Cartoon – Budget Meeting with the CFO
Tag Archives: CFO
As Healthcare Changes, So Must its CEOs, CFOs, COOs…
To keep up with big changes in how healthcare is administered, financed, and organized, top leaders are finding a need for new talents and organizational structures.
Healthcare reform as a term has become so ubiquitous that it is almost indefinable. At first, and broadly, it meant removing the waste in an excessively expensive healthcare system that too often added to the problems of the people whose health it aimed to improve. Then it became legislative and regulatory, in the form of the Patient Protection and Affordable Care Act and its incentives aimed at improving the continuum of care and expanding the pool of those covered by health insurance.
Now, for many in the industry, healthcare reform has matured into a business imperative: the process of ingraining tactics, strategies, and reimbursement changes so that health systems improve quality and efficiency with the parallel goal of weaning us all off a system in which incentives have been so misaligned that neither quality nor efficiency was rewarded.
That leaders finally are able to translate healthcare reform into action is welcome, but to many health systems trying to survive and thrive in a rapidly changing business environment, the old maxim that all healthcare is local is being proved true. Making sense of healthcare reform is up to individual organizations and their unique local circumstances. Fortunately, there are some broad themes and organizational principles that are helpful for all that are trying to make this transition. What works in one place won’t necessarily work in another, but the innovation level is off the charts as healthcare organization leaders reshape what being a leading healthcare organization means as well as what it requires.
65 financial benchmarks for hospital executives
Hospitals leaders across the nation use benchmarking as a way to determine the areas of their business that need improvement. The continuous process of benchmarking allows hospital executives to see how their organizations stack up against local and regional competitors as well as national leaders.
Here are 65 benchmarks related to one of the most important day-to-day areas hospital executives oversee — finance.
Key ratios
Source: Moody’s Investors Service, “U.S. Not-for-Profit Hospital 2015 Medians” report, September 2016.
The medians are based on an analysis of audited 2015 financial statements for 340 freestanding hospitals, single-state health systems and multi-state health systems, representing 81 percent of all Moody’s-rated healthcare entities. Children’s hospitals, hospitals for which five years of data are not available and certain specialty hospitals were not eligible for inclusion in the medians.
Broward Health fires another auditor
http://www.beckershospitalreview.com/finance/broward-health-fires-another-auditor.html
Fort Lauderdale, Fla.-based Broward Health will terminate a contract with its outside CPA at the end of this month after a 29-year working relationship. The fired audit director sees the break-up as the health system’s attempt to curb independent examination of the public system, according to the Sun Sentinel.
Joel Mutnick, audit director for Plantation, Fla.-based Fiske & Co., abstained from a vote to approve a draft of the firm’s audit since the documentation did not disclose several key events, including the suicide of late CEO Nabil El Sanadi, MD, in January 2016, the governor’s suspension of two board members and the lawsuit filed against the board by Pauline Grant, interim CEO who was fired in December 2016.
The audit covered the year ending June 30, 2016. Mr. Mutnick served on the committee of Broward board members and executives that supervised a third-party annual audit of the five-hospital system.
“They didn’t like not having control of me,” Mr. Mutnick told the Sun Sentinel. “Clearly they didn’t like the idea of me turning down the financial statements because of their inadequate disclosure. I don’t think they liked an outside auditor telling them or questioning the financial statement results.”
The chairman of Broward Health’s audit committee, Chris Ure, refused accounts that Mr. Mutnick’s departure involved his voting record or his independence. Mr. Ure said the committee is operating under new bylaws that impose term limits on members to strengthen independence and fresh perspectives, according to the Sun Sentinel. Under those new bylaws, Mr. Ure said outside members will no longer be paid.
Last September, Broward Health cut ties with KPMG after the accounting firm refused a contract addendum that would have extensively restricted its inquiry powers into Broward’s activities. Broward officials said they added the addendum over concerns KPMG would be unable to certify the system’s financial statements by the end of the year, due to the length of KPMG’s possible investigation into corruption allegations against the system.
Molina Healthcare fires its CEO and CFO
http://www.fiercehealthcare.com/payer/molina-healthcare-fires-its-ceo-and-cfo
Citing “the company’s disappointing financial performance,” Molina Healthcare has cut ties with its CEO, J. Mario Molina, and his brother, CFO John Molina.
The Medicaid managed care company announced Tuesday that Joseph W. White, who was its chief accounting officer, will take over the role of CFO and act as the interim president and CEO while Molina seeks a replacement for that role.
Molina’s board of directors took the step of firing the sons of the company’s founder, C. David Molina, “in order to drive profitability through operational improvements,” Chairman Dale B. Wolf said in the announcement.
“With the industry in dynamic transition, the Board believes that now is the right time to bring in new leadership to capitalize on Molina’s strong franchise and the opportunities we see for sustained growth,” he added.
The leadership change comes in the wake of Molina’s revelation in February that it lost $110 million on its Affordable Care Act exchange business last year. On the company’s fourth-quarter earnings call, J. Mario Molina primarily blamed the ACA’s risk adjustment program, which he said uses a methodology that “penalizes low-cost and low-premium health insurers like Molina.”
That was a sharp turnaround from back in September, when the insurer’s CEO said that it had exceeded its own growth targets for its ACA exchange business.
J. Mario Molina has also been an outspoken critic of Republicans’ bill that aims to repeal and replace the Affordable Care Act—a rarity among his peers. In particular, he was critical of the steep funding cuts for Medicaid proposed by the GOP.
Molina’s now-ex-CEO earned $10 million in total compensation in 2016, a slight decrease from the $10.3 million he made the year prior and only one of two executives at the eight largest publicly traded health insurers to take a pay cut.
Cartoon – The End is Near
CFOs explain changing role, see collaboration key as healthcare changes
While the old image of a healthcare chief financial officer centered on accounting, budgeting and overseeing the financial operations in general of a healthcare system, changes to the industry are turning that idea on its head. As clinical quality and technological prowess now have direct effects on the financial health of a hospital, the modern CFO must have a far more overreaching set of skills to perform at the highest level in their jobs.
To illustrate that, Healthcare Finance spoke to three CFOs in the field about how they got to the top and how that role has evolved during their tenures. All of them said the job demands more strategizing, collaboration and concern over quality than ever before.
The key factors affecting 2017 hospital budgets from 2 CFOs
CFO roundtable: 3 finance leaders on clinical staffing, retention issues
The healthcare workforce represents one of hospitals’ biggest costs and affects every aspect of the organization, from the quality of patient care to the hospital’s bottom line. With such high stakes amid the transition to value-based care, leaders must ramp up recruiting and retention strategies while mitigating the effects of the nationwide staffing shortage.
At AMN Healthcare 2016 Workforce Summit in San Diego, Scott Becker, publisher of Becker’s Hospital Review, moderated a panel discussion with four health system finance executives on the top staffing challenges they are seeing in their organizations.
Panelists included Gary Raju, CFO of St. Louis-based Mercy Health System of Oklahoma; Chip Neuman, CFO of Community Regional Medical Center in Fresno, Calif.; and Brian Scott, CFO, chief administrative officer and treasurer of AMN Healthcare.
Here are three of the most interesting takeaways from the panel.
Big Ten produced the most sitting CFOs: 5 things to know
The Big Ten Conference has produced more sitting CFOs of Fortune 500 and S&P 500 companies than any other undergraduate university conference, with 75 sitting CFOs who attended Big Ten universities for their undergraduate education, according to a Crist | Kolder Associates report.
Here are five findings from the report.
HENRY KOTULA 