As CFO of Stanford (Calif.) Health Care, Linda Hoff is responsible for finance strategy, planning and financial reporting at the academic health system.
Ms. Hoff came to Stanford in 2017, after serving as senior vice president and CFO of Portland, Ore.-based Legacy Health.
She also has served as president and CEO of Physicians Plus Insurance Corp. in Madison, Wis.
Here, Ms. Hoff explains her biggest challenge, discusses her organization's cost containment strategies, and offers advice for other hospital CFOs.
Note: The following responses were lightly edited for length and clarity.
Question: What is the greatest challenge hospital and health system CFOs faced in 2018? Do you expect this to be their biggest challenge in 2019 as well?
Linda Hoff: The greatest challenge in 2018, and probably the last decade and looking forward to future decades, is the affordability of healthcare. With rising healthcare costs, it's top of mind for everyone. It's the No. 1 challenge we have.
Q: How do you feel the CFO role has evolved in recent years?
LH: We are in a time period where it's table stakes to be more of a strategic thinker and involved in operations and quality, all of the aspects of the healthcare business that go beyond the nuts and bolts of finances.
Q: How does Stanford's role as a large academic health system affect your responsibilities as CFO?
LH: If you think about healthcare as a continuum, a significant portion of healthcare is primary care and routine care, and there is a sliver of healthcare academic medicine provides as far as unique expertise in rare diseases, transplants, research and innovative healthcare. Being able to continuously provide the resources to fund the research and education necessary to be the resource to the world is a unique challenge academic medical centers face. Federal resources aren't enough to meet this piece of an AMC's mission. Most academic medical centers are educating far more residents than the reimbursement models through the federal government are providing for. Another example is research grants. National Institutes of Health grants exclude reimbursement for a significant proportion of costs associated with the research being conducted.
Q: What are your top cost containment strategies?
LH: One is standardization of clinical care, which also assumes a focus on quality. Engaging physicians in participating in efforts to standardize care is a big part of the work we are doing at Stanford Health Care. We can drive efficiency by improving the information available to physicians. We are working to improve these tools.
Driving efficiency in administrative functions with a focus on improved staff productivity is another cost containment strategy. We are also looking for ways to better utilize high cost clinical space, especially in the ambulatory environment. Analysis of how space is utilized and sharing the financial impact of vacant space helps the organization focus on improving.
Q: What's one piece of advice you would give another hospital CFO?
LH: Become a partner with physicians in a way that develops a mutual respect for each other's role. The administrative side cannot be successful without the support and trust of the physicians. That's fun and rewarding for me. I would invest in improving communication with not just the physicians, but with all of the organization, focused on being as clear and concise as possible, to ensure they better understand their respective roles in the success of the organization.
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