To maximize tech value, CFOs need to examine the specific challenges facing their health system.
As CFOs are called upon to do more than just manage margins, they are expected to be instrumental in improving both clinical and operational outcomes through thoughtful financial acumen, this includes investing in the right technologies to support the organization's goals.
Check out this infographic for a quick guide on making the right tech investments as a CFO.
What are CFOs saying about these specific challenges?
CFOs today are facing many challenges. Here’s how some of the healthcare industry’s top financial executives are responding.
Payers
"It's gotten worse, there is no alignment," Julie Soekoro, CFO of Vitruvian Health Care System, said at the HealthLeaders CFO Exchange. "We are not growing in the same direction when they have margins as a goal."
When it comes to payers, CFOs are livid. But they're also exhausted and say they don't feel like there are many options to retaliate against payer tactics. During the HealthLeaders CFO Exchange, executives lamented that they don't know how to collaborate with payers or advocate against the stances that payers are taking. Many said they feel that payers typically do not have a sense of what is happening in the market and don't forecast very well, which is why payers are seeing less profits this year.
Generally, CFOs said they:
Are feeling a little downtrodden by payer negotiation tactics and contracts.
Want to educate community officials and state governments on payer challenges.
Need better cost-cutting strategies just to stay afloat.
Tariffs
Tariffs are another massive worry for CFOs, especially given the fast-paced back-and-forth of the current administration on implementing them. Brad Hipp, CFO and vice president of Tucson Medical Center (TMC), said his organization is working with its GPO to take steps to ensure access to supplies at the highest risk of disruption and financial impact. This includes setting up a "cross-functional tariff command center to track developments, coordinate responses, and provide real-time insights."
"Although disruptions seem imminent, it will be the facilities that have the infrastructure to act swiftly and thoughtfully on how to drive organizational cost down to offset any tariff impacts that will weather the storm as we did in 2019,” Hipp said.
Technology
Brian Devine, CFO of Allegheny Health Network, spoke at the CFO Exchange about creating a long-term business plan for AI and new technologies.
“Utilizing AI and new tech for clinicians and other areas like RCM has to be accompanied by a strategic plan,” he said. “Don’t invest just to say you did it. How do we approach a business plan around these types of technologies?”
Medicaid Cuts
Many healthcare executives are concerned about potential Medicaid cuts.
Brett Tande, corporate executive vice president and CFO of Scripps Health, recently visited Washington to voice his concerns.
"Spent time on Capitol Hill with fellow health system CFOs advocating against proposed Medicaid cuts,” he said in a LinkedIn post. “These potential reductions would have a serious impact on access to care for millions and result in the closure of vital services across the country."
Teamwork and Collaboration
Laurie Beyer, CFO of Greater Baltimore Medical Center, shared when her team experienced a cyberattack and quickly had to come together to resolve it. Agility, Beyer knows, is an essential factor to building a capable team, and can make all the difference when times get tough.
"Make sure that you've got the right team, establish relationships with your peers, [and] be available and be present," she said. "It's important to establish relationships so that when you do have a crisis that you can come together and solve it quickly."
The GOP's new budget bill slashes Medicaid funding, putting hospitals at risk and threatening coverage for millions.
In a very close vote (215-214), the U.S. House of Representatives has passed President Donald Trump's "big beautiful bill,", a sweeping budget reconciliation package that proposes massive cuts to Medicaid.
The bill now heads to the Senate, where more debate and potential adjustments are expected.
A reduction of this magnitude could force facilities to scale back services, delay capital projects, or even close their doors. The Federation of American Hospitals has warned that such cuts would be "an existential threat" to safety-net hospitals that serve low-income and uninsured patients.
Medicaid is a critical revenue stream for hospitals, particularly those in rural and underserved areas. April Audain, CFO of Denver Health, noted at the recent HealthLeaders Exchange that "50% of Denver Health's patient base is Medicaid."
Many hospitals may face increased uncompensated care costs as more patients become uninsured or underinsured. Proposed cuts to the Supplemental Nutrition Assistance Program (SNAP) programs could also leave thousands of patients in additional financial distress.
