Today’s modern hospital and health system CFO has evolved from the behind-the-desk, numbers-cruncher role of even 10 to 20 years ago.
Finance leaders must now don strategic hats to help balance competing pressures like thinning margins, rising labor costs and reimbursement headwinds to protect their organizations competitively while staying true to their mission. They do this while holding a larger communication role as an educational, operational and visionary leader.
Becker’s connected with hospital and health system CFOs to discuss how they’ve evolved into strategic partners, the framework used to balance near-term financial pressures with long-term investment, and what it means to lead with both a mission and a balance sheet in mind.
Editor’s note: Responses have been lightly edited for clarity and length.
Jason Hinkle. CFO of Deaconess Illinois (Marion, Ill.): We definitely have taken more of a role in the past several years at being at the table of those strategic decisions. What service lines do we want to delve into? What do our communities need? Ultimately, we have to make sure that our health system is around for years to come to continue to provide the excellent care that we do to our patients. Having a seat at that table on those discussions, the same thing goes with capital.
Everyone wants the latest and greatest technology, but making sure that when we put it down on paper is the return there, that, yes, we’re providing the care that our patients need, but we’re also going to generate the volume and growth that we anticipate. The second piece of that is actually following up on that and saying, “Hey, great, we have a pro forma, but then after implementation, are we realizing what we thought we would from this, or do we need to kind of take another look at our game plan? Where did we miss it and what can we learn from that?”
Jenni Alvey. CFO of IU Health (Indianapolis): We think of it here almost as like two different things, our operating engine, and how we generate the resources that sustain care, access, affordability and reinvestment in our people.
Based on near-term headwinds, [there’s] a lot of reimbursement pressure, labor cost utilization shifts, that require continuous optimization because margins are thin. We also have to think about our strategic engine, the investment engine and the balance sheets. That engine converts that discipline risk into a long-term compounding for mission reinvestment.
It supports the investments and facilities, technology and growth. Things like our new adult academic health center campus, regional growth projects and implementing Epic to the new EHR. That is what really stabilizes an organization when operational winds shift. You have to be highly focused on both, and be thoughtful about how you’re preparing for the future. I think both of those engines are essential, and one kind of defines the pace of flight, and the other helps us maintain the altitude over time if you think about it from an overall operational perspective.
Perry Sham. CFO of Niagara Falls (N.Y.) Memorial Medical Center: I think the role, rather than being the lead as a strategist, is a connector. How do you pull together clinicians, departmental managers and stakeholders, and move them in a direction for the organization? Sometimes you will bring up a new service or work through a new initiative, and a big part of the job isn’t necessarily to make the decisions of that, but it’s to pull the right folks together and provide them with the information needed to drive that initiative.
Robert Chestnut. Senior Vice President, CFO of LMH Health (Lawrence, Kan.): Working hand-in-hand with the CEO to understand their vision on what you’re trying to do [is key]. … You’ve got to work in concert with your leader to figure out what their vision is. There’s always a thousand things to do. How do I focus? How do I work collaboratively with the management team to say, “Let’s figure out what are the most important three or four things.” One thing I try to do is put numbers to that. What are the biggest bangs for the buck and initiatives that we can undertake in any given year? There are always more initiatives than there is time to do it. Let’s figure out the things we can get some early wins on, and things that we think will transform the organization, versus trying to push 20 things at a time.
Todd Roberts. CFO of Cheshire Medical Center (Keene, N.H.): I think it’s having an important relationship with our CEO, being open and engaged. It’s not just a CFO crunching numbers anymore, it’s being strategic and really buying into the overall mission and vision of the organization. We just went through a refresh on that with our board of trustees approving it, which really aligns with what I have looked for in a career.
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