CFO: 3 Themes Shaping Healthcare Executive Strategy Insights overheard at Becker's 12th Annual CEO + CFO Roundtable

Focusing on the workforce and strategic partnerships to navigate ongoing cost pressures and operational complexities

Healthcare finance leaders at Becker's 12th Annual CEO + CFO Roundtable underscored the urgent need for strategic agility to address ongoing financial and operational challenges. Many panelists noted that, despite some improvements in operating cash flow, health systems continue to feel the effects of inflation due to reimbursement rates locked in years in advance and rising costs for critical resources, including labor. CFOs are taking a proactive stance to address these challenges by revisiting vendor contracts, tightening supply chain processes and building financial resilience through adaptive cost-control measures.

Several CFOs emphasized the value of predictive analytics, not only in identifying areas of immediate cost savings but also in forecasting future financial needs based on patient volume, service demand and regional economic trends. Robin Damschroder, president of the value-based enterprise and CFO at Detroit-based Henry Ford Health, said her organization is leveraging a variety of data and analytics-focused tools to drive efficiency and unburden its workforce of 50,000 employees across 13 hospitals and 550 care sites.

"We have a lot of employees doing 'chores,' and whether it's in the business office or at our health plan — throughout the delivery system, we want to allow them to get to a point where they're looking into the record to collect information so they can actually make the decision they need, and they're spending more time on that than they are actually making the decision," she said.

A guiding question in these efforts, Ms. Damschroder added, has been determining how to create more time for employees, from administrative staff to physicians.

"We are focusing a lot of our energy there, particularly looking at the products being developed through the venture funds we participate in, as well as the energy that's being put forward by our own employees and physicians in creating opportunities for us to take advantage of."

Labor shortages in healthcare, particularly in nursing and primary care, were another key financial concern raised by panelists. With these shortages projected to continue, CFOs are working closely with HR and operations to devise innovative solutions that attract and retain talent while managing labor costs.

"There's just the fundamental reality of a tremendous shortage of every type of clinician out there that, regardless of what's done with economics or anything else, that's going to be an ongoing reality for us," Jim Molloy, executive vice president, CFO and treasurer at New Orleans-based Ochsner Health, said in a keynote panel. "The focus on that is going to have to be from a lot of angles that we haven't traditionally thought about in order to solve it."

In the same keynote discussion, Kevin Smith, CFO at St. Louis-based SSM Health, said his health system's recent culture survey underscored the ongoing nature of this issue. At SSM Health, bolstering the workforce is a top priority, he said, among establishing better payer collaboration and cybersecurity.

"Employees are feeling overwhelmed," Mr. Smith said. "How do we ensure we're driving efficient operations by not just paying more? How do we figure out how to develop a culture that's all-inclusive, gets employees to stay and also attracts other employees to the area as well?"

Flexible benefits, career advancement programs and a culture of employee well-being were cited as crucial for retaining skilled staff, but panelists also noted the role of automation in offsetting labor demands. For example, robotic process automation in administrative functions can help reduce staff workload, allowing healthcare staff to focus on patient care, ultimately lowering operational costs and increasing productivity.

Mr. Smith reiterated the value of technology in augmenting the workforce — but doing so in cost-effective ways, he cautioned, will require a careful, strategic approach.

"I feel like healthcare is the only industry where you have technology implemented but your costs go up," he said. "We really need to think about doing things differently for the long term; and really, if we can help bend that curve on inflation by doing things in-house, by having better efficiency, better access to information and really changing the way we deliver healthcare, I think that's how we'll be able to win this."

Other discussions highlighted the expansion into outpatient and home-based care as a means to manage both financial and operational pressures. This shift reduces traditional brick-and-mortar overhead costs while meeting patients' preferences for convenient care options and simultaneously easing inpatient capacity constraints.

In a panel session on strategies for hospital profit protection, Dominica Tallarico, executive vice president and COO at Minneapolis-based Allina Health, said her health system's outpatient and virtual care programs have been a key contributor to financial stability efforts. The health system has made investments in hospital-at-home, as well as skilled nursing facility-level care in the home.

"Virtual care, ambulatory care and care in the home are essential to our future," Ms. Tallarico said. "The days of just protecting heads and beds are quite over, and you have to think about the right care at the right place at the right time."

