Dennis Dahlen serves as the CFO of Mayo Clinic, one of the largest nonprofit academic health systems in the U.S., with $13.9 billion in annual revenue and more than 60,000 employees.
Mr. Dahlen became finance chief of the Rochester, Minn.-based system in 2017. Before taking on the top finance role at Mayo Clinic, Mr. Dahlen served in various finance roles at Phoenix-based Banner Health, including as CFO from 2009 to 2017.
Here, Mr. Dahlen discusses what he thinks is the most pressing issue for hospital CFOs amid the latest COVID-19 surge, the skills finance chiefs need to succeed in today's healthcare landscape, Mayo Clinic's top financial priorities and advice he would offer to other CFOs.
Editor's note: Responses were lightly edited for length and style.
Question: What is the most pressing issue facing hospital CFOs amid the latest COVID-19 surge?
Dennis Dahlen: Selecting one issue from the many that exist is a challenge, but I would highlight the fragility of the healthcare workforce after 19 months of pandemic operations. Healthcare professionals at virtually all institutions, including Mayo Clinic, are physically tired and mentally weary. The contributing factors are well known and include the emotional toll of caring for critically ill patients with seemingly no end in sight; limited time off due to high patient volumes; added workload; and the challenge of vaccine hesitancy. We're also seeing staffing shortages in some key clinical areas. We're making appropriate adjustments to recognize and reward staff in this difficult environment and to continue attracting the best employees.
Q: Beyond financial knowledge, what skills are essential for hospital and health system CFOs to thrive in today's healthcare landscape?
DD: In no particular order, I would suggest the following:
- Baseline business acumen: CFOs need to understand business in general and the healthcare sector specifically, from operations to strategy, with a focus on the economic model that underwrites success.
- Professional curiosity: Healthcare and hospital organizations are complex, and that complexity correlates to opportunities. There is never a day, week or month in which everything is perfect, with nothing to be improved. The CFO should be curious enough to be continuously looking for opportunities and asking questions to identify them. If targets aren't apparent, a deep dive into pricing and charging methodology, into pay practices, procurement and payment approaches, or equipment and real estate leasing will likely yield results.
- Detailed knowledge of the top line (revenue): Without this detailed knowledge, it's very difficult to make informed judgments on current performance, future plans or new initiatives. In healthcare, this includes knowledge of government reimbursement, commercial payer contracts and the entire revenue cycle transactional flow for all lines of business.
- Strong influencing skills: Very few CFOs have line authority for the activities that produce performance. They exercise their craft through influence that comes from being well informed on the facts, thoughtful in analyzing them and articulate in communicating conclusions. Being consistently good at all of these brings credibility and influence, two attributes that are critical to being a successful CFO.
Q: What are two of your top priorities as Mayo Clinic's CFO heading into 2022?
DD: We're at the front end of a significant initiative at Mayo Clinic to transform the way our administrative and business support operations — including finance — strengthen our education, research and clinical practice operations. The required lift of that work is considerable and will consume significant effort in 2022 and beyond. A companion to that work is supporting Mayo Clinic's 2030 Bold.Forward. strategic plan, which involves considerable investments in technology and new platforms, digitizing clinical practice, and finding new cures and treatments for current disease states. These investments rely upon effective strategic planning to ensure they all fit together in a risk profile that is acceptable, with consistent performance to sustain the investment levels and careful stewardship of resources. I share responsibility for all of them.
Q: If you could pass along advice to another hospital CFO, what would it be?
DD: Be more than what your organization expects of you as CFO. Be the problem-solver, the solution-provider, the advance planner, the grower of new talent. Do favors for others, invest time with younger associates and network with peers. Your team and your organization will appreciate having someone in the CFO seat who is genuinely interested in understanding and addressing their challenges. For me, the variety of challenges that come with this expanded understanding of my job is deeply rewarding.