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Hiring an Interim CFO

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https://www.linkedin.com/pulse/hiring-interim-cfo-joe-zuyus?trk=mp-reader-card

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Hospitals are seeing increasing amounts of management turnover, especially in the C-Suite. Skilled and experienced healthcare executives are in short supply mostly due to an industry-wide talent drain, lack of mentoring, and minimal succession planning.

Realistically, filling executive positions takes time, even with the assistance of search firms. Meanwhile, management voids can be damaging: communications suffer, initiatives lose pace, and disruptions occur. Even during a brief transition, some organizations cannot afford vacant leadership positions.

Is interim management a viable option to the risk of absent leaders? Is it better to hire quickly to avoid a vacant role? Many organizations consider interim management solutions as a transitional step to permanent replacement of vacant positions, often in conjunction with the use of a search firm. Others may see the talent and skills within and be able to move quickly. Still, others may hire hastily and lose valuable time in the long run to identify the best candidate.

What tact should your organization take when leadership vacancies occur?

ADVANTAGES OF INTERIM MANAGEMENT

When openings occur in the senior leadership structure, interim management offers advantages over traditional alternatives.

1. Prevents work overloads. Spreading assignments among others causes work overloads. Temporary assignments add extra responsibilities to an incumbent’s already “full plate,” which can lead to work overload and compromised performance. However, a capable interim executive can devote full time and attention to the responsibilities of the vacant management role. A temporary appointment is a welcomed contrast to assigning extra responsibilities to incumbents when a resignation occurs.

2. Adds objectivity. A new set of eyes is beneficial to organizations in transition. Interim leaders usually are less affected by the internal politics of an organization, especially those related to a promotion or a permanent placement into the vacant role. By removing the “vested interest” from the leadership paradigm, the interim executive holds a unique perspective often unavailable to others within the organization. Simply, the temporary status allows the interim position-holder to make decisions unencumbered by career-driven aspirations.

3. Enthusiasm generates optimism. Seasoned healthcare leaders enjoy serving as interim executives and they bring their gratification to the assignment. Their extensive experience and relevant knowledge enables the interim manager to serve as a short- or medium-term replacement for a vacant position as well as a valuable consultant. The organization benefits from the interim’s experience and ability to address the ongoing challenges. When a national search to fill the position is concurrent with an interim assignment, the interim leader and the search consultant can work together to identify a candidate with the right cultural fit. Nuances unique to the operation, culture, and strategic initiatives otherwise unnoted are minimized as the two executives work in tandem.

DISADVANTAGES OF INTERIM SOLUTIONS

An interim management solution may not be the best option for every organization or with every vacancy. Quickly hiring and filling the position may be more expedient, especially if an internal candidate with the necessary skill set and personal attributes to succeed is available. Interim solutions may convey misconceptions among the senior managers.

1. Delay may cause unrest. Concerns about a delay should not lead to rushing to a decision or hurriedly identifying an individual to fill the vacated position. Other leaders and managers throughout the healthcare organization may become disillusioned when a vacancy is filled hastily with an internal interim solution.

2. Management perceived as indecisive. By engaging in a temporary solution, senior management may be perceived as indecisive and willing to “float along” for a period while the entity secures the right person with particular skills.

GUIDELINES FOR INTERIM MANAGEMENT

If you decide to engage an interim executive, follow proven guidelines to achieve success and to provide your organization with a value-added service beyond supplying a temporary workforce.

1. Use a reputable and qualified placement firm. Engage a reputable executive search firm to identify and vet candidates before placement. Using qualified professionals to fill interim assignments allows you to off-load the time-consuming, and often expensive, recruitment and screening process. Some firms have both a capable short-term bench and the capacity to conduct the search for the permanent placement. As a subject matter expert, the interim executive can collaborate with the search professional to produce the desired results.

2. Inform candidates of expectations. The candidates should be aware of the expectations that both the hiring organization and the placement firm will have for them. The acting executive needs to understand that their primary focus and allegiance is to the assigned organization. He or she should consider the provisional assignment as a full-time role and not just act as a placeholder. This ownership of the job responsibilities at hand will be a critical success factor for the interim executive. The placement firm should provide oversight to ensure the interim executive approaches the work in this manner, focusing on results. Other leaders within the organization must not perceive the interim as temporary, rather a part of their team.

