3 Areas Where CFOs Can Step Up in Organizational Responsibility

CFOs are taking on more organizational responsibility as their role evolves, but where are their top concerns as they move forward?

CFOs are fighting battles in different areas of healthcare, but there are three areas that continuously top the list: private equity competition, payer strategy and the struggle holding departments financially accountable for outcomes. The HealthLeaders CFO Exchange illuminated how CFOs are dealing with these top three concerning topics and what strategies are most viable.

Private Equity Competition

Private equity has been a major concern in healthcare for some time now, and PE firms have now turned their attention to going after specialty care physician groups. These firms see lucrative opportunities and high margins in specialty care services and often enter the market to make a quick profit and then swiftly exit. For health systems, this can spell trouble.

PE practices are usually able to proceed with lower operational costs because of streamlined and focused management on the one specific area, something hospitals can struggle with when focused on larger operations.

Some CFOs agree that one of the best strategies to compete with PE firms in this area is partnering with technology companies that can add vital tech to help boost service lines. Adding automation that can help physicians with their day-to-day workload can be a big attraction for physician groups. Another tactic is loan removal/forgiveness, which can be a huge driver of physicians to a health system.

Another less popular strategy that CFOs also discussed is operating at a minor loss in some services, just enough to scare private equity away.

Holding Departments Accountable

The CFO role is evolving to include more strategic decision making around the entire organization. To do this, CFOs will need to reexamine where they currently stand in the hierarchy of their health system and how they can lead in areas they may not have thought they would have to.

During the Exchange, CFOs shared their struggles of holding each of their departments financially accountable. One key challenge here is trying to determine who exactly is responsible for outcomes within an organization, whether it’s managers or leaders. Clarifying this throughout the health system can help CFOs maintain organizational structure and trace financial challenges to the root issue.

Combatting Payers with Specialty Drugs

Lastly, CFOs are having issues with payers regarding specialty drugs and their soaring popularity. Specialty care drugs for weight loss and diabetes have seen a huge surge and health systems are feeling the pressure to cover them. CFOs need a strong adoption plan for these drugs and must strategize to beat payers to adoption where they can.

CFOS at the exchange discussed using ASP+ plans to help with initial costs, along with using a 340B plan to help with margins.

With challenges swooping in from every corner, CFOs will need to determine where is best to strategize and spend time on solutions to come to sustainable positive outcomes for their health system.