CFO Roundtable: 3 Health System CFOs Discuss Their Changing Roles, Challenges and the Most Important Thing CFOs Can do Today

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long-term objectives. Q: What is the most import- ant thing a health system CFO can do today? GC: e most important thing a CFO can do today is devel- op an understanding among health system senior leaders regarding future implications from the decisions they are making every day. e CFO must ensure impact analysis for decision making includes both long-term and short-term implications. JK: e most important thing a health system CFO can do today is to be a partner to the operations executives. Strictly looking at the numbers can be very limiting without a com- plete understanding of the underlying opportunity and strategy. When partnering with the operations team on strate- gy, it is important to be trans- parent with the data and finan- cial information and educate them on the impact. But you quickly need to move past the numbers and look toward the strategy itself and its impact on the organizational success factors. KB: One of the most import- ant things a CFO can do is to build and maintain a strong balance sheet, while focusing on devoting core competencies to succeed in a pay-for-value environment. Q: From a financial stand- point, what do you believe will be the biggest challenge health systems will face in coming years? What should they do to overcome this chal- lenge? GC: I believe the biggest chal- lenge will be the squeeze of health system revenues as key federal and state healthcare program budgets are declining on a per person basis. Few- er future taxpayers will exist to pay for the growing gov- ernment participants in the healthcare programs of Medic- aid and Medicare. e govern- ment will likely drop the over- all per person calculations that drive the patient rates health- care systems are paid. Com- mercial payers oen mimic the government trends. erefore, we will likely see declining in- flationary and relative revenue growth rates from commercial payers too. To overcome the challenges, hospitals and health systems should move more low risk procedures and care to lower cost settings, create joint ven- tures and partnerships between other care delivery systems, increase cash reserves, develop unique margin sharing part- nerships with payers, establish a provider-owned insurance plan, adopt lean and other pro- cess improvement initiatives. JK: Financially, as healthcare moves into a more risk-based payment model, one of the biggest challenges will be having the ability to move at the right time and at the right pace. Overlapping risk-based reimbursement with tradition- al fee-for-service creates an environment where you have to develop different sets of metrics, analysis and models and you have to have the abili- ty to move between them at an undefined pace. Engaging and educating operations in under- standing risk-based models is critical to success. KB: Some of the biggest chal- lenges in the hospital and health system environment today relate to government and exchange payment rates, which require renewed focus on pro- ductivity and cost efficiency. A CFO should focus on re- positioning their capacity to be effective and efficient in an environment increasingly fo- cused on ambulatory solutions for their communities. n Roles, Challenges & Most Important Thing CFOs Can do Today 3

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