3. Engage a multi-service search firm. The organization may be well-served by using executive search companies that have the bench strength to fill both short-term and permanent vacancies, as well as the resources to evaluate and even train interim executives in the leadership skills necessary to their new roles. Executive coaching of this type can be especially valuable with physician executives who may lack the management training and experience to succeed in their new non-clinical areas of responsibility.

4. Focus on alignment and avoid conflicts of interest. The organization and the placement firm should be transparent and focused on alignment to assure that the interim executive succeeds. They should identify any potential conflicts of interest and make all efforts to resolve these without involving the interim executive. The executive should be able to commit his or her full loyalty and attention to the hiring organization. He or she should not be in a position of having to choose between fidelity to the interim employer or their direct employer, i.e., the placement firm.

5. Compensate fairly. Executive search firms that know the market rate for high-level managers in healthcare organizations are best suited to handle interim placements. An acting role may demand a premium payment for travel expenses, dislocation of the candidate from his or her family, relocation to a geographically isolated facility or overseas location, and placement into an often chaotic and dysfunctional environment. However, the fees for the interim manager should be valued fairly, not exceeding the boundaries of fair-market-value or commercial reasonableness. This test is especially important when hiring physician executives into these roles, as Stark and anti-kickback laws may apply, especially if the physician continues to practice clinically.

CASE STUDY

In 2014, a large multi-specialty healthcare system engaged Coker Group to assist with the interim management of their Chief Financial Officer position. The assignment also included conducting a national search for filling the position permanently. Coker vetted several candidates and then agreed to place into the role a full-time Coker employee with extensive experience as a CFO and CEO of several healthcare organizations.

The interim CFO assignment was filled within a week of the discussions. The acting executive immediately faced several issues: declining revenues in several important service lines, and languishing growth and business development initiatives in critical service areas (cardiac services and orthopedics).

Over the next four months, the interim CFO was able to advance many of the stalled initiatives. By performing successfully as CFO, he was asked to assume the role of interim CEO for the system’s flagship hospital, upon the resignation of its CEO. Now, with the CFO position vacant, Coker provided another experienced interim candidate as CFO, again within a week.

Utilizing the skill set from many previous CFO and CEO assignments, the interim candidates quickly aligned with other members of the health system’s senior management team. They expeditiously identified and prioritized opportunities to align costs, increase reimbursement, challenge charge master assumptions, and analyze service line margin contributions. This engagement provided an example of collaboration to the other C-Suite members, as previously they had not worked with their peers and subordinates, creating a silo mentality regarding routine tasks and operational responsibilities.

This case denotes how interim executives can enter into an organization and guide it successfully through uncertain times. It also demonstrates how the right interim leader can take ownership of an acting role and consider it his or her full-time position. The successful leader is versatile and can work at many positions, often assuming greater responsibilities. Ultimately, the CFO and CEO positions were filled permanently as a result of the executive search, and the organization lost no momentum during its conduct.

CONCLUSION

Immediate replacement versus interim management is a consideration for every board and executive team that must fill a vacancy in its executive positions, with advantages and disadvantages for both options. Each vacancy in healthcare leadership offers a unique challenge. Consider the options, reflect on the personalities of the existing executive management, the political climate of the organization, and the skills and expertise needed before making a decision.

Health Gap Widens Between Appalachia And Rest Of The U.S.

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http://khn.org/news/health-gap-widens-between-appalachia-and-rest-of-the-u-s/

 

Sandy Willhite doesn’t mind driving 45 minutes to the nearest shopping center. But living in Hillsboro, W.Va., became problematic when she had to travel nearly six hours for proper foot treatment.

“There just aren’t any quality surgeons or specialists in our area,” Willhite said, when explaining why she went to a doctor in Laurel, Md.

Getting health care is a common problem for the residents of Hillsboro, a tiny hamlet in the middle of Appalachia with a population of just under 250 residents.

And the Appalachian region is in dire need of health care. This section of the U.S., long acknowledged to be among the most economically disadvantaged in the country, is showing a growing gap in health outcomes with the rest of the United States.

A study released Monday in the journal Health Affairs found disparities widening sharply between Appalachia and the rest of the country, driven by higher rates of infant mortality, smoking, obesity and early deaths from motor vehicle accidents and drug overdoses.

