JoAnn Kunkel joined Sioux Falls, S.D.-based Sanford Health 25 years ago as budget analyst and has since climbed her way to the CFO position at the healthcare system. She was appointed to the executive financial leadership role in 2012.
Throughout her time with Sanford, the health system blossomed from an approximately $300 million hospital into a $4.5 billion system, posing unique financial challenges. With her dedication and leadership, she successfully navigated some of the most financially challenging years the health system faced.
Here, Ms. Kunkel explains the necessary skills for CFOs in today's healthcare landscape, discusses the major unexpected changes in healthcare and offers her best advice to other hospital CFOs.
Note: The following responses were lightly edited for length and clarity.
Question: What major changes in healthcare have you seen in recent years that you would have never expected when you started in the industry?
JoAnn Kunkel: I started in healthcare 25 years ago so when I think back, the biggest changes have been in the healthcare experience. When I started, it was a long hospital stay and a very physician-driven experience. In the last five years the culture shift, the policy changes, the cost of healthcare and technology advancements are driving us to be a patient-empowered, consumer-driven experience. So that is one change over the length of my career that was something unexpected. Another one I would add to this list is all of the different disrupters, the non-healthcare industries breaking in and driving healthcare to make big changes — changes we have to make so we don't end up like Blockbuster.
Q: Beyond financial knowledge, what skills are essential for hospital and health system CFOs in today's healthcare landscape?
JK: Everyone likes to joke around about the traditional CFO who sits in their office with their green shade, a pocket protector that says no to everything. But it is such a different position today … It's a position that requires strategic thinking, creative decisionmaking and the ability to look past just debits and credits… Another skill I would add is nimbleness, so you can anticipate and respond to things that pop up, to properly respond to the changes without disrupting key objectives or getting off-track with your strategic plan … If we let these big announcements, like the Amazon, Berkshire & JPMorgan announcement, derail where we are going it would be awful for our company. Communication is also an important skill in any role, but especially the finance role, because it is very easy to just say no … But we have to explain our reasoning, we have to explain what yes would mean for the organization, what the risks would be and what rewards could follow. Lastly, I would stay willingness and ability to listen and be part of a team. It's the ability to partner with physicians and leaders, ability to be that right hand to the CEO so you are part of the decision process at each stage instead of receiving a briefing at the end and trying to figure out a way to make it work.
Q: As a financial leader, what is the best investment you made in your own professional development in the past five years?
JK: I've been at Sanford health for 25 years … I started as a budget analyst … and have done every financial position and leadership role as we grew from a $300 million hospital to a $4.5 billion healthcare system with all sorts of unique relationships and initiatives. Something I've invested in personally across my whole career is constantly learning and jumping wholeheartedly into initiatives whether it has a financial piece or not. I think that has led me to be able to transition into a leader and CFO at Sanford … Because of that I am not just a typical accountant ... In addition, personally, in recent years I have stepped outside of my comfort zone… started participating in things outside of Sanford, taking risks and talking to people outside of Sanford and doing interviews like this.
Q: Since being appointed to CFO, what is one accomplishment you are most proud of?
JK: My first year in this role was one of [the] most financially challenging years we faced as a system. We went through our first merger with the MeritCare system in Fargo [N.D.] about five years before I was appointed and because of that merger we really got overhead expense heavy … what happened was we just kept adding to leadership… so we had to take a time out … and look at how do we flatten those expenses while still maintaining strategic growth and priorities. So in fiscal year 2013, when I first started, we really focused and really got our teams together … not just finance leaders but also physician leaders, operations, strategic leaders at all of the hospitals and set some goals for us not only financially but also quality-wise, leadership-wise and initiative-wise to set our priorities. Since taking a time out to discuss priorities, we have really gelled as a team… and our finances have been really strong and we have emerged as a very diverse healthcare system with initiatives very unique to us.
Q: If you could pass along one nugget of advice to another CFO, what would it be?
JK: The very first CFO I worked for in 1990 always said, 'you're only as good as your team … I'd never be able to be successful without having you and the team working with me…' [That CFO] was a very thoughtful and inclusive leader … he gave me opportunities to be part of the team and think strategically and develop into a leader. So since then, it's always been my belief that we have a very strong team that should always participate. If we have someone that needs help, we have multiple individuals ready to step up … and working together makes us all better … my advice would be its important to remember you are only as good as your team … Sometimes I think when you get into these leadership roles you can forget that. You always want to be inclusive, give credit to the work and the team and the efforts that help make you successful in your role.