Healthcare finance leaders are architects of value creation

The role of the CFO is becoming more complex and one of many changing dynamics of the CFO responsibility, which has shifted from only finance and accounting to being the chief risk officer/transformation officer/digital officer, compliance officer. Many CFO and good financial leaders are also donning the hat of chief culture officer and the reason is that CFO is closest to data and understands the impact and implication of changes or events on the business.
As part of their role to achieve financial solvency, healthcare CFOs must work with all other types of leadership from supply chain, operations, to compliance in order to help them achieve their goals while keeping the organization objectives in mind. A strong healthcare financial leader should be able to both drive cost efficiencies but also allocate capital to ensure the organization is future ready and able to maximize new revenue opportunities as well. One of the critical functions of the finance leader is also to drive shareholder value without compromising on compliance or patient health and safety.

Hospitals have high fixed cost structure and are highly people and capital intensive business and thus most healthcare organizations ensure that the finance leadership is involved prior to procuring major equipment, projects or any major spends. This is mostly achieved through either setting up of CapEx committees, online CapEx approval or various discussions as finance usually has the overview of the entire organization from profit and loss to balance sheet. This process assists not only the supply chain team but also clinical and operations to understand the importance of credit period; foreign exchange fluctuation and its impact; accounting; and legal implications and costs associated with credit as well as various other structures which can drive better negotiation on the deal as well drive more efficient cash flow and maximizing the benefit for the organization.
With the advent of technology, rules and games of engagement are fast becoming boundary-less as organizations must face the challenge of being contended with nimble competitors who take advantage of the low barrier to entry that technology provides and challenge the very business model that was true as recent as 10 years ago. As CFOs, we are uniquely positioned and are only other besides the CEO, who can see the entire organization end to end. It has made our jobs challenging as more time is getting spend with CEOs in deciding on allocation of resources for future expansion, profitability and compliance and looking at new ideas and business models to keep ourselves relevant in this fast changing and dynamic environment. Just an example, the world is moving fast into crowd sourcing and imagine this becoming so big that outsourcing would become a thing of the past, imagine a day wherein the routine tasks are done by robots, computers and 3D printers, more efficiently at unimaginable speeds (already started in countries like Japan for auto manufacture).

CFOs must consider the impact of the tax system, employee healthcare, and utility costs. Their role has become that of an overseer not only of the organization’s finances but also current and incoming talent. Reskilling of teams in the front and backend will help make the brand more relevant and the role is now integrating into all the functions. By working with leaders to reduce talent turnover through engagement, mentoring, and even financial assistance programs, the CFO can have a direct impact on the bottom line. Participating like a chief cultural officer in this aspect of talent management, the CFO can make sure that leaders in all other departments are also keeping the organization’s financial health in mind.
The pioneer in finance must be an astute facilitator, with genuine vision that looks past the numbers. Hospital incomes originating from inpatient affirmations, repayment and administrative punishments will in general weigh intensely on the money group while considering new purchases–even with ventures inside the capital-spending plan.  They should know the repayment choices, have remarkable associations with doctors, and be open to fresh perspectives. Related to the COOs, CFOs must operationalize and decide continuous monetary effect.
One major breakthrough during these COVID times has been access to healthcare digitally. Through our healthcare-at-home app, patients can consult doctors, order medicines, order home collection of samples and the like. One feels that given the heightened sensitivity around this whole thing, people may prefer to continue with this trend even once the pandemic is over. The follow-ups to consultation can be digital. Some medicines may need to be taken lifelong. This opportunity provides a platform for us to stay connected, maintain a constant engagement with our patients, and provide home healthcare or home care wherever required. Our digital channel may not have entirely helped in replacing losses but it surely has provided us with an opportunity of recouping our losses by expanding or footprint beyond state boundaries. 

With the increasing influence of new age technology in our lives, today’s CFO must also consider cyber security as an important aspect of financial stability. He or she must collaborate with the CEO, CFO, and CIO as well as the healthcare organization’s information technology leadership to set up programs to achieve cyber security. In this scenario, the CFO needs to work to allocate the budget for the tools and personnel needed to assess technology risks, forecast potential issues, and include a plan for cyber security into the business strategy. This should also include a crisis preparedness and risk mitigation strategy should there be a breach.

One of the many challenges that we as a community face is that in the effort of allocation of resources, we sometimes forget our own function (finance) and we need to continue to drive enhanced levels of automation so that more and more time is spent on analytics and business partnering, areas of controls, enhanced level of compliance and changes in tax laws are taken care of. Integrating the ERP with business analytics and intelligence tools is becoming an integral part of the future of the finance organization as we improve our business partnering and leveraging technology to drive organization objectives and ensuring that the function and the organizations stays relevant to ever changing dynamic world that we are in.
In a nutshell, it’s time for CFOs to start using today’s digital technologies to drive digital transformation within finance functions. It gives us the opportunity to expand our focus on efficiency and compliance while reimagining a new finance function that drives strategy and new business models as a strategic partner to the business since the biggest focus for businesses will revolve around digital transformation. But as enterprise leaders will need to stay focused on agility, rapid growth and scale are imperative in order to stay competitive.
Given the current pandemic, our group is ensuring that all efforts and resources are allocated in ensuring safety of the patients, clinical staff, nurses, doctors, employees, and we continue to be the healthcare destination of choice. We are also spending significant time and capital in ensuring that we have state-of-the-art digital channel/app to drive patient engagement as patients may have some challenges to come to the hospital physically. We continue to drive capital efficiencies and work on effective cost optimization as we look to get back to our pre-covid occupancy. Our group would continue to ensure that the hospital upgrades equipment with new age technologies to ensure superior clinical outcome. We would continue to allocate capital to ensure that we drive organic growth and also look out for any in-organic opportunities to drive superior growth of Manipal Hospitals.