A CFO is responsible for the financial health of the organization. They develop and oversee financial strategy, manage budgets and expenditures, and ensure compliance with regulations. CFOs also collaborate closely with other members of the C-suite to develop and implement strategic initiatives.
Healthcare CFOs, while CFOs, have specific knowledge and expertise in the multi-faceted healthcare industry. Within the healthcare industry, there are numerous categories, all of which require different specific expertise and knowledge to be successful. As a small sample, healthcare CFOs are in the following: hospitals, senior living, therapy practices, medical and dental practices, home health, behavioral health, diagnostic imaging, and DDA group homes. They also are found in other industries that are closely related to healthcare, such as pharmaceuticals and biotechnology.
Healthcare CFOs typically have a background in finance, accounting, or economics, but more importantly, have worked in the healthcare industry for many years. In addition, depending on the specific industry, they may need to understand commercial insurance, Medicaid, Medicare, private pay, government grants, state government billing, cost reporting, research, development, etc. They need to also understand operational staffing requirements, medical equipment, research equipment, and medical supplies just to name a few.
For example, a hospital CFO’s responsibilities may include establishing and allocating capital and operating expenses, controlling department profit margins and debt, and developing strategies to lower the cost of procedures. Hospital CFOs work with the CIO or CTO to make sure billing systems and data warehouses are working efficiently and effectively to both maximize cash and to quickly evaluate changes in the hospital’s performance. Additionally, the healthcare CFOs manage the entire earnings period of the hospital, including incorporating important documentation, creating strategies for growing cash flow, and enhancing claims billing software.
Interacting with internal and external stakeholders is another important responsibility of healthcare CFOs in hospitals. This may include meeting with executives such as senior vice presidents, vendors, and business partners, as well as presenting financial reports to the CEO and board of directors. This will make sure that the hospital is operating effectively and profitable.
Below is a sample of other healthcare categories and some key knowledge criteria:
- Ever-changing consumer patterns
- Home health services and health care reform impacting their business
- Physical, Occupational Speech Therapies cost per unit and staffing efficiencies
DDA Group Homes
- State regulations
- Billing State Agency
- Cost Reporting and Budgeting
- Staffing requirements
There are a number of signs that suggest you may need to hire a healthcare CFO. If your organization is experiencing any of the following four signs, it may be time to consider bringing on a financial expert:
1. You’re struggling to keep up with the ever-changing healthcare landscape.
The healthcare landscape is constantly changing, and it can be difficult for organizations to keep up. New regulations, technologies, and treatments are being introduced all the time, and it can be challenging to stay aware of all the latest developments. At the same time, reimbursement rates are changing in an exceedingly high staffing turnover work environment. This is where a healthcare CFO can be a valuable asset. With their financial expertise, healthcare CFOs can help you navigate the ever-changing healthcare landscape and make informed decisions about where to allocate your resources.
2. You’re not sure how to best allocate your limited resources.
3. You’re not seeing the financial results you need to sustain your organization.
4. Your C-suite is consumed by financial fires that leave little time to focus on strategic initiatives.
A good healthcare CFO is a strategic thinker with a strong financial background. Additionally, a good healthcare CFO will have excellent communication and interpersonal skills. They should be able to build consensus among various stakeholders and effectively communicate their vision for the organization. Finally, a good healthcare CFO will have a record of success in improving financial performance.
If any of these signs sound familiar to your organization, it may be time to consider hiring a healthcare CFO. With their financial expertise, healthcare CFOs can help you navigate the challenges of the ever-changing healthcare landscape, allocate resources effectively, and improve your organization’s financial performance.