The aging of hospital executives has been well-documented, as a recent Witt/Kieffer survey found 41 percent of recent healthcare CEOs have never been a CEO before. While there has been a rise of first-time hospital CEOs, the same holds true for hospital CFOs.
As new C-suite level executives take office, what kind of training and guidance do they have? Where can CFOs turn when a budget starts to look sour or if a transaction gets complicated and time-consuming? Who is Mr. Miyagi to their Karate Kid?
The Healthcare Financial Management Association has always been a bastion as a membership organization for healthcare CFOs and other healthcare financial executives, but a newer group, Warbird Consulting Partners, is trying to enhance the one-on-one guidance younger hospital CFOs may need through its CFO Consulting Network.
The dawn of new CFO networking
Almost three years ago, Doug Fenstermaker approached Mike Draa with an idea: Let's provide an outlet for young and incumbent hospital and health system CFOs to manage the difficult times ahead.
Mr. Fenstermaker, former CFO of HealthEast Care System in St. Paul, Minn., says there were a slew of people who have spent 20 to 30 years in healthcare finance as CFOs and other titles who were no longer in healthcare but could be utilized as a resource. "I told Mike it's a shame there are all these years of experience; they've been there, done that in healthcare finance," he says. "They've been through many difficult times, and they really known how to do this."
Mr. Draa, CEO and managing director of Warbird, which also provides other accounting and financial solutions services, listened and realized there was potential for CFOs to connect on a new level, almost like a Big Brothers Big Sisters program. Although they admit hospital CFOs are very well networked around the country and can easily communicate with each other for the most part, Mr. Draa says a collaborative networking service would be able to prop up CFOs in times of greatest need. "There are hospitals going through bond issues and acquisitions," he says. "Healthcare groups are merging. Medicare reimbursement is getting to be less and less. We wanted to build this framework and partnered."
Mr. Fenstermaker and Mr. Draa then created the CFO Consulting Network within Warbird with the intention to help younger and newer hospitals CFOs face the daunting challenges of healthcare reform.
"There's so much work that needs to be done, and some hospitals need some real help and talent with folks that have been around the block," Mr. Fenstermaker says. "That's the fundamental idea behind it."
So, what are the issues?
Mr. Fenstermaker has more than 30 years of healthcare financial experience. Before HealthEast, he worked within the managed care and revenue management sector at Legacy Health System in Portland, Ore., and he also was CFO of Good Samaritan Hospital, also in Portland, as it merged into Legacy Health. He has witnessed a lot of dramatic shifts in healthcare reimbursements and the structure of hospital finances, but the Patient Protection and Affordable Care Act — regardless of the Supreme Court's decision — is something hospital CFOs have toward the top of their issues to tackle.
"I grew up through the DRG era that [former President Ronald] Reagan put in place in the 1980s, and that was difficult," Mr. Fenstermaker says. "There was a transitional period of five to 10 years. You're not going to see that this with healthcare reform. There will be two to three years of transition because the federal government wants its money back faster than that. There is a great deal of unknowns, but the process is already well under way."
The Medicare and Medicaid reimbursement pressures have directly impacted other tangential issues, such as debt service and access to capital, and consequently, hospital CFOs are engaged in more frequent transaction and acquisition conversations. Hospitals — especially smaller community hospitals and critical access hospitals — have to seriously consider the merger and acquisition market as their ability to obtain high-rated loans and fund large-scale projects becomes harder to accomplish.
"Systems are already becoming much larger organizations — not only from the standpoint of consolidation with other hospitals but also with physicians and physician organizations," Mr. Fenstermaker says.
The CFO networking group's expertise, however, is much broader than how to handle healthcare reform. The CFO consultants can lend time and support to a hospital CFO if he or she is experiencing too many projects at once. For example, if a major bond refinancing simultaneously occurs as a hospital is preparing to acquire a large physician practice, a hospital CFO may not be able to devote 100 percent of his or her attention to each of the major issues. "I suspect that independent of reform, those things will always be out there and in demand," Mr. Fenstermaker says.
How hospital CFOs can act
Currently, Warbird's CFO Consulting Network consists of six senior CFO consultants: David Ebel, James Fox, Robert Gill, David Kiehn, Michael McGinnis and Pamela Vukovich. Their prior hospital experience ranges from interim hospital CFO positions at Stanford Hospital in Palo Alto, Calif., to permanent hospital CFO tenures at Mayo Clinic in Rochester, Minn., Fairview Health Services in Minneapolis, Legacy Health and more.
"This is something we've incubated," Mr. Draa says. "Doug and the team are assisting healthcare organizations, and we are adding to this an elite group of CFOs. These folks are at the top of their game in terms of experience level and what they've seen, and they can help CFOs out with projects as they are going through various [challenges]."
Whether it's the impending regulations of the healthcare reform law or the typical day-to-day frenzy a hospital CFO endures, an experienced helping hand may be just enough to keep the younger generation of hospital CFOs sane.
"Some CFOs are stressed and are worried about the economic future of their own organization," Mr. Fenstermaker says. "They may not be sure what the right strategic direction should be at this point, and it makes it difficult to take any action for the long-term future. This [network] is intended to help incumbent CFOs manage the difficult times going forward."