Harming Patients
The proposed Medicaid cuts disproportionately affect vulnerable populations, including seniors, individuals with disabilities, and low-income families. Programs like home and community-based services (HCBS), which support long-term care for the elderly and disabled, are at risk. Eliminating or reducing HCBS funding could lead to institutionalization for many individuals who currently receive care at home, disrupting their lives and increasing healthcare costs.
The bill also introduces new eligibility requirements, including work mandates and increased out-of-pocket costs for beneficiaries above the federal poverty line. These changes could lead to approximately 7.7 million individuals losing coverage, according to the Congressional Budget Office.
Additionally, the bill bans Medicaid and CHIP from covering gender-affirming care for individuals of all ages, a move that has faced significant criticism from LGBTQ+ advocacy groups.
Medicare could also see about $500 billion in offsets to pay for the bill's $3.8 trillion in tax cuts.
For CFOs: Strategic Considerations
CFOs should adopt strategies to navigate impending financial challenges:
Scenario planning: CFOs can develop multiple financial models to assess the impact of various Medicaid cut scenarios. This includes estimating potential revenue losses and identifying areas where cost reductions can be implemented without compromising patient care.
Diversification of revenue streams: CFOs can explore alternative funding sources, such as expanding private insurance partnerships, exploring revenue opportunities through telehealth, or even seeking philanthropic support, to reduce reliance on Medicaid reimbursements.
Advocacy and collaboration: CFOs can use their voice and engage with hospital associations and other stakeholders to advocate for the preservation of Medicaid funding. Collaborative efforts can amplify the voice of healthcare providers in influencing policy.
Operational efficiency: CFOs can collaborate with CTOs to invest in technologies and processes that enhance operational efficiency, such as modern EHRs and data analytics tools, to reduce administrative costs and improve patient outcomes.
Patient resources: CFOs can also ensure that programs and resources like financial counselors and public benefit coordinators are in place to help patients navigate high care costs. By investing in navigation resources that help patients access alternative coverage, such as ACA marketplace plans, community health initiatives, or local subsidies, hospitals can maintain continuous care while helping patients avoid falling through the cracks.
Community engagement: CFOs can strengthen relationships with their communities. Community support can be instrumental in advocating for policy changes and securing alternative funding sources.
As healthcare technology grows more complex, financial executives need to pay attention to how much it costs.
Whether a health system is acquiring new technology or maintaining or upgrading its existing tech platform, a key point of concern for CFOs is technical debt. Budgeting for new expenses can be tricky in this economy, yet putting off a new acquisition or delaying needed maintenance could have a negative impact on security or clinical care.
While the sheer multitude of technology in a hospital or health system can lead to redundancies and vulnerabilities, consistently maintaining and modernizing them can improve security and help manage long-term costs. That's why experts advise developing a consistent process for managing technical debt
Strategies for Managing Technical Debt
CFOs need to collaborate with CTOs and CIOs on technical debt. They must evaluate where the organization stands, and what amount of technical debt is acceptable, depending on challenges, vulnerabilities and the balance sheet.
To get started, CFOs need to consistently track the performance of their IT systems. Consider creating a small task force, along with benchmarking, to evaluate IT systems and identify any performance gaps or slowdowns.
Agility is a key factor healthcare leadership needs to be able to pivot quickly. CFOs should meet with other executives, especially CIOs and CTOs, to assess what needs to be done and home much it will cost.
Trying to tackle every upgrade or replacement at once can be overwhelming, and costly. Instead, consider staggering these upgrades or replacements over a specified amount of time, and developing protocols for which projects need to be done first and which can be spaced out over time.
Additionally, if a health system works with IT vendors, it's important to establish what tasks vendors can and should handle and what projects should be handled internally.
The Cost of Technical Debt
The consequences of not staying on top of technical debt are extensive, including reduced operational efficiency, higher probability of errors, regulatory and compliance challenges, system downtime and security risks, rising costs, and compromised care quality.
