Dominic Nakis serves as the CFO of Advocate Aurora Health, one of the largest nonprofit health systems with $13.1 billion in annual revenue and about 75,000 employees.
Mr. Nakis is responsible for the health system's overall financial well-being and strategy, including revenue cycle management, reporting, decision support and internal audits, among other responsibilities.
Mr. Nakis became finance chief of Advocate Aurora Health when it was formed by the merger of Downers Grove, Ill.-based Advocate Health Care and Milwaukee-based Aurora Health Care in April 2018. Prior, Mr. Nakis served as CFO of Advocate Health. Overall, Mr. Nakis has been at Advocate or Advocate Aurora Health for more than 30 years.
Here, Mr. Nakis shares with Becker's the most pressing issue currently facing hospital CFOs, Advocate Aurora's planned capital projects, the health system's top financial priorities for 2022 and advice he'd offer to his peers.
Editor's note: Responses were edited lightly for clarity and style.
Question: What is the most pressing issue facing hospital CFOs amid the latest COVID-19 surge?
Dominic Nakis: The most pressing issue is the stress on our team members and ability to staff and fill numerous open positions. Continuing to vaccinate more people will reduce the severity of future surges, lessen the strain on hospital resources and restore a much-needed measure of predictability.
The ongoing surge creates uncertainty that renders financial planning more difficult. While our overall patient volumes have rebounded nicely from 2020 as patients return for elective surgeries and other important care, COVID-19 continues to stress our operations and finances. The late-summer delta surge brought sicker inpatients who required longer lengths of stay, which contributes to increased expenses. We're seeing higher costs not just for drugs, personal protective equipment and other supplies, but also for labor, because attracting and retaining front-line workers becomes more difficult as the pandemic stretches on.
Q: What are Advocate Aurora's top financial priorities for 2022?
DN: We are focused on supporting the execution of our three-pronged strategic plan to drive best-in-class results in safety, health outcomes, growth and affordability; improve our consumer experience; and develop new care models and consumer-facing businesses to serve people's broader health and wellness needs. These areas of focus will support our drive to sustain positive operating margins and support our desired strategic investments and capital expenditures related to our Transformation 2025 strategic plan.
Q: What capital projects does Advocate Aurora have in the works?
DN: Our investments and capital spending are evaluated and planned in the context of how they support our strategic direction. Capital and investment capacity is determined in conjunction with the development of our long-range financial plan. For 2022, we have planned significant investments earmarked to support Advocate Aurora Enterprises, a subsidiary established in 2021 and focused on investing in whole person health; health information technology spending in the areas of implementing an enterprise resource planning system; and enhancing cyber security defenses and digitization projects to enhance the consumer experience.
Additionally, we are expanding our ambulatory care footprint with the addition of at least six new sites in our markets. We are also engaged in three other significant capital projects. We are building a hospital and medical office building in Mount Pleasant, Wis., which we look forward to opening to patients in 2022. To replace some of our oldest inpatient acute care operations, we are developing a medical campus in Sheboygan, Wis., that is expected to be completed in 2022, and we are expanding our Center for Advanced Care at Advocate Illinois Masonic Medical Center in Chicago to replace existing facilities and expect to be complete in 2024.
Q: What skills are essential for health system CFOs to thrive in today’s healthcare landscape?
DN: While health system CFOs will always need to retain an operational focus and ensure solid operating margins, today they also need to assume larger strategic planning and change management responsibilities. As health systems become geographically larger and more complex, finance leaders need to reach across business units and clinical operations to understand priorities and challenges. They then need to augment these insights with data to guide better strategic decision-making across the organization. This work will lead to improved financial and patient outcomes and ensure that health systems can fulfill their purpose of helping people live well for many years to come.
Q: What advice would you offer to another healthcare CFO?
DN: Embrace the challenges of complexity. As our job responsibilities expand, so do the opportunities. We need to constantly look forward to finding new ways to generate revenue, evaluate new delivery models and partnerships, and leverage technology and automation.