The Changing Role of Healthcare CFOs
When the ACA passed in 2010, hospital reimbursements began to shift away from the traditional fee-for-service model and toward models emphasizing quality of care and patient outcomes. Before this legislation, CFOs primarily focused on corporate finance, availability of capital and the typical risks of investment and spending. A healthcare CFO had to balance a budget and manage the allocation of funds appropriately.
Now, as hospital profits become more reliant on coordinated clinical care, healthcare CFOs will find themselves shifting attention from traditional risk and payment assessments and toward a more nuanced analysis of how funds are impacted by quality measures. The rise in popularity of accountable care organizations (ACOs) is impacting how payors compensate hospitals and physicians; fee-for-service is quickly becoming an outdated method as CMS offers greater incentives for care centers that take into account a patient’s overall health during treatment.
Where healthcare CFOs may have historically had limited contact with physicians and other executives, they are now much more likely to be collaborating with people in these positions on a regular basis. It is important for healthcare CFOs to be skilled in communicating in a nonfinancial way now as much as ever. Healthcare CFOs are also going to need a strong overall understanding of the industry, including legislative changes and technology deployments.
One of the most obvious examples of this understanding is in regard to EHR implementations. Easy access to their own health information is an important part of patient experience as well as their ability to take an active role in managing their overall health. EHR systems make this information much more accessible, and allow physicians and care providers to share patient data with other professionals. This kind of care coordination has financial incentives through CMS and the potential to reduce overall costs. Healthcare CFOs will have to determine which system is best for their hospital in regard to cost and return on investment, while also taking into consideration the needs of physicians and care providers.
Additionally, a growing number of hospitals are acquiring, opening, and affiliating themselves with ambulatory surgery centers (ASCs) and medical imaging centers. Healthcare CFOs should have experience in acquisitions and a working knowledge of what the risks and benefits are of such relationships.
The adoptions of MACRA and value-based reimbursement policies have increased the gross revenue risk for hospitals to between -17 percent and +35 percent, much higher than it has historically been. With this much money at stake, healthcare CFOs are expected to manage funds and take risks based on imperfect or incomplete data as new policies and programs are rolled out by state and federal governments.
Top Health Systems by Net Patient Revenue and Their CFOs
|Health System||CFO Name||Net Patient Revenue (M)|
|HCA Healthcare||William Rutherford||$35,940|
|Ascension Health||Anthony Speranzo||$17,668|
|Catholic Health Initiatives||Dean Swindle||$16,011|
|Trinity Health||Benjamin Carter||$15,534|
|Providence St. Joseph Health||Venkat Bhamidipati||$15,438|
|Tenet Healthcare||Daniel Cencelmi||$14,152|
|Community Health Systems||Thomas Aaron||$13,679|
|Dignity Health||Daniel Morissette||$11,156|
|University of California (UC) Health||Paul Staton||$10,025|
|Universal Health Services||Steve Filton||$8,320|
Fig 1 Data from Definitive Healthcare
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Definitive Healthcare has the most up-to-date, comprehensive and integrated data on over 7,700 hospitals, 1.4 million physicians, over 230,000 hospital executives, and more. Our databases include detailed information on inpatient and outpatient procedures at hospitals and clinics, including total charges, volume, and Medicare and commercial payments.