOs are facing, financial leaders from hospitals and systems across the nation shared the following pieces of advice with Becker's Hospital Review over the last five months.

1. Michael Allen, CFO of Gundersen Health System in La Crosse, Wis., shared his thoughts on the essential skills health system CFOs need to possess in today's healthcare climate. "There are several skills or traits necessary to navigate our complex environment. The first is communication," he said. "It is critical to be able to articulate the financial context and the 'why' for our plans and decisions across the organization. That requires the ability to carry that message effectively from the boardroom to the front line. If that is done well, then finance moves from being finicky to being a partner for the organization."

2. Mr. Allen also shared his views on the greatest challenge facing health systems today. "Our greatest challenge isn't risk-based contracts, accountable care organization development or physician recruiting. Our biggest challenge is adapting and competing in the new health economy," he said. "Our patients will demand more options, self-service, convenience and lower costs, and if we don't respond other competitors outside the industry will."

3. Chicago-based Northwestern Memorial HealthCare Senior Vice President and CFO John A. Orsini shared his thoughts on ways for hospitals to handle the influx of patients with high-deductible health plans. He said, "We're focusing on determining what the patient's out-of-pocket cost will be and getting that information to the patient and securing payment before they have the procedure done."

4. Jeff Rooney, former CFO of Chicago-based University of Illinois Hospital & Health Services System, offered advice to hospitals interested joining forces with another entity. "If you are going to become part of a larger national system you can't get away from serving your local market," he said.

5. Pamela Hess, CFO of Saint Thomas Midtown and Saint Thomas West hospitals in Nashville, Tenn., offered her views on the changing CFO role and the importance of getting involved in areas outside of finance. "In the past I wasn't involved in many of the quality and infection control meetings, but with readmissions impacting reimbursement I had to get involved," said Ms. Hess.

6. Palo Alto, Calif.-based Stanford Health Care CFO Daniel Morissette shared his thoughts on the shifting CFO role and what's holding some financial leaders back. "Broad, customer-focused perspective is important for the assessment and implementation of a successful strategy," he said. "Learning the customer's preference requires active engagement in the issues facing the health system. Many CFOs do not take the time or effort to be a significant strategic business partner, and as a result are not called upon for broader strategic roles."

7. Mr. Morissette also shared advice on how hospital and health system CFOs can go beyond the typical CFO duties. He said, "Follow your passion, be a constant learner and a professional 'sponge' with colleagues who can provide insights into other aspects of the business."

8. Regarding CFOs interested in becoming more strategic and getting involved in other aspects of the business, Mr. Morissette advised them to "partner with other leaders on a routine basis and additional opportunities will be forthcoming."

9. Dothan, Ala.-based Flowers Hospital CFO Talana Bell shared advice on running a hospital's finance team. She said, "First, surround yourself with excellent people who share the same passion you have for high quality. This not only applies to the financial team but the administrative 'strategy' team. The CEO, CFO, CNO, COO, etc., should all be on the same page working toward the same goals of providing the highest quality care to our patients."

10. Ms. Bell provided advice for CFOs in their personal lives as well. "Take time for yourself. Don't keep your 'nose to the grindstone' day after day. It isn't healthy and it certainly does not 'help' your organization," she said.

11. Jeff Taylor, CFO of St. Luke's Health System, a nonprofit system based in Boise, Idaho, shared best practices for running a health system's finance team. He said, "I think it amounts to instilling a culture of discipline in all that we do, whether that's timely reporting of information, providing operational leaders and physicians with information upon which they can act or hiring the right people."

12. Mr. Taylor also shared his advice on navigating in the shifting reimbursement climate. "Public policy decisions will undoubtedly have a profound financial impact on the health sector going forward. That said, history has shown us that provider systems that are focused on transcending the traditional fee-for-service business model, developing a better product at the population level, and assuming an appropriate level of financial risk have performed very well in recent times and have effectively navigated declining reimbursement rates," he said.

13. Michael Burke, CFO of NYU Langone Medical Center in New York City, shared advice on the tools necessary for a successful finance team. "A best-of-class finance function has to have robust financial systems to be successful, including an integrated enterprise resource planning system to process all expense transaction and an integrated billing and electronic documentation system," he said.

14. Regarding retaining finance team staff, Seattle-based Swedish Health Services CFO Dan Harris said, "Keeping staff engaged and being able to support, train and give them opportunities is of course important and requires a great deal of effort. If you don't provide the effort, you will lose good people very quickly."

15. Mr. Harris also shared advice on what it takes to respond to the industry's emphasis on using fewer resources with patients. "Understanding how to make that happen is not just reducing staff or avoiding use of high-price implants; we need to work more closely than ever with clinicians to assure process redesign and viable options on supply items," he said.

16. Paul Belter, CFO of Arlington Heights, Ill.-based Alexian Brothers Health System, shared his thoughts on the greatest challenges facing hospital and health system CFOs today. "Payers and employers are rightly interested in lowering their costs, but they're focusing on reducing utilization of services, directing patients to lower-cost providers and shifting more the cost burden to patients," he said. To overcome this challenge, "requires hospitals to think differently and creatively as to how to serve more members of their communities by being price competitive, consumer-friendly and essentially the provider of choice for not only patients, but also physicians," said Mr. Belter.

17. Mr. Belter said an issue hospitals and systems will have to overcome moving forward will be to "exist and thrive in the traditional fee-for-service environment, while at the same time preparing for the future model, which ultimately will entail the assumption of financial risk for population health."

18. Brentwood, Tenn.-based RegionalCare Hospital Partners CFO Mike Browder shared advice for hospitals and systems preparing for a joint venture. "Don't assume any of the other parties understand all of the provisions of the legal documents or important specific aspects of the deal," he said. "Whether it's definitions such as 'distributable cash,' implied new board requirements or deal closing mechanics, partner CFOs must be in lock step to ensure initial and ongoing success of the joint venture."

19. David Smith, CFO of Hollywood, Fla.-based Memorial Healthcare System, shared his thoughts on the future of the healthcare industry. "The biggest opportunity that we have is to change the way we define success in healthcare," he said. "For years, success has been defined as quality outcomes and solid financial results for the patient treated at each facility. However, as we migrate toward population health, our objectives are changing to keep patients healthy and out of the hospital entirely."

20. Mr. Smith also shared his view on changes that need to be made in healthcare. "We need to create a culture that recognizes the value of treating patients in lower cost settings, financial models that reward providers who achieve that and a leadership mentality which acknowledges that the traditional ways of measuring success must change," he said.

More articles on healthcare finance:

Mid-year report: 43 hospital, health system CFO moves so far in 2015
Kentucky hospital files for bankruptcy protection
Trinity Health operating income increases while net income falls 57%

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