Community and Profitability: CFOs Weigh in on Service Line Strategy

Service line performance and the role of local communities were challenges highlighted during HealthLeaders CFO Exchange.

The relationship between community engagement and financial sustainability were the focus of this year’s HealthLeaders CFO Exchange.

CFOs from leading health systems gathered to discuss how nurturing community connections can not only enhance patient care but also drive profitability through strategic service line development.

The Community-Centric Model

One of the key themes emerging from the discussions was the growing recognition of the community-centric model. CFOs are realizing that integrating healthcare services with community needs goes beyond just providing care—it involves actively participating in and investing in the local ecosystem. Hospitals are not just healthcare providers but vital community partners and their role extends to improving overall community health.

Just as the CFO role is evolving to envelop more strategic business decisions dependent on stable organizational relationships across all departments, health systems must recognize the evolution of community impact on their services, especially the bottom line.

Exchange members discussed situations when they took away an unprofitable service that didn’t see much use and how that decision often backfired. Sometimes CFOs saw a large portion of their patient volumes reduced across all other services due to the absence of that singular service.

The advice here? Don't be too hasty with service line decisions. Consider partnerships and other options before deciding to cut a service line. If a service is not highly profitable, consider having it at one center to drive patients to that location. Also, continually evaluate service lines so the profitability or losses are clear before it grows into a larger challenge.

CFOs encouraged each other to think about how each service interacts with other service lines, they are often not completely standalone services. They also advised against diving into full programs for additions to service offerings. Simply making additions to existing programs can become a draw.

Driving Productivity

The CFOs also addressed decisions around outsourcing functions. CFOs must understand the impact of the organizations in their community and why building those relationships is crucial. By outsourcing some functions that a health system performs well, it may help to alleviate some of the stress in managing that extra program.

But even with outsourcing, CFOs said, be sure to fight to keep top staff in place so there is less of a pain period, and they understand the basic levels of your health system.

The underlying question in this discussion was: how can CFOs drive productivity? The consensus was it’s not so much about shutting down services but examining how they can become more efficient. A key component to this is having community partners in place to ensure there is no lapse in care.

As the discussion wrapped up, it was clear that the relationship between community and profitability is both complex and promising. By focusing on community-centric models and strategic service line development, hospitals can achieve a dual goal: enhancing patient care while ensuring financial health.

The discussions underscored a future where healthcare systems are deeply embedded in their communities, with financial strategies aligned to support both public health and organizational sustainability.

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.