CFOs who have experienced the penalties for not upgrading or replacing their IT systems know that the delay isn't worth it.
Laurie Beyer, CFO of Greater Baltimore Medical Center, shared when her organization experienced a cyberattack in 2020 due to outdated systems.
"It happened because we had old equipment that hadn't been updated, and the [hackers] could get in easily," Beyer said. "So we had to update all the equipment, get it up to 2021 standards."
Sergio Melgar, CFO of UMass Memorial Health, shared when he knew it was time to switch to a modern EHR system.
"A lot of these bad habits that have been formed by the individual silos could basically begin to be eliminated," Melgar said. "You have to modernize. If you stay current, you're going to ride this to success."
How to Measure Technical Debt
When evaluating where a health system stands with technical debt, CFOs need to decide whether it's more expensive to maintain technology in its current state, upgrade, or replace the system altogether.
On one hand, a health system could move quickly to upgrade, acquiring extensive debt but staying ahead of competitors and positioning the organization as a leader in the industry. On the other hand, a health system could move slowly, spacing its technical debt out and focusing on incremental improvements, thus reducing financial burdens. It's up to the CFO to determine which route is best for the organization.
CFOs are strategizing to protect their supply chains from drastic price hikes and product shortages.
At the recent HealthLeaders CFO Exchange CFOs were both "terrified" and eager to discuss: tariffs. They talked about their concerns for supply costs and how they will navigate potential vendor shifts and cost hikes.
Strategizing for tariffs
"Hope is not a strategy," one of the executives said. While strategizing for tariffs is difficult because of so many variables, they agreed on a few proactive steps:
-Examine inventory; stock up to offset anticipated shortages.
-Monitor any variances in the supply chain, even minor changes.
-Maintain good communication with distributors and ask their opinion on where they believe shortages may occur.
-Create tariff reaction teams or government groups to stay on top of changes.
-Use companies that monitor healthcare vendors to predict who will be affected by tariffs and by what percentage.
What CFOs are saying
Many Exchange members said they did not have a formal plan to combat tariffs, and they expressed concern that the potential impacts could be serious.
Working with vendors during this time is hard, members said, as they don’t often announce price increases in advance, despite being tied to a contract. Some CFOs said they have had success using companies to monitor their supply chain and hold vendors accountable.
Brad Hipp, CFO and vice president of Tucson Medical Center (TMC), said his organization is working with its GPO to take l steps to ensure access to supplies at the highest risk for supply disruption and financial impact. This includes setting up a "cross-functional tariff command center to track developments, coordinate responses, and provide real-time insights."
"By partnering with our GPO on mapping of manufacturing we can target the necessary steps to increase inventory of these specific supplies to mitigate risk," Hipp said. "Although disruptions seem imminent, it will be the facilities that have the infrastructure to act swiftly and thoughtfully on how to drive organizational cost down to offset any tariff impacts that will weather the storm as we did in 2019."
Tariffs often manifest in the form of shortages first, then price increases, so stocking up on potentially affected products and equipment could help. But forecasting exactly where to stock up is still tricky. One area of concern is orthopedic surgery, which could see price increases for implants;
The Industry Snapshot
The healthcare industry is very concerned about the potential effects of tariffs and how to budget for them. Tariffs on goods from Canada, China and Mexico are expected to increase healthcare costs by at least 15% this summer, according to a survey by Black Book Research.
The Trump administration has enacted the following tariffs, as of today:
10% universal tariff Went into effect on 5 April
25% on cars and auto parts (with some exceptions) Went into effect on 3 May
30% tariff on Chinese imports (with some exceptions) Went into effect on 13 May
25% tariffs on goods from Canada and Mexico, not covered in the USMCA Went into effect on 4 March
Paused Tariffs:
"Reciprocal" tariffs, until 8 July Paused on 9 April
Higher tariffs on Chinese goods, until 12 August Paused on 13 May
Trump has also proposed tariffs on pharmaceuticals, (which are usually exempt).
The HealthLeaders Exchange is an 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, email us at exchange@healthleadersmedia.com.
