4 Ways The CFO Role is Changing

While never an easy endeavor, managing the financial department of a hospital or health system used to carry a certain level of predictability. Traditionally, CFOs carried the responsibilities of income and expense management, and of course many other peripheral duties. But, those job silos are quickly crumbling. Today, healthcare CFOs have a significantly more complex role with increased responsibilities as a result of health reform and a myriad of proliferating regulatory changes like ICD-10.

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Many veteran CFOs are now beginning to feel the pressures associated with this change. Roles that were once crisply defined have become blurred, entering foreign strategic territory and/or expanding in scope of responsibility. You may even find yourself asking, “How can I become a more effective contributor?”, “What new skills will I need to acquire to stay relevant amidst all these changes?”  

So, where do you, as a healthcare CFO, see yourself in today’s emerging healthcare organization? Is it time to re-think your role? You decide.

Let’s break down exactly how the role has changed and how you need to re-adjust focus accordingly.

  1. CFOs are now on the front lines, working hand in hand with the CEO to develop a strategic plan for their organization in order to identify growth opportunities.

  2. More time is spent dealing directly with physicians and CFOs need to strike a greater partnership with clinical leaders in order to develop strategic plans and reduce costs, while gaining an understanding of what drives profitability.

  3. Now you must have a full understanding of all operations, including clinical roles, and must get involved in performance improvement, operations, marketing and all other aspects of healthcare. Does this excite, annoy or terrify you?

  4. Given the new role of the healthcare CFO has shifted from “number cruncher” to “strategic thinker”, there now comes an increased responsibility for risk management. A broader knowledge is required of integrated systems, regulatory environment, economic impact, and innovative reimbursement systems.

So WHY is your role all of a sudden under attack, changing rapidly and without apology?  It’s a fair question with a laundry list of answers but much of the shift you’re facing is simply a matter of profitability and financial success.  New insurance norms like high deductible plans have turned patients into consumers and many facets of healthcare service now present choices that didn’t always exist.  Choices about provider A vs. provider B, choices about whether to forgo “nice-to-have” care altogether, choices to postpone care due to cost, convenience and priority of necessity etc.  These choices make profitability and financial success immensely challenging for a hospital or health practice.  

And as if these new challenges aren’t discouraging enough, now you have to contend with regulatory headaches like ICD-10 implementation and the certain level of chaos that will ensue once it’s here.  Ok, ok, enough with the doom and gloom.  What choices do YOU have?  How can YOU stabilize an unstable situation?  It begins with having a plan of action for success and eliminating an environment of diluted focus on too-tactical tasks like managing ICD-10 implications.

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6 ways you can shift your focus from tactical to strategic:

  1. Initiate a steering committee made up of key stakeholders from each area of the practice that can report to executives on risks, costs and impacts associated with ICD-10 implementation.

  2. Give your organization a timeframe that will assist in keeping the focus on ICD-10 preparation. Prep time is precious and if you wait too long to assign deadlines for prep, you’re putting your organization in harm’s way.  It is incumbent for the CFO to continue pushing things forward.

  3. Optimize the health system’s fiscal health. It may already be good, however it needs to be even better to weather inevitable industry changes down the road.

  4. Optimize the patient experience by harnessing the health system to deliver what patients consider valuable.

  5. Refocus provision of care from “reactive” to “proactive”

  6. Be a partner to the operations executives. Strictly looking at numbers can be very limiting without a complete understanding of the underlying opportunity. Be transparent with the data and educate your team on the impact.

As CFO, your job has always been to focus on the sustainability and growth of the enterprise. Your role has clearly changed dramatically and will continue to do so as healthcare becomes more commoditized and consumer-driven. There is a compelling need for continued strategic growth, discovery of new ways to add value to your organization and maintaining relevance in a time when traditional norms are quickly outpaced by better ideas and ways of thinking.

If the consequences and CFO role reformation resulting from ICD-10’s fast approaching implementation has you burdened by fear or anxiety, consider partnering with an experienced company to ease some of your pain and handle revenue cycle activities so you can focus on the health of your company and personal success as a leader.

 

5 Ways To Prepare Yourself For ICD-10 Before Your Position Goes To Someone Else

Topics: ICD-10

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