Bob Segin serves as executive vice president and CFO of Marlton, N.J.-based Virtua, one of the state's largest health systems.
In this position, his responsibilities include the $1.3 billion system's strategic financial planning and treasury management.
Becker's Hospital Review recently caught up with Mr. Segin to discuss what he enjoys about his job, the challenges he faces and the evolving CFO role.
Note: Responses have been lightly edited for clarity.
Question: What do you enjoy most about being CFO of a health system?
Bob Segin: Where healthcare is going now. Healthcare was so fragmented and the care was episodic, and I see all that changing now in a positive way. With independent physician collaboration, with merger and acquisition activity and various partnership arrangements, I really am starting to see that the healthcare system is moving forward for the benefit of the patient instead of the individual organizations or institutions. And seeing that collaborative amongst independent physicians, ancillary areas, ambulatory facilities to the health systems and with the payers — it's exciting, and that's what energizes me.
Q: What do you believe is the biggest challenge for hospital and health system CFOs in transitioning into a more strategic role?
BS: The economic equation. Even though we're moving from volume to value, the economic equation is not there yet for regional systems like Virtua or multistate systems to be economically viable moving forward. That's still the challenge. We're trying to get there, but the financial results don't support that transition yet. And I think the systems and the payers will figure that out and will make adjustments. But it's not there yet. And, value-based payment models, they're not economically viable either. The gain-sharing opportunities, the ACOs, they're not providing that shared savings value that would push organizations to voluntarily move into those areas. So I think we've all got to give a little bit in terms of financial viability to make a win-win situation for all stakeholders, and right now it's not there. It's a win-win more so for the managed care companies and Medicare, not necessarily for the providers. But I think we'll get there over time. I'm optimistic.
Q: What is Virtua doing to overcome this challenge?
BS: We've got a clinically integrated network of over 1,200 physicians. We have partnered with a major payer in our marketplace to create a private label plan that would work and coordinate with our clinically integrated network to provide a high-quality value private label product to the members of our community. But it's been slow to mature because large payers aren't used to provider partnerships or collaboration. So they're learning. They know that's where they need to go. Providers know that's where they need to go. We're trying to figure out the journey together, and that's been a challenge. There have been some setbacks and some advancements, but we're learning together to make healthcare beneficial for our patients. That's the mutually exclusive common denominator — our patients. It's going to be slower than I think everybody anticipated in terms of large management care companies and systems getting together, but we're moving in a positive way in that direction.
Q: What advice do you have for other hospital and health system CFOs on going beyond the typical CFO duties and getting involved in other aspects of the business?
BS: It's a good opportunity for CFOs to get out of their comfort zone and to work with physicians and payers to devise a different solution moving forward. Hospital CFOs are typically so conservative they don't want to take a look at something new or different if the current model is working. Well, the current model may be working for them now, short term, but it won't be working for them two to four years from now. So they've got to get out of their comfort zone, get out of the episodic, per diem, case rate payment methodology and move to more collaborative arrangements.
Q: Because the CFO role is changing, what characteristics are important for hospitals and health systems to look for when filling the CFO position?
BS: I think an entrepreneurial spirit. It's not about just maintaining the health system and driving down costs to create a margin or it'll be a zero-sum game at some point in time. So they've got to have some form of entrepreneurial spirit. They need to get out of the health system box and take a look at other partnership opportunities. At Virtua, we have over 17 ambulatory surgery joint ventures throughout New Jersey with over 250 surgeons, and it is where healthcare's going. Orthopedic surgery is going to be all outpatient probably within a year or two if the patient qualifies and it's routine. So it's not about preserving what you have today. It's looking at what business opportunities are there tomorrow. So that CFO has to have that entrepreneurial spirit and they have to have the personality and knowledge to collaborate with their leaders in the organization to help maybe drive that different model. It's not about the CFO in the past with the green eyeshades looking at cost reports and financial statements. That's a thing of the past. There are still a lot of CFOs who like that and like to be in that role, but that role is not the future of the CFO in healthcare.
Q: What has the evolving CFO role looked like at Virtua?
BS: Some CEOs don't want their CFOs to be more entrepreneurial, out of their space or areas of responsibility. Fortunately enough at Virtua, I've had leaders who've encouraged that. For example, I was leading patient satisfaction scores with our chief nursing officer, doing things outside of the normal traditional healthcare finance role, such as looking at new business opportunities, working on improving patient satisfaction, or working with our human resource chief to take a look at how employee engagement can improve. All of those things I think are opportunities for a CFO to be involved in helping improve their business.
More articles on healthcare finance:
Kaiser Permanente sees revenue climb $8.1B in 2017
20 hospital CFOs in the headlines
Why a Seattle TV station bought $1M worth of medical debt