As the healthcare industry acclimates to disruption, major health systems are turning to their CFOs for crucial guidance. Four leaders give insight into what's in store for the position.
- The forces that are disrupting healthcare require health system CFOs to be nimble and adaptable in performing their duties.
- CFOs are taking more of a strategic role in helping their organizations meet new challenges and capitalize on new opportunities, including innovative partnerships and fresh lines of business.
- Along with their traditional duties as controller, treasurer and economic forecaster, CFOs will help manage profound organizational change.
Dominic Nakis, CFO of one of the country’s largest health systems, goes to work each day at the suburban Chicago office park where his organization moved its corporate headquarters in 2013. While the commute has been constant since then, plenty else about his workday has shifted.
As is true of most health system finance leaders, Nakis is feeling the impact of the changes that are transforming healthcare.
“It’s really expanded my view and approach to my job,” Nakis says. “There’s certainly more in terms of mergers and acquisitions, expanding into new and different lines of business and attempting to incorporate more automation and standardization into work processes.”
A prime example of the changes: That suburban office is now one of two corporate headquarters for Advocate Aurora Health, the product of a 2018 mega-merger and the ninth largest not-for-profit health system in the country. Nakis, who started as CFO of Advocate Health Care in 2006, played a central role in planning and executing the transaction with Aurora Health Care.
Of all the changes to the CFO role in recent years, the most significant is that it’s become much more strategic. “Especially in mid-sized and larger organizations, the CFO is definitely focused on the future,” says Rick Gundling, FHFMA, HFMA’s senior vice president of healthcare financial practices.
Having eyes on the future requires CFOs to work in partnership with not only their finance teams but also other members of the C-suite. “When I talk to CEOs, many feel like they cannot move their organizations forward without their CFOs,” Gundling says.
CFOs also are having more conversations about technologies like analytics, artificial intelligence and automation that can bring greater efficiency to the revenue cycle and other functions, Gundling says. As their organizations become more technology-driven, CFOs need to understand how to apply such tools to drive down costs and improve operational efficiencies.
Another increasingly critical skill for CFOs is the ability to leverage their business acumen to help educate leaders outside of finance on how they can use data to improve their performance. “In many ways, the CFO is almost becoming a coach to help clinical and operational leaders use their financial data,” Gundling says.
Having a consumer focus also is becoming progressively more important. “In the future, the most successful CFOs will be able to look through the lens of the consumer and purchaser and bring their value proposition to life by increasing quality and decreasing the total cost of care to make care more affordable,” Gundling says.
As exemplified by the four leaders profiled below, CFOs are embracing their new responsibilities. Nakis is soft-spoken by nature, but while posing for a photo, he grows animated when discussing some of the challenges and opportunities that lie ahead for healthcare finance leaders.
“It’s professionally rewarding,” he says in an interview. “It’s part of our role as we work toward guiding the continued evolution of our organization.”