The craft projections and develop strategies that will

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 structure, 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 because of ACA, shifting patient prospective, 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, mergers, and acquisitions as well as changing patient anticipation generate much insecurity 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).