CFOs are no longer 'bean counters.' They can serve as role models on driving culture, and how they can improve employee well-being and satisfaction, says one finance expert.
The role of the hospital CFO has evolved greatly, broadening the position's responsibilities to go beyond balancing the budget. In addition to financial wellness goals, CFOs now lead efforts that can help grow an organization through its labor, security, equality, and healthcare strategies.
The Deloitte Center for Health Solutions has released findings from a recent survey of U.S. finance leaders at health systems and health plans to find out how CFOs are taking on the challenges of their ever-evolving roles and overcoming them.
Some of the key findings from the survey include: Talent is CFOs' main concern, as is finding workforce solutions such as automation and upskilling. Additionally, four in five CFOs want to lead organizational efforts to address sustainability, climate, and health equity, and nine in 10 CFOs have defined their organizations' ESG strategy but admit there's still work to be done on implementation.
HealthLeaders recently connected with Tina Wheeler, U.S. healthcare leader for Deloitte to discuss the evolution of the CFO and the findings from the Deloitte survey.
HealthLeaders: How has the CFO position changed?
Tina Wheeler: We used to think of a CFO as the bean counter, who just reported out on the numbers, and that was their purview, but they're almost becoming stewards of the organization, and they're getting involved in a lot of different areas. It used to be that CFOs weren't involved necessarily with workforce issues or shortages. But because it's such a significant percentage of their expense line item on their income statement, they're having to get involved and try to be a solution and figure out how to manage this.
When you think about the post-COVID-19 workforce dilemmas around in-person versus hybrid versus virtual, CFOs can be role models to show how in their finance shop—at least for the back-office functions—how they can drive culture, but also improve employee well-being and satisfaction by trying to be flexible and nimble and try to determine that balance.
We used to always say that was just on the HR side of things, but CFOs are having to get involved in that piece of [the business]. As stewards of finance and capital investments, CFOs are influential when it comes to deciding to build a new hospital or invest in technology. They are such a strong voice in the C-suite. Thinking about things strategically, digital transformations, coupled with the workforce, I think their roles have significantly expanded in that regard.
HL: What did the research reveal about the status of healthcare finance?
Wheeler: It is a mathematical equation. Health systems can only change their prices once a year. So, they're stagnant. But the unprecedented increase in cost in this inflationary environment, whether it's labor costs, nursing shortages, or supply chain, kind of all compounded and caught up to the health systems. So, CFOs are trying to find solutions to figure out how they can manage their way out of them.
HL: What are some of those solutions?
Wheeler: During COVID, a lot of health systems had to put the brakes on investments, whether it was in capital or in technology, and now that's become a business imperative. They must go through a digital transformation. Let's look at the workforce, as one example. If you have shortages and you can't hire enough people, how do you use artificial intelligence or robotic process automation to solve that challenge? We've heard stories about how nurses want to spend their time caring for patients; they don't want to be dealing with electronic medical records or taking notes. So how can you ease that burden, so that you can improve employee satisfaction and try to avoid burnout? Those are a couple of tactics from a workforce perspective.
If you look at the history of health systems and how they came together, a lot of times it's pushing a bunch of different hospitals with a lot of different IT systems together, and they never harmonized those IT systems across the spectrum of this new, large health system. A digital transformation and the harmonization of the system is key. So is looking at your ERP so that you have better data for better decision-making so you can be nimbler, especially when you're facing financial challenges.
HL: In what areas are hospital and healthcare CFOs looking to make greater investments?
Wheeler: Digital transformation, so streamlining their ERP system and focusing on cybersecurity. There are so many points where technology is touching their systems. Consumers of healthcare are tech-savvy. They want to have a welcoming front door that they can access with their iPhone or whatever smartphone they have. So, then it becomes about having enough cybersecurity that [makes] you feel comfortable and safe. CFOs recognize how important this is and that is resulting in more IT security investment, coupled with continued digital transformation.
HL: What do you think CFOs will be focusing on over the next six to 12 months?
Wheeler: Margin pressures, how to enhance revenue, how to control costs, and how to deal with the workforce. They'll also want to focus on evolving their digital tools, and digital capabilities, and enhancing the patient experience while improving efficiency and driving down costs. Watching the journey that healthcare organizations have gone on related to health equity, sustainability, or ESG will be top of mind.
Amanda Schiavo is the Finance Editor for HealthLeaders.