1. Income, budget, and expense management In spite of the responsibilities of healthcare CFOs changing over the last decades, the fundamental responsibilities of income and expense management as well as the financial skills for a CFOs are still vital and imperative. The CFOs still manage the financial performance of the organization while contributes to the operational decision-making as well. Analyzing the CFO position, the following percentages are CFOs’ most important roles: “company strategy (80 percent), followed by the reliability of reported numbers (63 percent), and reliability of budgeting and planning (22 percent) and reliability of budgeting and planning (22 percent)” (Konstans, 2013). Additionally, “regulatory compliance, managing financial relationships, and managing cash flow are other important roles” of CFOs in the healthcare organization. (Konstans,2013). While the CFOs are responsible to manage and communicate the financial side of an organization and act as a liaison between the financial system and other business units within and outside the organization, they also have “responsibilities that often extend to compliance, human resources, administration, risk management, and information technology” (Konstans, 2013).
Thus, today’s CFOs should be still concentrating closely to cash flow, budget, expense management, while they continue to focus on the profitable growth of the healthcare organization.2. Strategic planning and project management Furthermore, it is evident that the CFOs role in today’s healthcare organization is evolving. Besides, their traditional responsibilities to provide financial and analysis insights, CFOs are greatly involved in supporting and developing a strategy for the organization. Likewise, “the CFOs are usually on the back end of strategy: a strategic decision is made and they are asked to put numbers on them…
but also immediately understand the long-term implications of those numbers on the organization’s strategy” (Williams, 2012). Additionally, in a healthcare organization, “there are circumstances where very tough decisions around resource allocation, operational management, and strategy need to be made, sometimes very quickly… and CFOs have the ability to marry the numbers to the organizations strategy” which is other responsibilities that CFOs need to have to lead the organization.
(Williams, 2012). Therefore, today’s CFOs role evolved from the finance functions to analysis and strategy and with increased responsibilities, “CFOs need to move out of their comfort zone and embrace innovation and change”, which ” is critical to efforts to fuel growth, maintain market share, and improve patient satisfaction and clinical quality, efficiency, and delivery”. O’Brien, M. (2008). Interdisciplinary functionalities Moreover, while having a position of CFOs’ in a healthcare organization today could be little intimidating, especially given how much is expected of today’s strategic CFOs, it is important for them to understand and be sensitive to the demands, desires, and pay attention to the internal dynamics of the organization as well as to the external marketplace and stakeholders.
Internal and external focus First, to be successful in today’s rapid pace of changes in the healthcare industry, the CFOs increasingly need to be focused on both internal and external stakeholders. Foremost, they need to work internally to improve the operational infractures and find the resources to support critical operation initiatives while protecting the assets of the organization. Likewise, the CFOs need to work externally to build strong interorganizational relationships with health insurance leaders, provider, and suppliers. Additionally, while the CFOs job responsibilities appear to expand due to the changes…
, so, too, “is the importance of traditional financial management practices such as internal control and business analysis… as well as to identify the potential control risk that could further reduce and threaten financial viability” (Langabeer, DelliFraine, & Helton, 2010).
Technology and multiple systems Second, the business models in the healthcare industry are constantly adopting the new information technology such as electronic health records (EHR), “communication with patients electronically throughout the course of care”, revenue cycle management tools that increase efficiency and effectiveness during health care delivery (Rochester, 2014) & (Williams, 2011).With these changes, the healthcare organizations need CFOs who “understand and capitalize on revenue growth, new payment models, and new cost structures in the evolving healthcare environment” so, too “CFOs must understand the financial implications of implementing electronic medical records, balancing the cost (investment) with the payment incentive for meaningful use of those records” (Rochester, 2014). Therefore, while it has been knowing that CFOs hold a vital role in the healthcare organization as financial leaders, their responsibilities are also evolved in other areas of business within organization developing a cross-functional approach that increases the financial profitability for the organization as well as evaluate external approaches finding investment opportunities.