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The healthcare Chief Financial Officer
holds the highest financial leadership position and financial management
service within the sector of senior-level roles. As a member of the
organization’s senior executives and management team, the CFOs are viewed as a
financial gatekeeper, “regulatory compliance, managing financial
relationships, and managing cash flow” (Konstans,2013). However, the role
of healthcare CFO is not straightforward as it was in the past. The authors of
the article, Mixing finance and medicine:
The evolution of financial practices in healthcare, stated that “new
waves of chief financial officers are being tapped from other industries …
such as biotechnology, drug manufacturing, healthcare plans and insurers,
diagnostic and medical equipment companies, and hospital and other healthcare
facilities that provide care to patients” (Langabeer, DelliFraine, &
Helton, 2010).

Additionally, the Affordable Care Act
(ACA) that changed the reimbursement process, organizational configuration, and
the ongoing changes in government regulations, considerably affected the role
of the healthcare CFO as the financial safe keeper of the organization. Whether
ACA continues in its current form, it shows that federal and state governments
became more active in trying to be in charge of the costs as well as to find
new incentive systems to improve quality. These changes demand CFOs how they
control the organizational finance that needs to be put in place to lead
financial responsibility in the organization given these new realities

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Thesis: By responding
to the changes within the healthcare industry such as healthcare reform, the
improvement of patient expectations, and the new medical technologies, the responsibilities
of a CFO are defined in terms of strategizing, reporting, leading, building
relationships, and focusing on values and efficiencies in care delivery.

The
CFO as a strategic role. To meet the demands of this changing role,
“the CFOs need to be visionaries who can use their financial expertise to
craft projections and develop strategies that will help the organizations
deliver high-quality, cost-effective care” (Noland, & Madden 2012).
The fact that today the healthcare industry goes through a high volume of
mergers and acquisitions, it is not enough for a CFO “managing accounts
receivable, negotiating reimbursement rates, budgeting, and overseeing debt
policies” and focusing on the capital available to the healthcare
organization” (Langabeer, DelliFraine, & Helton, 2010). Instead, today,
CFOs are forward-thinkers being responsible for a lot more functions other than
the traditional chief financial controller. The healthcare CFOs have a
considerably more complex role with the increased responsibilities as a result
of ACA, shifting patient expectations, new value-based reimbursement models,
and the rising of healthcare technology drives and digitalized healthcare
innovation as well as “strategic planning and project management
tasks”(Langabeer, DelliFraine, & Helton, 2010).Thus, today’s
healthcare CFOs are strategic CFOs that need to fulfill the management roles
and responsibilities that extend in all direction up to the chief executive
officer CEO, sideways to chief medical officer (CMO), chief quality officer
(CQO) as well as board members, and down to 
particular departments and operation teams (Byrnes & Fifer, 2010).

 

Risk
management
Moreover, the twenty-first-century healthcare organizations operate in
environments where force such as globalization, digitalized healthcare
technology, deregulation, restructuring, mergers, and acquisitions as well as
changing patient expectation create much uncertainty and atypical risks to the
organization. The CFOs’ roles in managing these environments are more strategic
roles and their “skills set requirements have increased in the last
decade, mainly for the following reasons: increased in risk management (94
percent), increased regulation such as Sarbanes-Oxley (91 percent), and
globalization of the economy (92 percent)” (Konstans, 2013). According to
these percentages, managing risk appears to be one of the CFO’s primary
responsibilities. Consequently, it seems that they need to find a win-win
situation by protecting the organization’s fiscal interests when making
financial decisions, without so risking reluctant that organization falls
behind others in using innovative means to generate revenue and control cost or
making decisions that are strictly based on numbers.

New  reimbursement landscape Additionally, when
healthcare organizations continue to experience enormous changes “whether
it is value-based purchasing, bundled payments, reimbursement for ‘episodes of
care’, accountability for quality performance, or the ‘value equation’, it
becomes clear that the ‘value equation’, combining high quality with low cost,
will be the secret to future success” (Byrnes & Fifer, 2010). In the
past, “CFOs developed teams with expertise solely in finance…however
today’s CFOs create teams whose members possess diverse skills sets and
knowledge such as clinicians, analysts, and care coordinator” to assist
them with “service-line operations, or regulatory or risk management
issues” (Noland, K., & Madden, M., 2012, January). Hence, with
increasing pressure on healthcare organizations to enhance quality and lower
expenses when reimbursement for care is reduced, it is essential for healthcare
organizations to have qualified CFOs who are able to navigate the complexities
and challenges of the healthcare (Rochester, 2014).

Revenue
risk
Because of the enormous changes are happening in the healthcare industry such
as hospital mergers and acquisitions which these transactions bring sets of
risks to the organization, the qualifications for the CFO have changed as well.
Now the CFO, chief medical officer (CMO), and chief quality officer (CQO) need
to show a strong relationship that can drive improvements in quality and cost
at the same time. The days when the CFO’s role was managing the healthcare
organization’s finance are now in past. “The new understanding of is that
financial success, whether define as revenue margin, market share, or reputation,
is explicitly tied to quality” (Byrnes, & Fifer, 2010). Thus, the
challenges improving efficiency in the face of increasing costs and decreasing
revenues require CFOs “to partner with clinical and operation leaders to
align care delivery decisions with reimbursement expectations to reduce the
potential of loss of revenue to the organization”(Rochester, 2014).

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