As the healthcare industry continues to shift amid increased financial and policy pressures, more hospital and health system CFOs are making their way to the top operational and leadership seats: COO and CEO.
“From my perspective, health systems are increasingly looking to CFOs for COO and CEO roles because the challenges facing healthcare organizations no longer fall neatly into financial or operational categories,” Robert Fries, CFO of Dallas-based Children’s Health, told Becker’s. “Financial performance is directly connected to operational execution, workforce management, clinical outcomes, access and strategic growth.”
Many finance leaders attribute the shift to enterprisewide visibility amid tightening margins.
Jason Hinkle, CFO of Deaconess Illinois — part of Evansville, Ind.-based Deaconess Health System — told Becker’s the CFO role has evolved beyond the traditional accounting, budgeting and financial reporting duties. He said he now serves as the CEO’s “primary strategic business partner” to help evaluate growth, survey risk, allocate capital and guide organizational decision-making.
“As many of us say in healthcare, ‘no margin, no mission,'” Mr. Hinkle said. “While CFOs must always keep quality outcomes, patient access, employee engagement and the consumer experience at the forefront, they also have a responsibility to ensure the organization maintains the financial strength necessary to continue delivering on the organization’s mission.”
Most recently, Brentwood, Tenn.-based Lifepoint Health CFO Aaron Lewis made the transition to system president and COO, a move that brought two decades of hospital leadership across operations, finance and development to his new position.
Drew Keesbury made the move from CFO to COO of St. Joseph, Mo.-based Mosaic Life Care in early July. Mr. Keesbury, who is serving in a dual CFO and COO role until the system locates a new CFO, told Becker’s the move grew out of succession planning. Mosaic was looking for someone who would be comfortable in the COO position now but ready to take on the role of CEO down the line. After months of searching for COO candidates, Mr. Keesbury became the obvious choice.
“I don’t know if I’d want a COO role that wasn’t here,” he said. “To me, this was the spot I was going to take. … We have a great organization, a great community and a great culture. I wanted the ability to help protect that.”
Mr. Keesbury tied the broader trend of CFOs becoming COOs to a tougher healthcare environment, including margin pressure. While he said finance does not need to lead operations, there is value through that lens as organizations make decisions.
“Not all growth is equal,” he said. “Everyone’s talking about growing, and that is very real; we absolutely all continually have to grow in order to sustain. But it’s not all equal, and the finance world has the background of the different types of growth and where the organization really needs to step forward to get that sustainability.”
Even in the CFO seat, Mr. Hinkle said most of his daily conversations are operational discussions that are shaped by financial insight.
“Today’s CFO is not simply responsible for reporting what happened financially; they’re expected to help shape what happens next,” he said.
Mr. Fries said the financial and operational sides of hospital and health system leadership have become inseparable, with financial performance directly connected to access, clinical outcomes, operational execution, strategic growth and workforce management.
He said the CFO role has evolved “significantly” over his career in healthcare.
“Much of my time is spent working with clinical, operational and strategic leaders to solve problems, evaluate opportunities, allocate resources and improve performance,” he said. “In that sense, finance leaders are often developing the mindset and capabilities required for COO or CEO roles well before any formal title change.”
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