What it Means to be a Digital-First CFO in Healthcare

Many healthcare organizations don't achieve the full benefits possible from their technology investments.

Technology must play a significant role as hospitals and health systems work to streamline operations, reduce costs, bolster revenues, and improve the quality of patient care.

Today’s healthcare CFO needs a strong understanding of the role, benefits, and limitations of the technology they are investing in to be sure these tools are properly aligned with their business and patient experience goals. In short, these organizations need a digital-first CFO who will automate processes that used to be done manually.

"I've been on a mission to do that for a long time as my role and responsibilities have evolved in the organization," says Garrick Stoldt, CFO of Saint Peter's University Hospital, a New Brunswick, New Jersey-based 478-bed hospital with $650 million in net patient revenue. "In addition to being CFO, I'm also part of the hospital’s planning process and am involved in all of the strategy decisions."

Stoldt sees investments in technology as a key part of the organization's growth strategy and has enhanced this digital strategy in several ways. This was partly to just maximize operations and enable the organization to become more efficient. But Stoldt says the need increased for him personally as he assumed new roles, such as two years ago when he was assigned to take over the health system's supply chain.

"Although many areas of the hospital have advanced in a lot of ways from a digital process perspective, that particular area was well behind, " Stoldt says. "So we are more heavily integrating new systems to operate at a much higher level."

Getting the full benefits from technology investments

"The first goal is to obviously get it up and running, at least in a rudimentary fashion," he says. "It takes a long time for institutions to get from basic use to a much higher level where you are actually getting value from the functionality that different technology brings you."

"One of the other things I've done in the areas that report to me is to take what we have, and really expand it in terms of its capability," he adds. "Whatever software, digital work area, or technology we're working on, we want to become a high-end user."

While this might seem like a logical goal, Stoldt says many healthcare organizations don’t achieve the full benefits possible from their technology investments.

"For years the healthcare industry has lagged the commercial world in terms of technology use," he says. "If you look at look at the finance industry, and you look at Wall Street, they're using high end technologies and they have been using them for a much longer period of time than the healthcare field."

As a result, Stoldt says the healthcare industry is still lagging behind many others when it comes to the effective use of technology.

"We've really been lagging. We keep adding new components," he says. "But our integration of services with technology has really lacked. The applications we have don't do what they're supposed to do. The purpose of technology is to take burdens off of employees. But we never really get that far, because the software we're using doesn't meet all of the needs."

As disappointing as this news is, it's even more disappointing to recognize this has been the case for some time.

"I've seen this every place I've been in my career, and I've been in healthcare over 40 years," Stoldt says. "We get new technologies in. We get rudimentary stuff done. We move up a little bit in terms of efficiency. But we don't take it to the next level. There's no one driving the train to get to really be high-end users."

Using technology to better serve needy populations

Although Saint Peter's Healthcare is doing well from a financial perspective, any gains in efficiency are really more about better serving the local community than driving up the bottom line.

"I'm in my 18th year here at Saint Peter's, and we have a special mission," Stoldt explains. "We are sponsored by the Archdiocese, and we take that mission very seriously. We've never made huge margins. Although we're doing better now than we've ever done. In fact, 2021 was our best year ever by multiples."

"We're also doing quite well in 2022, while the rest of the industry is basically down about 3% in revenues," Stoldt says. "As to our revenue for the first quarter, we were actually up about five-and-a-half percent. So, we're bucking the trend from that perspective."

To keep revenues in line, Stoldt says Saint Peter’s has a unique payer mix.

"We're about 50% commercial, 25% Medicare, and 25% Medicaid based," Stoldt explains. "We also have a substantial footprint on taking care of the youngest population in New Brunswick. Where we are located has the fourth highest percentage of population below the poverty guidelines. So, we have a very large footprint on taking care of underserved populations."

Saint Peter's is expanding its services in that area as well.

"Because we are doing better financially, we are able to allocate resources to take care of a higher percentage of the population that doesn't have easy access to care, " he says. "That would be Medicaid, Charity care, and self-pay patients. So, while our margins are good, we're still putting more in to take care of the underserved population, which is part of our mission."

How a CFO can better embrace technology

Although Stoldt confirms that he has championed technology investments for a few years, he insists that he is very pragmatic regarding what he advocates investing in, and for what end game.

"Yes, I embrace technology. And if I embrace change, and technology brings change from that perspective, I would say yes, okay," Stoldt says. "But at the same time, there's so much technology being thrown at us as an industry, that I am very skeptical. There are a lot of snake oil salesmen out there that give you products that they say will do certain things, but they don't."

As to his level of understanding of technology tools, Stoldt confirms that he is "not a coder I don't want to know what the technological aspects are that make things work. But I need to know the architecture of it as to how it's going to integrate into what we have."

Stoldt sees his role as understanding what tools are out there, what they can do to improve business processes, operational efficiencies, revenue generation, and patient engagement and care. That has meant a significant investment in automation technologies.

"We just installed a brand-new technology that went live this month (June) in the area of what we call resource advisors. These are the people who take patients that come in that have nothing, get them registered on Charity Care, or Medicaid, or even on the exchanges," Stoldt says. "This software is an automation process. It allows every registration that has the designation of not having insurance, but otherwise has what it needs to qualify for Charity Care or for Medicaid."

This investment is typical of where Saint Peter’s places its priorities for technology investments – ones that directly impact the community it serves, and which have special circumstances.

"My responsibility is to make sure the institution is going in the right direction," Stoldt says. "Looking out five years from now, where do we have to be as an organization?"

"There are two types of managers and directors in healthcare," Stoldt says. "There are the ones that want to go to the next level, and others that just want to maintain the business. Every organization has both types. What you really need to do is get rid of the people that are maintainers and change them to people who have vision to advance the organization."