By Tom Quinn
What does today’s healthcare CFO role look like? It really depends – mainly on where the role lies in an organization’s structure. CFOs now generally fall into three different categories: a hospital-specific site CFO, a divisional CFO, and a centralized, system-wide CFO.
I have spoken with countless CFOs about how consolidation is shifting their responsibilities, and recently had the opportunity to publish a two-part article for FierceHealthcare. Linked below, the two examine the changing role of the healthcare CFO at differing organizational levels.
As I say in the introduction to the first article, “Forward-looking CFOs at all levels – site, divisional and system – are tracking the impact of ongoing and anticipated consolidation upon their professional lives.” What does consolidation mean for CFOs? Their responsibilities will continue to evolve, and quickly. Hospitals no longer operate under their own financial umbrella; instead, they must cooperate (and in some cases, compromise) with a corporate board that has the interests of several institutions to consider when making decisions.
In the case of site or divisional CFOs, this means operating within a budget that is predetermined and focusing on the technical responsibilities of financial management, such as revenue enhancement and expense control. It is important for these leaders to keep in mind how their institution fits within the entire system.
The leaders at the system level, in turn, need to consider the needs of several institutions while keeping in mind the system’s big picture. An effective system CFO will incorporate site and divisional leaders into the decision-making process, aligning site and system goals. By doing so, entity success will follow system success.
In healthcare today, financial acumen and risk management skills are essential. As stated in Part I, “CFOs are in an excellent position to provide crucial guidance in this changing healthcare environment.” This is a critical time for financial officers to affirm their significance in healthcare, and to use their understanding of the big picture to make a lasting, positive impact on the future of their institutions.
Tom Quinn is senior partner in Witt/Kieffer’s healthcare practice.