As CFO of Pittsburgh-based Allegheny Health Network, Jeff Crudele knows the challenges of being a leader at an integrated delivery system.
He oversees the financial performance and management of the eight-hospital Allegheny Health Network, a subsidiary of Pittsburgh-based Highmark Health with approximately 2,400 physicians and 20,000 employees.
Mr. Crudele spent most his career at Nashville, Tenn.-based HCA Healthcare, a for-profit hospital operator. He served in various executive roles in his 12 years at HCA, including CFO of HCA's Eastern Group, where he was responsible for the finances of more than 90 hospitals.
Mr. Crudele also was executive vice president and chief strategy officer of Jackson Health System in Miami and president of Hospital Data Solutions before taking on the CFO role at Allegheny Health. He also has served in other senior executive healthcare roles.
Here, Mr. Crudele discusses essential skills for hospital CFOs, shares insights about Allegheny Health Network's capital improvement goals and offers advice for other hospital finance chiefs.
Question: What is the greatest challenge facing hospital CFOs today?
Jeff Crudele: Developing a deeper partnership with the operators and clinicians in order to help them lead the transition to the new operating models that are emerging in the industry. Particularly, the value-based models that are going to be required as the industry moves forward.
Q: What is the most important piece of advice you could give to other hospital CFOs?
JC: Spend a lot of time with your team talking about what is likely to happen in the next 12 to 36 months and less about what is happening today. Doing so allows you to maintain a reasonable focus on the intermediate time frames under which you're operating. It's very hard to forecast out five years and beyond, but it's really important that you don't ignore the changes that are likely to be right before you in the intermediate period. This is very important because that's the time frame when you're more likely to be able to forecast and predict, and you have enough time to react or get ahead of trends that are beginning to emerge.
Q: What skills are essential for a hospital CFO in today's healthcare climate beyond traditional financial and business acumen?
JC: I think you have to practice some form of inspirational leadership. I also think you have to sharpen your collaboration skills and your influence skills as a leader because organizations are becoming significantly more complex. There's a great deal more matrix management than there ever was before, so your ability to influence things is more important than even the ability to control them. We used to be really focused on command and control structures, and in today's world, we're transitioning quickly to more collaboration-based environments. The ability to influence the process becomes, in some ways, even more important in order to have a successful outcome among a diverse group of folks working together. [CFOs must have] courage to speak the truth, though in a way that emboldens the organization to understand and make wise choices, thereby avoiding paralysis and accelerating the right kind of change.
Q: Allegheny Health has recently made significant investments in facility improvements. What spurred these investments and what are the goals related to them moving forward?
JC: This year will be the largest capital spend since the formation of AHN. Our current plan is to spend around $450 million this year in capital expenditures. Much of that results from a highly synchronized planning approach between payer and provider. This approach allows us to make investments in assets and locations that are complementary to what Highmark needs for its [insurance plan] members and also provide value to AHN in our strategic approach to the market in general.
One big difference between AHN as an integrated delivery and financing system (IDFS) and other non IDFS health systems is the level of integrated planning that we do. For example, in my entire career, I have never experienced the level of synchronized discussion with a payer (as we have here). We collaborate closely and deeply regarding our approach to choosing a location and building a strategic asset for the benefit of members and their patient experience at AHN. This is a collaboration and a synchronization you only get when you have this advanced level of integration in an IDFS.
In 2019, our capital plan includes major expenditures related to our new academic cancer center at Allegheny General Hospital, our quaternary and tertiary institution here in Pittsburgh. The new academic cancer center will open in early 2020.
By the end of this year, we will have made substantial progress in constructing a 160-bed full-service community hospital in Wexford, which is a growing suburban community in Pittsburgh. The Wexford hospital is scheduled to open in 2021 and will be complementary to our existing health and wellness pavilion at that location.
Construction is also underway to open four neighborhood hospitals in conjunction with our joint venture with [hospital operator] Emerus. This is an exciting new format in our market. Three of the four are scheduled to open near the end of 2019 and the fourth in mid-2020.
We [also] have major renovations underway at St. Vincent Hospital [in Erie, Pa.], which will modernize and renovate that hospital (and expand the ambulatory footprint in the community as well) in a way that will make St. Vincent even more competitive and preferred in that market.
We're doing all these things in a way that interacts with Highmark to ensure we are meeting the overall strategic needs of the enterprise, including the needs of both members on the insurance side and all patients we care for at AHN.
To participate in future Becker's Q&As, contact Kelly Gooch at kgooch@beckershealthcare.com.
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