Traditional finance strategies and isolated decision-making won't cut it.
The role of the healthcare CFO is evolving.
No longer just the financial gatekeepers, today's CFOs are thrust into an unforgiving landscape where the stakes couldn't be higher. With the entire fiscal health of the organization resting on their shoulders, they must make critical decisions in the face of economic turmoil, shrinking margins, and escalating labor costs. And in the rare cases when hospitals do fail, the CFO will be in the conversation about why.
Is this responsibility too big for one person? Many healthcare CFOs are burning out and leaving, crushed by the weight of expectations. On top of this, CEOs are now asking themselves if it's too risky for the entire financial wellbeing of a healthcare organization to rest on one person.
Teamwork
A key factor in the success of the modern-day CFO is a strong, dedicated team. CFOs will need close-knit collaborations with not only executive staff, but also clinical staff. With so much of healthcare happening outside the finance office and in direct care, CFOs must have an understanding of the clinical challenges and technology needs to truly drive financial success for the health system. Clinician input is essential to make the most informed decisions.
For executive staff, CFOs need to know where their colleagues from other departments can help. This includes collaborating with CTOs and CIOs to determine the best tech investments, collaborating with CMOs and CNOs for insight on clinical challenges, working with RCM teams to know where inefficiencies lie, and partnering with the CEO to build a comprehensive roadmap for the organization.
"I have to be able to push back; I have to be able to develop that trust before I let go of that authority and power," says the CEO of Bristol Hospital, Kurt Barwis. "And more importantly, I have to instill a really strong understanding that, 'No, you're not just going to make those kinds of decisions in isolation.'"
Soft Skills
One of the biggest foundational pillars of smooth collaboration is strong communication. When CFOs can effectively communicate the ins and outs of their financial plan for the organization, that's when other departments and colleagues can provide operational and clinical insight.
CFOs must also be able to establish strong trust with their colleagues, and that flows both ways. Staff shouldn't feel like executives are hovering over their shoulders, and executives shouldn't feel the need to do so.
When CFOs demonstrate clear communication and trust, their leadership role will shine through and garner the faith and reciprocated trust of their staff.
Don't Fear the Future
The skills a CFO needed 10 or 20 years ago are not the same today. With an increasingly tense economic landscape that includes inflation, labor market woes, regulatory pressures and growing payer disputes, a modern healthcare CFO must be well-versed in leadership, (including all the soft skills that accompany it,) operational oversight, and strategic operational vision.
For more insight into what's needed to succeed as a modern CFO, check out this cover story.
Marie DeFreitas is the CFO editor for HealthLeaders.
KEY TAKEAWAYS
The CFO role has evolved into a much more hands-on position.
CFOs must know when collaborations with staff can help.
Strong communication and establishing trust amongst staff will be key for future CFOs.