Tariffs, workforce and succession planning are on CFOs’ minds.
The recent HealthLeaders CFO Exchange gave healthcare CFOs an opportunity to vent about their biggest challenges and collaborate on strategies to address them.
Payer challenges are growing. Here's what CFOs are saying, and what they can do.
Payer denials are a constant and consistent challenge for CFOs. And they're not going away any time soon.
At the recent HealthLeaders CFO Exchange, financial executives from health systems and hospitals across the country talked about payers and their tactics, where the nuanced challenges lie, and if there is any hope for change.
Lay of the Land
According to an Experian report, from 2022 – 2024 the number of providers who said denials are increasing jumped from 42% to 77%. A Kaiser Family Foundation analysis, meanwhile, found that ACA insurers typically deny about 20% of claims.
Additionally, market share in each state plays into how much payers reimburse health systems. Insurance companies have a stranglehold on the market, and CFOs know it.
A study by AAMC found that the largest systems, on average, have far less market share (a combined 43% of the market share in each state), than the top three large insurers, which collectively hold an average of 82% of the market share in each state. This imbalance drives down the amount that insurers are willing to reimburse hospitals and health systems for patient care.
What CFOs Are Saying
"It's gotten worse, there is no alignment," Julie Soekoro, CFO of Vitruvian Health Care System, said at the Exchange. "We are not growing in the same direction when they have margins as a goal."
CFOs are livid. But they're also exhausted and typically don't feel like there are many options to retaliate against payer tactics. During CFO Exchange roundtables, executives lamented that they don't know how to collaborate with payers or advocate against the stances that payers are taking. Many said they feel that payers typically do not have a sense of what is happening in the market and don't forecast very well, which is why payers are seeing less profits this year.
Generally, CFOs said they are:
* Feeling a little downtrodden by payer negotiation tactics and contracts.
* Want to educate the community and state government on payer challenges.
* Need better cost cutting strategies just to stay afloat.
Contracts
CFOs at the Exchange stressed the need for better negotiations, which would likely lead to contracts with more favorable terms. But they're running up against aggressive tactics.
CFOs could consider taking a negotiation class to bolster their skills, as suggested by Bristol Hospital CEO Kurt Barwis. A background in finance typically doesn't cover communication and negotiation skills, and sharpening their skillset here could help--not only in payer negotiations, but also in day-to-day communications with staff and other executives. CFOs should get curious and ask themselves: What does it take to be a confident, persuasive communicator?
Bearing With It: Cost-Cutting Strategies
To keep up with payers, CFOs are looking more closely at cost-cutting strategies and other methods of freeing up capital. Executives at the Exchange said strategies that have worked for them include subleasing properties and selling real estate, financing energy management such as HVAC, and other areas of non-clinical spending like landscaping and signage.
Long-Term Strategies: Reform Advocacy
CFOs at the Exchange said they want to educate their community and state governments on payer issues that affect hospital finances and public health, but they are unsure of how to get started.
CFOs can start by doing research on local legislators and connecting with them on important issues.
They can also leverage their financial data and expertise to illuminate the impact of proposed legislation on patient care, cost structures, and healthcare access.
CFOs can also join advocacy groups to discuss strategies, pain points and paths for reform.
Barwis, a registered lobbyist in Connecticut, knows the struggle, and the successes that can come from lobbying.
"In dealing with payer issues, if all you do is focus on the negotiation and dispute resolution processes with your own data and within your four walls - you are missing the leverage a broader organizational voice can yield," he said. "Engaging in advocacy pays untold dividends."
The HealthLeaders Exchange is an 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, email us at exchange@healthleadersmedia.com.
To maximize tech value, CFOs need to examine the specific challenges facing their health system.
As CFOs are called upon to do more than just manage margins, they are expected to be instrumental in improving both clinical and operational outcomes through thoughtful financial acumen.
One way to deliver on this expanded mandate is by investing in technologies that enhance patient and clinician satisfaction. These investments not only support long-term financial sustainability but also address some of the most pressing challenges facing healthcare systems, such as workforce burnout, care coordination inefficiencies, and patient engagement gaps.
