Top Traits a Community Hospital CFO Needs to Succeed
What skills and experience do community hospital Chief Financial Officers (CFOs) need to achieve top performance? Primarily, the CFO oversees a hospital’s financial operations. Duties include managing the revenue cycle, effectively measuring departmental productivity, financial decision-making, overseeing margins and debt, and making decisions about hospital assets and resources. It goes without saying that financial savvy and business experience are important factors, but there is so much more to consider when hiring or assessing the performance of a CFO. Whether your community hospital currently has an open position for a CFO or you are a CFO seeking opportunities to improve your performance, here are some key considerations to keep in mind.
Top duties and qualities. The main duties and responsibilities of a hospital CFO vary depending on the size of the hospital. CFOs at a small hospital must be able to think strategically while directly managing the revenue cycle, materials, accounting, and sometimes other support departments. At larger facilities, the CFO role is less task oriented and more focused on strategy and management.
Even with these differences, following are several important abilities and qualities of a high-performing CFO:
Managing overall financial health: First and foremost, the CFO is responsible for the overall financial health of the hospital. They need to think strategically about how to grow the bottom line and find creative ways to maintain cash reserves and cash needs. It’s true that cash is king, and a hospital CFO must manage cash resources appropriately.
Preparing for audits: The CFO also effectively manages the books of record to meet annual audit requirements, annual Center for Medicare and Medicaid Services (CMS) Cost Reporting, as well as various state funded payments audit requirements. In today’s era with the pandemic and the CARES Act Provider Relief Fund payments, hospitals are required to effectively and consistently track and maintain control over the funds they receive from various sources and manage expectations for these funds. The CFO also needs to think about and prepare for future audits by keeping track of the fund use, understanding reporting requirements and proactively ensuring all funds are used per CMS terms and conditions.
Understanding clinical aspects: In today’s hospital setting, finances are intertwined with a hospital’s clinical functions. A hospital CFO needs to understand the clinical side of the process for patient care that generates the financial transactions. The most effective CFOs have good working relationships with physicians, nurses, technicians, and other staff members.
Being flexible: Perhaps most importantly, a CFO needs to be flexible and adaptable. They may have to relocate for a community hospital CFO position or even be called to act in an interim role. A CFO must be willing to roll up their sleeves and handle tasks that may not be part of their official job description. Hospitals are changing and what worked even a few years ago may not be good for an organization now. Nimbleness, adaptability, and a “get it done” attitude are essential to staying successful as a CFO in the rapidly changing healthcare environment.
How to find a quality CFO
So, now that you know what to look for, how do you find the right CFO for your community hospital? Here are a few tips to keep in mind.
Be thorough in the interview process: Don’t cut any corners in the interview process or rush through it to place someone in the role quickly. Just because a candidate may appear to be qualified based on their resume, their full skillset is not always evident on paper. For example, community hospital CFOs need to demonstrate attention to detail as well as higher-level strategic thinking. If your CFO candidate doesn’t have that, things can deteriorate really quickly. During the interview process, include a phone screening, individual interviews, and small group interviews with a cross section of clinical and financial individuals they’ll interface with in the role. Be sure to ask detailed questions, including requesting examples of solving unique challenges. Checking references is also crucial.
Hire for the right “fit”: Experience and skills are not the only decision point to consider. A quality CFO needs fit both professionally and interpersonally with the existing C-Suite leadership. There needs to be a commitment to being a part of the community and in building strong professional relationships.
Consider hiring within: It might sound like the “easy way out,” but it’s often a smart choice: consider hiring within. Could there be a team member in the business office who is ready for more responsibility? The best candidates understand the hospital’s finances, have experience working with C-suite and board members, and have established good rapport with team members and staff. Community hospitals present their own unique sets of challenges, so it’s ideal to select a CFO who is familiar with how community hospitals work and already has the background and skills necessary to roll up their sleeves to get work done. If a candidate came up through the ranks as a controller or director of accounting, for example, these individuals are worth consideration. It can be challenging for someone to lead a hospital’s financial operations unless they learn the ropes beforehand. Being open to mentorship is another way to train someone to be a star in the CFO role.