What 11 hospital CFOs told Becker's in 2021

Hospital and health system CFOs have navigated many changes and challenges in the industry in 2021, including staffing shortages and rising inflation.

This year, dozens of finance leaders from hospitals and health systems across the U.S. shared their perspectives on a variety of topics with Becker's Hospital Review via podcasts and interviews. Below are quotes from 11 of those executives, discussing everything from the best piece of advice for their peers to their most pressing concern.

1. Kevin Burns, executive vice president, CFO and chief business officer of Houston Methodist, on the best way to present a hospital's finances to the board. "When you're sharing financial information with any party, make sure you're providing context, not just numbers. Providing context helps them understand the numbers. Explain unusual items and what is routine. Help them understand what this information might mean for the future. We also always strive with our board and leadership team to be very transparent. We want them to know what is working, where we may need help and to let them know that we are all in this together. Transparency is a word that often gets overused, but finance leaders need to make it a priority."

2. Paul Castillo, CFO of Michigan Medicine in Ann Arbor, on some of the biggest trends he's seen since the beginning of the pandemic. "One of the major trends is the substantial growth and support of virtual care. Support comes in many forms — the willingness of physicians to deliver and patients to receive care in a virtual setting; the availability and utilization of multiple technology platforms enabling virtual care; and the willingness of payers to expand virtual care coverage. All parties have experienced new learnings, and I anticipate the industry will see continued expansion of virtual care. Similarly, the virtual approach has expanded to nonclinical services. Administratively, we have learned that we can work efficiently in remote settings, which creates new ways to think about work. I would be remiss if I did not mention the importance of the liquidity and operational support provided by federal and state governments. These financial resources have been crucial to our ability to continue to be available for our communities."

3. Mike Coggin, executive vice president and CFO of LifePoint Health in Brentwood, Tenn., on the greatest accomplishment as CFO in the last year. "I am so fortunate to work with an incredibly talented and dedicated team at LifePoint Health. Thinking back on the past 18 months of the COVID-19 pandemic, in particular, we have seen — and continue to see — our people rise to meet every challenge that has come our way while keeping our patients at the center and our mission of Making Communities Healthier in focus. Each member of our team knows their specific role and responsibility and understands how it directly impacts our mission, which has helped our organization stay focused and on track while dealing with a global pandemic. I can honestly say there was never a question of if we would succeed during the darkest days of the pandemic, as we knew we had the right team in place to navigate it. I would say my greatest accomplishment in my role as CFO is having the opportunity to serve alongside such hard-working, inspiring and mission-driven individuals who truly put their hearts in what they do each day."

4. Michele Cusack, senior vice president and CFO of Northwell Health in New Hyde Park, N.Y., on her litmus test for evaluating potential partnerships and mergers. "The organizations need to present how they can be accretive to the organization — and that's not just from a financial perspective. We need to feel comfortable with our potential partners and assess if there is a cultural fit. The organizations also need to show how they can fill a gap in each other's portfolio, either by market or business segment while delivering the financial results necessary to not be dilutive."

5. Dennis Dahlen, CFO of Mayo Clinic in Rochester, Minn., on the most pressing issue facing hospital CFOs. "Selecting one issue from the many that exist is a challenge, but I would highlight the fragility of the healthcare workforce after 19 months of pandemic operations. Healthcare professionals at virtually all institutions, including Mayo Clinic, are physically tired and mentally weary. The contributing factors are well-known and include the emotional toll of caring for critically ill patients with seemingly no end in sight; limited time off due to high patient volumes; added workload; and the challenge of vaccine hesitancy. We're also seeing staffing shortages in some key clinical areas. We're making appropriate adjustments to recognize and reward staff in this difficult environment and to continue attracting the best employees."

