CFO Jeff Froisland on Mayo Clinic's goals, expansion plans in Arizona

Jeff Froisland serves as CFO of Mayo Clinic's Phoenix campus.

Before taking the role in 2006, he was the organization's controller and director of revenue cycle.

Although Mayo Clinic's campuses in Arizona, Florida and Minnesota have similar philosophies and cultures, they are in significantly different markets and present their own set of challenges, said Mr. Froisland. 

Here, Mr. Froisland discusses those challenges, shares insights about the campus expansion and offers advice for other hospital finance chiefs.

Note: The following responses were lightly edited for length and clarity.

Question: What has been one of your proudest moments as CFO?

Jeff Froisland: We were not doing well financially several years ago. It really fell on me to get leadership to truly understand the root cause of what was driving the poor performance. It took several months because the solution would be painful, as most initiatives like that are. But through perseverance and remaining calm and using fact-based data, [leadership] finally came to the realization they couldn't survive on 1 percent margins. Over the course of the next two to three years, we were able to get those margins well above 5 percent, and we've held those for close to a decade now.

Q: What is the greatest challenge facing hospital CFOs today?

JF: Where I'm at in the Phoenix market, I think it's the constant evolving nature of external disruptors, whether that be mergers, consolidations, horizontal or vertical. It really changes healthcare from that of patients can choose to go where they want to one where they're much more being steered into a certain decision-making process. So, it's a constant challenge for the organization to stay focused on not just the internal operations but what externally is happening in the market and our response to it.

Q: How are you working to overcome that challenge?

JF: We are somewhat unique in that we are focused on the top of the pyramid of healthcare — the most complex types of patients and specialty care, whether that's outpatient or inpatient. We're [also] in a unique position to expand those services, and that's been a big part of the continued growth of Mayo in Arizona.

Q: What philosophies, events or people influence your leadership style?

JF: Over the years, I've observed a lot of leaders. I think the ones who become the most respected always deal from a position of facts and straightforward discussions about issues that face the organization. People don't always like to hear bad news, but it's how you deliver it and convincing them [leadership] to turn [that news] from bad news to, "This is the opportunity to make a change."

Q: In September, Mayo Clinic in Arizona announced a five-year, $648 million expansion of its campus. Can you provide an update on that and how it factors into your overall financial plan?

JF: One of the big internal challenges that we've had up to this point and will face until that expansion is completed is the inability to grow. Our hospital is frequently on diversion because we don’t have the beds or the capacity to meet the demand. If you get into that position, it's a continual challenge that you aren't growing out of the current economic environment. Your reimbursement generally doesn't keep pace with inflation or the expense growth in the healthcare industry. Most of our growth has been in new, innovative service lines within our Phoenix campus, and that's a bit restricted until we complete that expansion.

Q: If you could pass along a piece of advice to another hospital CFO, what would that be?

JF: I think it's the basics — building a very strong team around you. You can't do everything yourself, and you've got to be able to rely on your revenue cycle leader, your financial reporting leader, supply chain and even help influence people outside of finance.

To participate in future Becker's Q&As, contact Kelly Gooch at kgooch@beckershealthcare.com.

 

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