An HFMA-CereCore survey found that nearly a quarter of CFOs say they need better collaboration with CIOs when making technology decisions. This includes additional information about the risk assessment of IT spend, prioritization of major initiatives and alignment to corporate goals, expected ROI and more.
Half of healthcare organizations are pursuing some type of digital health strategy; however, nearly a quarter of CFOs (23%) say they are somewhat or very dissatisfied with the collaboration between finance and IT, or that there is no collaboration at all.
This trend was identified in a 2022 survey of 238 healthcare finance, accounting and revenue cycle executives, sponsored by CereCore. Other findings included:
- 29% of CFOs need CIOs to provide more information about the expected ROI of IT initiatives.
- 42% of CFOs say they need CIOs to provide more information about how to prioritize major initiatives, align those initiatives to corporate goals and assess the risk of IT spend.
- Only a quarter of healthcare organizations track results and measure ROI for technology investments.
- When investing in technology, 41% of CFOs need CIOs to provide more information about a long-term strategy and how the IT investment will improve a function, service or product.
The survey results clearly demonstrate the need for greater collaboration between finance and IT, said Peyman Zand, vice president of advisory services at CereCore.
“IT has become more complex and integrated with every facet of the business,” he said. “It shouldn’t exist on its own. If CFOs and CIOs communicate more effectively and find common ground to understand each other’s perspectives, they could really move the needle on strategic initiatives.”
Improving collaboration between finance and IT
What does greater collaboration entail? “I’ve consulted with successful healthcare organizations and what sets them apart has been complete alignment between CFOs, CIOs, key business unit leaders and the enterprise as a whole,” said Zand.
“The CEO sets the tone, but once the players are aligned, collaboration will happen naturally. CFOs and CIOs begin talking the same language on the cost of IT operations. For example, CIOs help CFOs understand this question: ‘What is the risk for delayed spending?’”
The benefits of this collaboration are substantial, said Zand. “The more collaborative the relationships, the better prepared organizations are to stay ahead of competitors and disruptors. When the CFO and CIO have an ongoing dialogue about technology investments for the future, they pave the way for technology to bring innovation to clinical and business units.”
For example, presenting a business case on healthcare technology is a perfect opportunity for an organization’s leaders to discuss strategy and goals, risks, value, ROI and success metrics. When CIOs understand clinical and business unit challenges, they can suggest technologies that solve real-world problems. Vice versa, CFOs get a better understanding of the risks associated with delaying an IT investment and the value of moving forward with the IT investment.
“Another example is when CIOs go to the Chief Medical Offer (CMO) and say, ‘I know this product will bring advantages to your work area. Are you interested in looking at it with me?’ This changes the whole template of how CIOs are perceived,” said Zand.
Assessing impact on clinical, business units
In contrast, healthcare organizations without ongoing synergy between finance and IT may prioritize initiatives based on subjective evidence (e.g., what a high-value physician wants), said Zand.
“It’s about process first, people second and technology third,” he added. For example, before investing in a new cardiac system, he said CFOs need to ask these questions: Why are we doing this? Are there not enough cardiac surgery centers in our geographic region? If so, how many cardiac surgeons and other resources would we need? Do we need to open 10 centers, or do we really only need five? Where is the greatest demand?
“The final step is the system,” said Zand. “CFOs need to follow this process before listening to a surgeon who says, ‘I went to this conference and saw a cool cardiac surgery system that I want.’ That technology might not be well suited for your organization. For example, it might be designed for a health system with 100 surgeons rather than 10.”
Sharing data for strategic decisions
Data sharing is an important element of this collaboration. When IT is tightly aligned with the strategic road map and business unit goals, CIOs know what data CFOs need and when, said Zand. For example, IT can develop emergency department (ED) analytics to help CMOs prepare for seasonal increases and staff the ED more effectively.
Likewise, as organizations consider joining an Accountable Care Organization (ACO), IT can provide the right historical data and analytics to promote success, said Zand. “When I look at the ACOs that are successful, it’s because those ACOs have been able to use and analyze data in a way that actually helps the populations they serve. IT is one of the keys to their success and so is the ongoing dialogue between the CIO and CFO.”
Tracking ROI over time
Despite an emphasis on ROI, the majority of CFOs tend not to track it over time, the HFMA survey found. This is an area ripe for collaboration, said Zand. Talking about ROI and the value of technology investment begins with presenting a solid business case.
More specifically, IT can help develop and track the key performance indicators necessary to understand impact, such as revenue, quality of care improvement, physician satisfaction, patient attraction, retention and more. Having a systematic approach for prioritization and tracking ROI will help reduce personal biases from decision-making.