Economic uncertainty has affected almost every U.S. business since the 2008 recession, and with the Patient Protection and Affordable Care Act going live in 2010, healthcare has faced some of the biggest "strategic uncertainties."
According to an article from Deloitte, CFOs today are expected to both protect an organization's balance sheet and inform the executive team when certain risks arise. This has opened the door for CFOs to play a larger role in managing those "uncertainties."
"Senior finance executives have the ability to be a driver of corporate strategy and decision-making in areas that may have traditionally been outside of their domain yet have a significant impact on the company's bottom line," said Rich Rorem, a principal with Deloitte.
Specifically, the article outlined six areas where CFOs and other senior finance executives must proactively offer their insights, which may help in more effective decisions and better outcomes.
1. Transactions. CEOs are often in the driver's seats in merger and acquisition negotiations. However, finance executives must facilitate several aspects of transactions to ensure risks are monitored and integration costs are controlled.
2. New product launches. For hospitals and health systems, the establishment of a new "product" or service line requires deep analysis and a return on investment assessment of whether the specialty is financially feasible. CFOs and others must monitor capital allocation in these decisions so funds are spent effectively.
3. Pricing. Chargemasters have become a lightening rod of discussion in the healthcare world. Finance leaders must ensure their chargemasters are up-to-date and that their pricing and quality data are transparent and accessible to their patients.
4. New market entry. Much like how CFOs are critical to the success of new product launches and transaction, they must be at the table to make sure the market makes sense. For example, is there room for a hospital in a given market to attract patients with a new wound center or cardiac cath lab? They must also "guide the creation of an optimal operating model," according to the report.
5. Risk-adjusted forecasting and planning. New data platforms allow finance professionals to synthesize information at a rate never done before. Leaders must take advantage of these tools and explain the impact of the financial data, which can also lead to productive credit rating meetings.
6. Capital investment projects. Deloitte said "poorly defined requirements and misaligned resources are among factors that can derail capital investment projects." However, CFOs can apply an analytical approach to reduce investment uncertainty and avoid the excessive costs stemming from poor foresight.
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