As new C-suite level executives take office, what kind of training and guidance do they have? Where can CFOs turn when a budget starts to look sour or if a transaction gets complicated and time-consuming? Who is Mr. Miyagi to their Karate Kid?
The Healthcare Financial Management Association has always been a bastion as a membership organization for healthcare CFOs and other healthcare financial executives, but a newer group, Warbird Consulting Partners, is trying to enhance the one-on-one guidance younger hospital CFOs may need through its CFO Consulting Network.
The dawn of new CFO networking
Almost three years ago, Doug Fenstermaker approached Mike Draa with an idea: Let's provide an outlet for young and incumbent hospital and health system CFOs to manage the difficult times ahead.
Mr. Fenstermaker, former CFO of HealthEast Care System in St. Paul, Minn., says there were a slew of people who have spent 20 to 30 years in healthcare finance as CFOs and other titles who were no longer in healthcare but could be utilized as a resource. "I told Mike it's a shame there are all these years of experience; they've been there, done that in healthcare finance," he says. "They've been through many difficult times, and they really known how to do this."
Mr. Draa, CEO and managing director of Warbird, which also provides other accounting and financial solutions services, listened and realized there was potential for CFOs to connect on a new level, almost like a Big Brothers Big Sisters program. Although they admit hospital CFOs are very well networked around the country and can easily communicate with each other for the most part, Mr. Draa says a collaborative networking service would be able to prop up CFOs in times of greatest need. "There are hospitals going through bond issues and acquisitions," he says. "Healthcare groups are merging. Medicare reimbursement is getting to be less and less. We wanted to build this framework and partnered."Mr. Fenstermaker and Mr. Draa then created the CFO Consulting Network within Warbird with the intention to help younger and newer hospitals CFOs face the daunting challenges of healthcare reform.
"There's so much work that needs to be done, and some hospitals need some real help and talent with folks that have been around the block," Mr. Fenstermaker says. "That's the fundamental idea behind it."
So, what are the issues?
Mr. Fenstermaker has more than 30 years of healthcare financial experience. Before HealthEast, he worked within the managed care and revenue management sector at Legacy Health System in Portland, Ore., and he also was CFO of Good Samaritan Hospital, also in Portland, as it merged into Legacy Health. He has witnessed a lot of dramatic shifts in healthcare reimbursements and the structure of hospital finances, but the Patient Protection and Affordable Care Act — regardless of the Supreme Court's decision — is something hospital CFOs have toward the top of their issues to tackle.
"I grew up through the DRG era that [former President Ronald] Reagan put in place in the 1980s, and that was difficult," Mr. Fenstermaker says. "There was a transitional period of five to 10 years. You're not going to see that this with healthcare reform. There will be two to three years of transition because the federal government wants its money back faster than that. There is a great deal of unknowns, but the process is already well under way."The Medicare and Medicaid reimbursement pressures have directly impacted other tangential issues, such as debt service and access to capital, and consequently, hospital CFOs are engaged in more frequent transaction and acquisition conversations. Hospitals — especially smaller community hospitals and critical access hospitals — have to seriously consider the merger and acquisition market as their ability to obtain high-rated loans and fund large-scale projects becomes harder to accomplish.
"Systems are already becoming much larger organizations — not only from the standpoint of consolidation with other hospitals but also with physicians and physician organizations," Mr. Fenstermaker says.
The CFO networking group's expertise, however, is much broader than how to handle healthcare reform. The CFO consultants can lend time and support to a hospital CFO if he or she is experiencing too many projects at once. For example, if a major bond refinancing simultaneously occurs as a hospital is preparing to acquire a large physician practice, a hospital CFO may not be able to devote 100 percent of his or her attention to each of the major issues. "I suspect that independent of reform, those things will always be out there and in demand," Mr. Fenstermaker says.
How hospital CFOs can act
Currently, Warbird's CFO Consulting Network consists of six senior CFO consultants: David Ebel, James Fox, Robert Gill, David Kiehn, Michael McGinnis and Pamela Vukovich. Their prior hospital experience ranges from interim hospital CFO positions at Stanford Hospital in Palo Alto, Calif., to permanent hospital CFO tenures at Mayo Clinic in Rochester, Minn., Fairview Health Services in Minneapolis, Legacy Health and more.
"This is something we've incubated," Mr. Draa says. "Doug and the team are assisting healthcare organizations, and we are adding to this an elite group of CFOs. These folks are at the top of their game in terms of experience level and what they've seen, and they can help CFOs out with projects as they are going through various [challenges]."
Whether it's the impending regulations of the healthcare reform law or the typical day-to-day frenzy a hospital CFO endures, an experienced helping hand may be just enough to keep the younger generation of hospital CFOs sane.
"Some CFOs are stressed and are worried about the economic future of their own organization," Mr. Fenstermaker says. "They may not be sure what the right strategic direction should be at this point, and it makes it difficult to take any action for the long-term future. This [network] is intended to help incumbent CFOs manage the difficult times going forward."
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