“Although life expectancy increased everywhere in the United States between 1990 and 2013, less rapid declines in mortality and slower gains in life expectancy among people in Appalachia have led to a widening health gap,” the study said.

The study focused on the 428 counties within the 13 states that constitute Appalachia. Gopal Singh, an author of the study and a senior health equity adviser at the Health Resources and Services Administration, found that counties with high rates of poverty have the highest infant mortality rate and lowest life expectancy. These areas are seen mostly in central and southern Appalachia.

The researchers found Appalachia lagged behind the rest of the country on health measures in the early 1990s — but only slightly. Infant mortality rates were not statistically different. And life expectancy was about 75 years — just 0.6 years shorter than that outside of the region.

But when the researchers analyzed data from 2009 to 2013, they found the infant mortality rate for Appalachia to be 16 percent higher than the rest of the country and the difference in life expectancy was 2.4 years.

When researchers examined specific demographic groups, some of the disparities were much greater. For instance, they noted a 13-year gap in life expectancy between black men in high-poverty areas of Appalachia (age 70.4) and white women in low-poverty areas elsewhere in the country (83).

According to the study, the association between poverty and life expectancy was stronger in Appalachia than the rest of the country.

“You do see a more rapid improvement in the rest of the country compared to Appalachia, but there are specific reasons why Appalachia I guess continues to fall behind,” said Singh, the lead author.

The study points to specific health problems, including lack of access to doctors and other providers, high rates of preterm births and low-weight births, and high rates of smoking-related diseases, such as lung cancer, chronic obstructive pulmonary disease and heart disease.

“Smoking-related diseases accounted for more than half of the life-expectancy gap between Appalachia and the rest of the country,” the study said.

Dr. Joanna Bailey treats some of Appalachia’s patients every day as a family medicine physician in Wyoming County, W.Va. She grew up there and said the lifestyle plays a large role in health outcomes. “I treat a lot of diabetes; I see a lot of high blood pressure; I see a lot of heart disease. I see a lot of obesity, because it is a place where it has been normalized quite a bit.”

“I think that the culture is such that getting those conditions under control is difficult for many reasons,” Bailey said.

The economic issues compound the situation, she said.

“There’s the problem of poverty,” she added. “A lot of people are on disability and they rely on food stamps to get their food for the month.” Many of Bailey’s patients pay someone to drive them to the grocery store. She said it’s difficult to coach them to buy healthful groceries when the food is good only for a few days.

“By the end of the month, they are back to eating cereal and Hamburger Helper,” Bailey said.

She thinks the widening health gap in recent years has accelerated with an increasing number of young people leaving the area for job opportunities.

“We’re left with an older, sicker population who can’t work or don’t work, and those people are notoriously sicker,” Bailey said.

Both Bailey and Singh agree that addressing the health gap requires socioeconomic change. The communities need better higher-education opportunities and infrastructure improvements, such as improved roadways so patients can more easily get to larger towns and cities to access health care.

Until then, Willhite and her family will continue to drive hours for care, such as the foot doctor in Laurel, whom she had consulted when she lived in Maryland.

“There are just absolutely so many (health) issues here in this region, you can’t begin to put your finger on one,” Willhite said. “It’s like a big vicious circle.”

Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care

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http://www.commonwealthfund.org/interactives/2017/july/mirror-mirror/?omnicid=EALERT1254143&mid=henrykotula@yahoo.com

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The United States Health System Falls Short

The United States spends far more on health care than other high-income countries, with spending levels that rose continuously over the past three decades (Exhibit 1). Yet the U.S. population has poorer health than other countries. 1 Life expectancy, after improving for several decades, worsened in recent years for some populations, aggravated by the opioid crisis. 2 In addition, as the baby boom population ages, more people in the U.S.—and all over the world—are living with age-related disabilities and chronic disease, placing pressure on health care systems to respond.

Timely and accessible health care could mitigate many of these challenges, but the U.S. health care system falls short, failing to deliver indicated services reliably to all who could benefit. 3 In particular, poor access to primary care has contributed to inadequate prevention and management of chronic diseases, delayed diagnoses, incomplete adherence to treatments, wasteful overuse of drugs and technologies, and coordination and safety problems.