The biggest technology investment for health systems and hospitals is the EHR platform.
Laurie Beyer, CFO of Greater Baltimore Medical Center, calls the installation of Epic’s platform one of the most impactful tech upgrades the health system had seen.
“Obviously the biggest tech upgrade or implementation was moving to Epic in 2016,” she said.
Many CFOs that HealthLeaders has spoken with say Epic’s Gold Star program is intriguing, allowing the health system to earn money back for implementing new functionalities.
“Over the years we've maximized the functionality,” Beyer said. “And if you do this, and you use it effectively, then you get points and money back from Epic. So we've been very diligent about that.”
UMass Memorial Health switched its EHR platform to Epic in 2017. CFO Sergio Melgar recalled how the switch not only improved operational efficiency but also staff synergy, preventing departments from working in silos.
Melgar says CFOs must ask themselves ’Where is the liquidity coming from?’ before jumping into large tech investments. CFOs must ensure their balance sheet is prepared for the expense, not only for purchasing the system itself, but also for training staff.
“You need to invest in transformation because you don't want to put Epic on the practices that you currently have. You want to transform what you do,” he previously told HealthLeaders.
In choosing an EHR or an EHR upgrade, CFOs should take into consideration:
-Assessing the organization’s current system and identifying what is working and what is not.
-Establishing a clear plan for how an EHR will be used and maintained.
- investing in training and support.
-Patience, especially during the first year of implementation, as staff get used to the technology and new workflows.
-As Melgar put it: “Focus on a continuous improvement philosophy.”
AI Tools
Another popular tech investment is AI. Many health systems are looking at ambient AI tools to capture the patient-provider encounter and improve billing opportunities
Clinician stress and burnout remains high, driven in part by documentation and administrative tasks that put clinicians in front of a computer instead of patients, AI dictation solutions have the potential to reduce administrative strain. They leverage ambient listening and natural language processing to document patient encounters in real-time.
Beyer says this tool has been helpful in enhancing patient and clinician satisfaction.
“The doctor can look me in the eye and talk to me without sitting in front of the computer, and then at the end of the encounter can look at the note and then can modify it and send it on its way,” Beyer says of the patient experience.
“So that's been a huge satisfaction for patients, and for doctors so that they don't have to spend hours at night getting their notes,” she said. “We've done some things like that, but on a very thoughtful basis, to enhance patient and provider satisfaction.”
Beyer emphasized that moving slowly and thoughtfully on AI investments is an essential factor to determine what tools will provide the most value for her organization's specific challenges.
Besides clinical documentation tools, AI has also found a home in revenue cycle management, helping with billing, coding and improving overall efficiency.
Building An AI Business Plan
Brian Devine, CFO of Allegheny Health Network, also spoke at the exchange about creating a strategic, long-term business plan for AI and new technologies.
“Utilizing AI and new tech for clinicians and other areas like RCM has to be accompanied by a strategic plan, don’t invest just to say you did it. How do we approach a business plan around these types of technologies,” he said.
What’s needed to get started? Long term strategy, ROI, and governance.
For creating this plan, Devine suggests:
Identifying a clinical champion to evaluate the changes to the clinical workflow; allowing CFOs to look at all the potential efficiencies.
Be open to not immediately reducing resources until learnings, adoption and scale occur.
Gain funding by starting with pilot efforts – track operational metrics and allow that to set realistic expectations.
Ensure to consider IT infrastructure needs – upgraded WiFi, TVs in patient rooms, cellular towers, server space, security – it all adds up quickly.
Lastly, consider that ROI may not always be there, but the market is moving quickly, and without these tools it may be difficult to recruit and retain clinical talent. There is some element of competitiveness and required investments over time.
Finding The Funds
Having a strategic, long-term plan for using innovative tech is one thing, coming up with the funding for it is another. While many health-systems are strapped for cash in today’s healthcare landscape, CFOs may find themselves looking for financial flexibility in unexpected places.
