3 Challenges CFOs Must Face Head On

With the HealthLeaders 2024 CFO Exchange on the horizon, labor costs and organizational culture top the agenda.

From soaring labor costs and labor shortages, to inadequate payment rates (not to mention an impending recession), CFOs have much to tackle this year.

But what is top of mind and how can CFOs get support? The HealthLeaders 2024 CFO Exchange, which takes place August 26-28 in Virginia, will bring together CFOs from health systems all over the country to network and brainstorm their best ideas together.

There’s what CFOs will be discussion:

Reducing Costs

Going back to basics, reducing costs is always top of mind for CFOs. But the same old strategies aren’t optimal anymore, and they will need to pivot to find sustainable long-term solutions.

With inadequate payment rates adding to financial risk, CFOs will need to consider investments and growth opportunities carefully and examine what expansion avenues are viable. Labor costs and shortages are also in this mix, and they’ll will have to strategize where they improve labor woes and cut costs. For example, a part of HCA’s Q2 success involved cutting contract labor costs by 25.7%.

CFOs will also need to get creative in where they cut costs. Often clinical expenses are under the microscope, but examining nonclinical spend can have a big impact as well if they’re willing to dig deeper into smaller expenses. Some health systems have even looked into filming opportunities to reel in some extra revenue when financials are being squeezed.

Examining Physician Burnout and Culture To Drive Success

Physician burnout may not necessarily seem like a CFO’s issue, but it undoubtedly has a big impact on financial performance. One study concluded that physician turnover due to burnout costs health systems an extra $260 million each year.

“I think we need to start being more thoughtful about the business and finance structure of our organizations and how it impacts physician burnout, but also how it impacts our business models and the way we staff,” said Kyle Wilcox, vice president of finance for MercyOne Medical Group and a HealthLeaders CFO Exchange member.

While this challenge obviously will not squarely fall on a CFOs shoulders, they can certainly help. They can collaborate with CMOs to determine how physician burnout is affecting their health system and brainstorm the best appropriate solutions. Studies show that fostering fortitude for physicians can have a lasting impact without big costs or interventions. When physicians feel supported, the whole system works better from the ground up.

Physician support is just one part of the culture picture for health systems, and CFOs shouldn't hesitate to get involved. They should examine where they can improve relationships with colleagues to boost operations for the whole organization. From close collaboration with the revenue cycle team, to forming a strong alliance with CIOs, when all parties focus on understanding the initiative purpose and expected outcomes, they can ensure they are working from the same playbook.

Ambulatory Care Strategy

One challenge that CFOs will discuss at the HealthLeaders CFO Exchange is ambulatory care. In the last few years, private equity interest in the ambulatory care space has increased. Both Surgery Partners and Amsurg, two of the biggest ambulatory care chains, have private equity ownership.

“One topic I'd like to lean into with everyone with ambulatory strategy is private equity and very large groups that lean more into the ambulatory type work,” said Wilcox. “In some states, there's no requirement for a certificate of need, so I'm just interested to see what's happening across the country in this aggressive ambulatory strategy, both for private equity and the health systems.”

The HealthLeaders Exchange is an exclusive, executive community for sharing ideas, solutions, and insights. Please join the community at our  LinkedIn page. 

To inquire about attending a HealthLeaders CFO Exchange event and becoming a member, email us at  exchange@healthleadersmedia.com.