First published in 1989, Stephen R. Covey's self-help book, The 7 Habits of Highly Effective People, has sold more than 25 million copies worldwide and is considered one of the most influential business management texts of all time.That got us thinking: what, then, are the everyday habits of successful hospital finance directors? Could we identify and correlate insights about the practices of influential finance executives that could help you to better develop your own? We can, and we will. Let's take a look.
1. Focus on strategy first.
Too often, finance directors get bogged down in the details and lose sight of the big picture view. A narrow focus brings with it reactive thinking, emotive decisions and Band-Aid solutions that can lead to missteps that prove costly over the long term.
Never make an emotional decision — and don't allow the board, your hospital's provider groups or even other members of the C-suite to push you into one. Always maintain a clear view of your organization's annual, 5-year and 10-year goals. Evaluate each and every financial decision on its own merits, given the best available data and vetted against your experience.
2. Recruit the right supporting team members.
Without a skilled, reliable supporting team in the finance department, a finance director can find him or herself trying to juggle too much. But the makeup of the finance department is only one part of the equation.
Not every problem you encounter will be clear-cut financial territory. Often, more input is needed to develop a cohesive plan. You should form strong multidisciplinary teams to deal with those issues that affect your hospital across its siloes.
3. Always look for opportunities to collaborate.
Speaking of siloes, it's essential to break them down. Just ask Steve Short, Executive VP and CFO of Tampa General Hospital, who last year was named one of "150 Hospital and Health System CFOs to Know," by Becker's Hospital Review. "You need to have people who are really good at what they do and have a deep understanding of how certain decisions will impact into their areas," he advised. You need to be able to sit down and work through those decisions together as a team."
The best hospital finance directors work closely with the others in their department and with the C-suite as well as with medical directors and nursing managers, to find solutions that work.
4. Get out of the office and experience the clinical side of care delivery.
Many finance directors aren't comfortable getting hands-on in the clinic because the practical side of giving care is outside their area of expertise. But that's precisely why they should put in time observing care delivery. It's only by doing so that they can develop an in-depth understanding of their providers' (and patients') needs.
How are your facility's IT systems meeting, or not meeting, current needs? Are there hiccups in supply logistics or problems with interdepartmental communications that the C-suite could help to eliminate? What do your providers need now, versus what they will need 5 years from now?
5. Work every day to improve your familiarity with complex regulatory and financial environments.
There should never be a day that you don't do your "homework." You need to keep well abreast of changes in regulations, developments in financial markets, on goings on within the industry and on what your peers are accomplishing at other hospitals. Develop a list of trusted resources — trade mags, peer-reviewed journals, news sites, insider or issue-based blogs and the like — that you will use to stay informed. Set aside time each work day to review those resources and stay up to date.
6. Remember always to be forward-thinking in your approach.
You're not making financial decisions for today. You're making them for next year, 5 years down the road or, in some cases, even 10 years down the road. What you do now will affect your hospital's ability to provide care for the people in your area far into the future. It is essential that you bear that in mind. When evaluating new investment opportunities, new systems or changes in procedures, make sure that you consider not only cost effectiveness, but operational fit. You'll need to work closely with the COO, the Chief Medical Officer and the Chief Nursing Officer to do so.
7. Communicate clearly and concisely.
When you communicate, others need to understand you. They need to understand both your reasons and your motivations. Many finance directors forget that their colleagues don't speak the language of finance, or that they might be uncomfortable speaking up to ask for clarification. Make sure that when you give advice or make a request of the team, that you are clear, concise and jargon-free.
"It is critical to be able to articulate the financial context and the 'why' for our plans and decisions across the organization," advised Michael Allen, CFO for Gundersen Health System in La Crosse, Wisconsin. "That requires the ability to carry that message effectively from the boardroom to the front line. If that is done well, then finance moves from being finicky to being a partner for the organization."
8. Be open to change.
With an uncertain political environment, new data collection and analysis capabilities coming into the market and a renewed focus on the need for a value-based reimbursement model, hospitals are dealing with more change than ever before and they are realizing the need to redefine the way they approach their business.
"The biggest opportunity that we have is to change the way we define success in healthcare," said David Smith, CFO for Florida's Memorial Healthcare System. "For years, success has been defined as quality outcomes and solid financial results for the patient treated at each facility. However, as we migrate toward population health, our objectives are changing to keep patients healthy and out of the hospital entirely."
If change scares you, get out of healthcare now. Just run. Because change is going to be the norm for the foreseeable future.
9. Get comfortable working in the "gray" zone.
Hand in hand with being comfortable with change, you need to develop a tolerance for a certain amount of chaos in daily operations. This is particularly hard for many finance directors, but given the shifting sands of regulation and reform, it's a bad idea to approach decision-making, implementation and execution with inflexibility.
As St. Louis-based Ascension Health's CFO, Rhonda Anderson, told Becker's, creating multidisciplinary "centers of expertise" (there's that collaboration again) can help you to mitigate and manage some of that chaos. "We have made it a priority to leverage our talent across all markets," she said, "to serve as catalysts for unique perspectives and different thinking in each of our markets. Our focus is to be comfortable working in the gray zone, as nothing is concrete today.
10. Never forget the end goal: healing with compassion.
Hospitals need to keep their finances in the black, yes. But that should never come at the expense of rendering compassionate care to our patient consumers. Before undertaking any financial decision, such as trimming back a service line, or opting to carry fewer supplies in the warehouse, make sure that you think through the immediate and long-term effects that decision will carry on the wards.
Hospital finance directors are neither insulated nor exempt from the mission to render aid to patients — even if their ability to pay for that aid is minimal. It's incumbent upon you to work with your providers and other colleagues to devise creative solutions that promote effective healing in your community.