This report uses recent data to compare health care system performance in the U.S. with that of 10 other high-income countries and considers the different approaches to health care organization and delivery that can contribute to top performance. We based our analysis on 72 indicators that measure performance in five domains important to policymakers, providers, patients, and the public: Care Process, Access, Administrative Efficiency, Equity, and Health Care Outcomes.

Our data come from a variety of sources. One is comparative survey research. Since 1998, The Commonwealth Fund, in collaboration with international partners, has supported surveys of patients and primary care physicians in advanced countries, collecting information for a standardized set of metrics on health system performance. Other comparative data are drawn from the most recent reports of the Organization for Economic Cooperation and Development (OECD), the European Observatory on Health Systems and Policies, and the World Health Organization (WHO).

 

4 Health Care Lessons the U.S. Can Learn from Top-Performing Countries

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http://www.commonwealthfund.org/publications/lists/2017/4-health-care-international-lessons?omnicid=EALERT1254143&mid=henrykotula@yahoo.com

The recent Commonwealth Fund report, Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care, compared health care system performance in the United States with that of 10 other high-income countries. The U.S. ranked last in overall health system performance, yet as a nation we spend the most per person on health care. What can we learn from the top-performing countries? Report coauthors Eric C. Schneider, M.D., and David Squires discuss areas where the U.S. can improve in a New England Journal of Medicine “Perspective.” Here are four takeaways:

1

The best-performing health systems use universal coverage to ensure that everyone has access to care.

The United Kingdom, Australia, and the Netherlands provide universal coverage and very low out-of-pocket costs for both preventive and primary care.

2

Strengthening primary care is key to high performance.

Top-performing countries make primary care widely available, so that patients can get health services when they need them. Primary care services are available not just during regular business hours, but also at night and on weekends.

3

Streamlined payment and electronic record systems help patients and doctors.

In the U.S., health professionals and patients spend countless hours trying to sort out what benefits and services are covered by insurance and tracking down payments. The payment systems in other high-income nations use approaches such as paying providers a fee for comprehensive care of patients and standardizing lists of covered benefits and prescription drugs to make choices easier for both patients and doctors.

4

Spending more on the social safety net can reduce disparities in the delivery of care.

Compared to other countries, the United States spends relatively less on social services like affordable housing and transportation and more on medical services, even though research shows that social spending can improve the health of low-income patients, potentially reducing use of costly medical services.

Fitch: States will take the lead on Medicaid reform despite ACA repeal and replace failure

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Some states had already begun negotiations with the Centers for Medicare and Medicaid Services on securing Medicaid waivers, Fitch said.

Despite the Senate’s failure to pass an ACA repeal and replace bill, state governments are moving ahead with their own efforts to revamp Medicaid, especially through waivers, according to a Fitch Ratings report.

Some states had already begun negotiations with the Centers for Medicare and Medicaid Services on securing Medicaid waivers granting them more flexibility. State waiver proposals could affect both Medicaid expansion beneficiaries and the traditional enrollees, the report said.

Arkansas, Indiana and Kentucky have submitted proposals to CMS asking to add work requirements to their Medicaid expansions. Other states including Arizona, Maine, Pennsylvania and Wisconsin are considering work requirements for at least some traditional Medicaid enrollees as well, Fitch said.

Fitch ratings agency said the Trump administration has indicated they are in favor of such measures.

Overall, Fitch said states have indicated their proposed Medicaid changes could reduce costs and also “support key policy goals.”

The states proposing these measures suggested they support “key policy goals” and could yield cost savings. “However, the actual amount of cost savings could be low as some health policy experts have raised questions about the efficacy of such work requirements given characteristics of the current Medicaid population. Adding work requirements could also add to state administrative burdens for oversight of the Medicaid program,” the agency said.

Fitch also projects states will continue to focus on controlling Medicaid spending as they look at their budgets. CMS predicted long-term rises in Medicaid spending due to growth in higher-cost traditional Medicaid-eligible populations, especially the elderly and disabled, and their most recent 10-year forecast for National Health Expenditures showed state and local government Medicaid spending will rise an average of 6.1 percent annually between 2017 and 2025.

“This is far ahead of Fitch’s expectations for national economic growth and state tax revenue growth, signaling continued pressure on states to manage their budgets accordingly,” Fitch said.