CFOs can have a big influence in how their team operates and communicates.

The healthcare environment is packed with rapid change and uncertainty, and CFOs play a pivotal role in ensuring their organizations remain financially healthy and operationally resilient.

To get there, though, a resilient team is vital. A well-prepared team can not only adapt to changes but can also drive innovation and efficiency.

How can CFOs build a great team?

Crucial Communication

Clear communication is the bedrock of a resilient team. In a sector as complex and dynamic as healthcare, where regulations, technologies, and patient needs continuously evolve, CFOs must prioritize transparent communication at all levels of their organization. This involves not just top-down directives but also creating channels for feedback and dialogue among team members.

“It is my responsibility to make sure those managers have the tools, education and resources to find their answers about their budget, about what they can do to make money,” said Kyle Wilcox, VP of finance for MercyOne Medical Group.

Effective communication ensures that all team members understand the organization’s financial goals and challenges, aligning their efforts towards common objectives. Also, it cultivates a culture of trust, where employees feel valued and empowered to voice their ideas and concerns.

By implementing regular check-ins, updates, and open forums for discussion, CFOs can foster an environment where everyone is informed and engaged, leading to quicker and more effective decision-making.

Cultivating a Positive Organizational Culture

A positive organizational culture sustains resilience over time. A health system’s culture should be built on core values such as collaboration, accountability, and innovation. There are several strategies that CFOs can implement to promote these values.

First, CFOs must lead by example. A CFO should demonstrate a commitment to the organization’s mission and values in their daily interactions. When team members see their leaders embodying these principles, they are more likely to adopt them. Additionally, recognizing and rewarding behaviors that align with organizational values can reinforce an excellent culture.

CFOs must also be proactive about investing in professional development. CFOs can work with CEOs and other executives to provide team members with opportunities for training, mentorship, and career advancement. This may include investing in new technology to help staff streamline their work processes. These could not only boost their skillset but also show that the organization values their growth.

Adventist Health CFO John Beaman ensures he is recruiting the right physicians for his health system by creating opportunities for growth that are tailored to his organization.

“We've become more intentional around recruiting physicians that want to work for a not-for-profit health system or want to be in some of our communities that are very rural,” Beaman previously told HealthLeaders. “In fact, we have a rural residency program where we actually train physicians to be practitioners in a rural setting.”

Offering more opportunities like this leads to more satisfied employees, and also better staff retention. This investment fosters loyalty and encourages employees to take ownership of their roles, contributing to a more resilient team.

The expanded partnership comes at a critical time for care access in the city.

On Oct. 7 Kaiser Permanente, announced an expansion of its partnership with two Denver-based HCA Health Systems, HCA HealthOne Rose and HCA HealthOne Presbyterian St. Luke's.

Kaiser Permanente is the largest nonprofit healthcare organization in the state of Colorado, and HCA HealthOne offers patient care across 170 connected sites throughout Denver.

The expansion is a significant move towards expanding affordable healthcare options throughout Denver. Going forward, Kaiser Permanente's physicians will be able to provide care in HCA facilities, and Kaiser members will have access to a wider array of services.

This will make the patient experience of receiving specialized care more seamless. In addition to expanding the network of available healthcare providers, the new agreement also ensures that Kaiser members can access a wider array of services without compromising on quality.

Colorado’s Care Crisis

Uncompensated care has become a pressing concern for healthcare providers nationwide, but particularly for Denver Health, which is not a part of HCA HealthONE, but is the state’s largest safety net hospital. Denver Health has been grappling with a rise in uncompensated care costs, straining its financial resources.

By collaborating with HCA Health Systems, Kaiser Permanente could alleviate some of these pressures and improve overall healthcare delivery in Denver.

"The largest conversation that we've had is related to uncompensated care and the trajectory that we've seen at Denver Health since 2020," said April Audain, chief financial officer at Denver Health. "We went from about $60 million in 2020, to projecting $155 million for 2025."

In a separate initiative, Kaiser is also working to build replacement medical offices and renovate up to 29 medical offices in Colorado, expanding care access throughout the state.

Kaiser and HCA HealthOne employees have a strong history of working with each other in the metro Denver area, according to the press release. Kaiser members also have access to multiple Chicago-based CommonSpirit Colorado facilities through their expanded partnership.

"We're thrilled to offer our members greater choice, more convenience, and increased access in Central Denver, where they live and work," said Mike Ramseier, regional president of Kaiser Permanente in a press release. "We're confident that having our physicians and employees care for our patients in these hospitals will extend the value-based model of care that Kaiser Permanente has proudly delivered to Coloradans for more than 55 years."

The expansion aligns with broader trends in the healthcare industry, where integrated care models are becoming increasingly essential. By leveraging the strengths of both organizations, Kaiser and HCA can streamline operations, reduce redundancies, and ultimately provide a higher level of service to patients. This strategic alliance is expected to foster collaborative approaches to patient care.

Many providers have had it with the government plan, and dozens have already left it this year.