CFOs should examine different avenues for savings from non-clinical expenses and ensure there are dedicated teams in place to help do this.
“Non-clinical spend has been a focus for us,” Beyer said. “We have not had discipline with non-clinical spend. The GPO does not manage it, so we have brought in some resources, on a fixed cost basis, to really take a look at almost every single non-clinical contract [and asking] ‘is it the best vendor we are getting for the best price?’”
The potential savings in non-clinical spend could help CFOs unlock a variety of wins, like investing in technology to improve operations and long-term savings.
“That's a little thinking outside the box, because I would think some CFOs don't really focus on the on the non-clinical side,” Beyer said.
CFOs are clearly stressed about the workforce, healthcare policy, and succession planning.
The recent HealthLeaders CFO Exchange gave healthcare CFOs an opportunity to vent about their biggest challenges and collaborate on strategies to address them.,
Here are some of the biggest takeaways:
Monitoring and Strategizing for Regulatory Changes
The regulatory space is making CFOs feel powerless. From potential Medicare and Medicaid cuts, to the impact of tariffs on the supply chain, executives discussed how they aren’t exactly sure where to turn or how to prepare.
Members discussed how tariffs will first manifest in the form of shortages, then lead to price increases. Without a clear idea of how vendors will be affected, they’ll have to be nimble in identifying and addressing supply chain costs when or if those tariffs do actually happen. For example, a tariff that affects implants could hit the orthopedic space hard.
Overall, CFOs must realize that every component in the supply chain matters, and tracing all of the components of the supply chain might not be a bad idea.
Potential Medicare and Medicaid cuts are also a top concern. April Audain, CFO of Denver Health, and a panelist at the exchange, noted that “50% of Denver Health’s patient base is Medicaid,”. Several executives said it’s difficult to plan a budget when they don’t know if or when those cuts will happen.
Some members said the American Hospital Association is not an effective lobbyist, and they felt that local state associations are more effective. As a result, some CFOs are taking a more active role in lobbying efforts and voicing their concerns to lawmakers about the impact of potential cuts.
Working With the Workforce
Workforce hardships took center stage at the exchange, prompting CFOs to discuss what they are seeing in their workforce and how they are preparing for the growing trends and challenges.
A few key topics were:
-keeping nurses and physicians satisfied.
-partnering with educational institutions to train and recruit new staff.
-learning how to keep up with union activity.
Nurses and frontline staff are demanding higher wages, and reducing contract labor is a consistent pain point for CFOs. Many members expressed the need to develop their workforce in-house through expanding education platforms.
Nurse staffing ratios are also a big concern for incoming nurses, and CFOs will have to ensure they are setting their health systems up to produce an environment that incoming nurses want to be a part of.
Cultivating Leadership
Succession planning is also heavy on CFO's minds. As the CFO’s role shifts to include more responsibilities, they’re thinking hard about how they will prepare the next generation of finance leaders, including how they can offer them hands-on experience.
Today's CFOs are expected to play a part in technology and innovation strategy, clinical operations, and staff culture. And many CFOs aren’t ready to take on those responsibilities.
To dive deep into how they can prepare their successors, CFOs can consider their own experience when they first jumped into their roles. At the exchange, CFOs were asked to consider some fundamental questions: Who guided them? What challenges were pivotal?
Preparing future CFOs isn't just about teaching them the numbers. It's about developing their judgment, resilience, and strategic vision.
The HealthLeaders Exchange is an 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, email us at exchange@healthleadersmedia.com.
See where CFOs stand on these three critical topics.
CFOs have a lot to juggle, and with an increasingly hectic healthcare landscape bound to regulatory shifts, workforce developments and fast-paced technological innovations, it can be difficult to prioritize top needs for a health system.
Where are CFOs focused for 2025? Check out this infographic for a breakdown of a live poll from the HealthLeaders CFO Exchange. See what CFOs are saying about clinical collaboration, technological advancements and financial and clinical alignment.
The HealthLeaders Exchange is an 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, email us at exchange@healthleadersmedia.com.