6. Lori Donaldson, CFO of University of California San Diego Health, on her top advice for another CFO. "I am extremely fortunate to have worked for UC San Diego Health for 30 years, of which the past 11 have been in the CFO role. Throughout my career, the scope of the CFO role has expanded significantly. Today's CFOs are responsible for leading an interdisciplinary team that covers essential business functions that are very different in nature, as well as being a strategic partner to the CEO. Revenue cycle, supply chain, accounting, budgeting, contracting and business analytics are all very different, complex functions that require deep expertise in both the relevant subject matter and the regulations that are unique to healthcare. In order to succeed as a healthcare CFO, you need to build a strong team of experts who have the depth of knowledge to successfully manage these functions and be nimble, strategic thinkers who can adapt to the constantly changing academic healthcare environment. Building such a team requires strong collaboration with human resources to recruit talent; however, that is not enough. Health finance professionals are eager to learn and add value to their organization so the CFO must ensure the team has access to tools, training, coaching and mentorship to enable professional growth. The CFO must also provide a working environment that promotes trust and values individual contribution."

7. Greg Hoffman, CFO of Providence in Renton, Wash., on what it's like to serve as a CFO during the pandemic. "It's been interesting and rewarding as well. I've been humbled by all the heroic efforts and that our caregivers have risen to the occasion and addressed the pandemic in our communities. It's been interesting in the sense of having to pivot and be focused on allocating resources in the near term. And being able to do that and coordinate across a large system, we've had some significant advantages in that a lot of what we've done in our modernization, what we call Health 2.0, really provided the platform for this coordination throughout the main entity."

8. Edward Karlovich, executive vice president and CFO of UPMC in Pittsburgh, on his top financial priorities for 2022. "From a financial perspective, we want to maintain a positive margin to support our capital investments and employees. To do this, we are focused on a few things. First, supporting our operating employees to ensure they can perform to the best of their ability. They are the ones who make the difference each and every day. Second, we want to make sure we, as a finance team, can provide the things that the organization needs to be successful. This includes, but is not limited to, making sure supply chain folks can get all needed supplies and ensuring we have the cash collections needed to fund our organization. Another priority is making sure we provide the advice and guidance needed to invest our dollars effectively so we can prepare for the next challenge."

9. Kathy Lancaster, CFO of Kaiser Permanente in Oakland, Calif., on her best advice for another healthcare finance chief. "For a long time, healthcare was slow to change. COVID-19 turned that standard and accelerated change. We must embrace change even though change is not always comfortable. My advice would be to get comfortable with being uncomfortable because it will help achieve things you never thought possible. I encourage everyone to engage and empower their teams to have a role in driving change and to take ownership of the opportunities ahead. Our job is to provide the support they need to advance new care models and other opportunities successfully."

10. Sergio Melgar, executive vice president and CFO at UMass Memorial Health in Worcester, on the advice he would give to IT execs and CFOs to protect themselves against cyberattacks. "The damage can be administrative. These are all hypothetical exposures, all the way up to the ransomware attack on the University of Vermont, where the system lost $50 million in revenue. Hospitals should recognize that even if there is no direct damage, a hospital system gets taken to its knees due to the mere administrative hassle where someone clicks on the wrong links; it's still months of work. Hospital executives should recognize that implementing cybersecurity controls is a continuous process rather than an outcome. There is no 'done.' Hospitals should hire a dedicated chief information security officer that can focus on these issues and allow them to staff and lead an exceptional team."

11. Dominic Nakis, CFO of Advocate Aurora Health in Milwaukee and Downers Grove, Ill., on the skills hospital CFOs need today to thrive. "While health system CFOs will always need to retain an operational focus and ensure solid operating margins, today they also need to assume larger strategic planning and change management responsibilities. As health systems become geographically larger and more complex, finance leaders need to reach across business units and clinical operations to understand priorities and challenges. They then need to augment these insights with data to guide better strategic decision-making across the organization. This work will lead to improved financial and patient outcomes and ensure that health systems can fulfill their purpose of helping people live well for many years to come.

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