In the upcoming weeks the Senate Permanent Subcommittee on Investigations will release a report on Medicare Advantage following up on the concern with MA plans' prior authorization requirements, including the use of AI.

"Anybody following our hearings and public comments knows our findings will be very dramatic and powerful," Richard Blumenthal, a Democratic senator from Connecticut and chair of the subcommittee, said during a press conference on Oct. 2.

"What we have found is, essentially, there is no advantage for people in Medicare Advantage, all too often."

Last year, the committee sent letters to CVS Health, UnitedHealth and Humana to seek internal documents detailing how these payers managed claims, including their use of AI in the claims process. These payers, among others, have been accused of using AI to improperly deny care.

Recently MA plans have faced scrutiny from lawmakers over several issues, including prior authorization requirements, overpayments and misleading marketing.

As the tension around Medicare Advantage grows, CFOs are taking note not just of the current MA challenges, but also the ones that lie ahead.

According to Doug Watson, Allina Health, a CFO is at a huge disadvantage if they don’t understand how MA programs work at the insurer level.

Population Health & Medicare Advantage

HealthLeaders spoke with Rick Gundling, Senior VP for Content and Professional Practice at the Healthcare Finance Management Association (HFMA). Gundling says in today’s healthcare regulatory landscape, hospitals are going to have to figure out how to stay afloat with less.

“Medicare Advantage payments are not expanding, so you're trying to do this on a much tighter rope, and I think that causes a lot more pressure,” Gundling said.

Gundling also highlighted how these challenges will have greater effects on smaller rural health systems, and cost cutting strategies will need to be more aggressive.

“You're on a much tighter margin,” Gundling said. “You don't have the same financial resources.”

With a rapidly aging population, low birth rates, and Medicare Advantage reimbursement challenges, the healthcare environment has created a perfect storm for health systems and they will need to prepare for the intensive care of a senior population, including implementing different care strategies that focus on this population’s specific needs.

However, coupled with the reimbursement challenges, the industry has seen 27 providers ditch the plan this year so far. According to Gundling, the trend is leaving health systems with fewer options, turning hospitals into “de facto collection agencies.”

As CFOs search for long term solutions amid MA woes, Gundling says they will have to turn to Medicaid funding and look for efficiencies. Gundling says CFOs will need to ask themselves: “Should we narrow down the types of services that we're providing if we can't afford it?”

This will go beyond cost cutting but will involve strategic look at how health systems provide care and understanding the regulatory structure of insurance.

Adventist Health CFO John Beaman explains how he separates strategy from financial ratings.

A credit downgrade can significantly impact a hospital’s financial health and operational viability. For healthcare CFOs, navigating this turbulent terrain requires strategic foresight and proactive management.

So far this year, 19 health systems have received downgrades from Fitch Ratings or Moody's Investor Service in 2024. The challenges leading to these downgrades vary and range from increased debt and revenue loss, to declining volumes and labor expenses.

Adventist Health’s downgrade (from “A” to “BBB+”) was primarily driven by a big leverage increase that the system is taking on, partially to support the acquisition of two hospitals from Dallas-based Tenet Healthcare.

HealthLeaders spoke with Adventist Health CFO John Beaman about what it means for a hospital to receive a downgrade.

“I want to reinforce the importance of rating agencies. I do find my interactions with them valuable when we talk to them at least every year,” Beaman said. “[But] they have a good objective view of the entire industry.”

CFOs should strive to not villainize rating agencies but welcome their objective view of the organization.

 “[A rating] may or may not be the complete story of the journey,” says Beaman. “so a downgrade could be on the path to a long term sustainable position that leads back to a higher grade over time. I don't see the downgrades, per se, as a testament of the long term, sometimes they definitely are, but not always.”

Sometimes, Beaman says, it’s okay to intentionally go for a new strategy or operation even though it may result in a downgrade. Long-term stability should be the key piece of the puzzle.

“I separate strategy from the ratings because there are times where a system may make an intentional decision,” he says, adding that while the decision may result in a downgrade, it may be stronger for it in the future.

Beaman sees these ratings an “objective look at the current position.” He also believes CFOs must find the balance of realizing that the rating indicates the journey the system is on, and being confident in where they are steering the system to be in the next three to five years.

Come Back with A Plan

While a credit downgrade may not be the end of the world, it still requires a focused strategy to get back on track. There are a number of items that can result in a downgrade, such as a diminished financial or enterprise profile, staffing challenges, rising operational costs, fewer admissions, and management turnover.

To regain stability and avoid future downgrades, CFOs need to have a clear picture of their financial performance. Ensure there are clear financial metrics in place, as well as monitoring for performance against best practice benchmarks.

CFOs should also look for performance gaps are in their organization so they have a clear understanding of where the core issues lie. Consider assessments from third parties to point out complicated challenges. These assessments can also show improvement opportunities for the organization, and from there CFOs can create a detailed plan to tackle each issue.

Lastly, don’t forget to leverage technology. Many CFOs, including some HealthLeaders Exchange members, have expressed how implementing automation within their revenue cycle has helped significantly. Don’t overestimate a challenge, the solution could be simpler than initially expected.