Success in today's healthcare environment requires CFOs to be good businesspeople, according to Venkat Bhamidipati, MBA, executive vice president and CFO at Renton, Wash.-based Providence.
During a keynote session at Becker's 8th Annual CEO + CFO Roundtable on Nov. 12, Mr. Bhamidipati spoke to moderator Scott Becker, JD, a partner at McGuireWoods and publisher of Becker's Healthcare, about how he approaches innovation at Providence after nearly three decades in the IT sector.
Mr. Bhamidipati joined Providence two years ago after 13 years at Microsoft and over a decade in Silicon Valley. While industries ranging from retail to transportation have been transformed by technological breakthroughs like the emergence of the iPhone in 2007, healthcare has been "a little stubborn," he said.
Despite its slow adoption of new innovations, healthcare can look to major tech companies for successful business strategies. Although Microsoft missed big opportunities in social media and mobile devices, according to Mr. Bhamidipati, the tech giant latched on to the cloud computing wave to stay on top of its field.
"What happens in tech, which is going to happen in healthcare, is you have to have clarity in how quickly things are changing — and spot not just technical changes, but business model changes. You have to make concentrated bets on the future before they become reality," he said.
To avoid going the way of Blockbuster and other organizations that "didn't make adequate, large concentrated bets fast enough," Providence is rethinking its healthcare delivery model, Mr. Bhamidipati said.
Historically, Providence has placed its hospitals at the center of care delivery, using inpatient volume as a measure of success. But now, Providence is taking a page from Amazon's book and betting on the idea that brick-and-mortar facilities aren't its most important asset. Like retailers, health systems aren't in the business of real estate, Mr. Bhamidipati said; they're in the business of satisfying consumer needs.
With this in mind, Providence is pivoting to a strategy that Mr. Bhamidipati called "Health 2.0." The approach puts the health system's 14 million patients, rather than its 51 hospitals, at the center of care delivery.
As Providence makes this strategic change, Mr. Bhamidipati said his most important task as CFO is guiding the organization's growth, resource allocation and capital allocation. He is focused on helping Providence grow — both organically and inorganically — while making big bets on data, digital and research strategies, and determining where the organization can deploy partners' capital instead of its own.
"Being a CFO in this day and age requires you to be a good businessperson. You can't just be someone who sits back, counts numbers and says 'no,'" Mr. Bhamidipati said. "We need to be in front of the business model changes that are coming."
More articles on strategy:
Healthcare execs' No. 1 growth strategy for 2020: Buy or merge, Capital One finds
Wisconsin hospital changes name after joining Marshfield Clinic
Baylor plans medical center in Shanghai