Chicago-based Rush University System for Health is making similar investments. Chief Innovation Officer Anil Saldanha said access is a driving motivator behind Rush's approach to outpatient care.

"We want to bring patient care to where the patients are. There are a lot of underserved, underrepresented pockets around the city where we are building our outpatient centers and even the partnerships that we are trying to bring in," Mr. Saldanha said. He noted that, soon, Rush will have approximately 77 outpatient centers in the Chicago region providing physiotherapy and rehab care, thanks to a partnership with Select Medical.

Though these models require significant initial investments, CFOs at the event agreed they provide long-term benefits by reducing overhead and creating a more sustainable care delivery model. Together, these strategies reflect a trend toward operational flexibility that allows CFOs to manage costs in real time, adapting to both financial constraints and patient needs.

Balancing cost containment with transformation

Rising costs and lagging reimbursements were frequently noted as core concerns across panel discussions at Becker's 12th Annual CEO + CFO Roundtable. Here, healthcare CFOs are pivoting their strategies to ensure they're balancing cost containment with the imperative to make forward-looking investments that will support long-term growth.

Ms. Tallarico from Allina Health said she's approaching these challenges with performance transformation and business transformation. From the standpoints of revenue growth, cost management and clinical effectiveness, she said honing operations is essential — particularly in an environment where inflation rates are outpacing reimbursement rate increases and denials are growing.

"We say in our organization, those challenges are opportunities," Ms. Tallarico said. "We've been around for 140 years and we pledge we'll be there for another 140 years. But the challenge to leadership, then, is, how are we thinking about performance transformation?"

In a panel discussion on innovation for financial impact, Chris Allen, CFO at Keck Medicine of USC in Los Angeles, echoed a similar sentiment on performance transformation. As a relatively "new" health system of 17 years, Mr. Allen said the organization is developing "systemness" and identifying opportunities to leverage its newfound scale for "creating synergies across the system." The organization continues to grow its footprint, purchase practices and acquire ambulatory surgery centers.

"That's going to require a new, innovative way to think about how we operate — not just as AMCs, but an entire system and how we optimize and utilize our facilities to take care of our patients," Mr. Allen said. "From a pure finance standpoint, with my team, we are really just trying to go from being spreadsheet-driven individuals to really focusing on how we use data to help enhance the overall performance of the health system."

Other systems are balancing financial and performance needs by identifying alternative sources of funding. Jason Lineen, chief strategy officer at UVA Health in Charlottesville, Va., encouraged peer leaders to be disciplined in growing service lines that are known to generate margins — and to not be afraid of getting creative.

"Let's not forget there's about 80% of what we do that drives a deficit, and we need to find creative ways to keep the mission," Mr. Lineen said. He offered a recent example at UVA Health, where the organization identified significant behavioral health needs in the community of Charlottesville. In response, the health system is opening a new pediatric neurodevelopmental and behavioral health center.

Patients from all over Virginia and even outside the state will be coming to the center, Mr. Lineen said. During the planning phase, it was clear the "traditional economics" wouldn't fund it sustainably — but the health system had a big vision, he said, noting it was an all-hands-on-deck effort to fundraise for this project, which yielded large gifts that will support current and future operations.

"I think we have to think really creatively about alternative funding sources to be able to deliver on our mission as institutions," Mr. Lineen said. "We love the cancer service line, we love the heart and vascular service lines where those traditional margin pools are, but we've got a lot of other services that we need to find creative ways to fund."

Finance leaders also discussed the need for judicious spending in areas that yield high-impact returns, particularly in technology, patient experience and workforce retention. While immediate financial pressures demand a focus on cost-cutting, CFO panelists emphasized that transformational investments are equally essential to building resilience and competitiveness in a changing healthcare landscape.

In a panel session on health system investments for the next three years, Gaston Bushiri, vice president of finance at Columbus-based OhioHealth, said technology, partnerships, and workforce safety and well-being are priorities driving the health system's investments. The system's investments go upstream, too — Mr. Bushiri noted how last year, OhioHealth contributed about $25 million to a local community college's nursing associate program.

"That was a way for us to really get ahead of that pipeline," Mr. Bushiri said. "It's helping to ensure we have those vocational schools for our employees and a workforce in the future."

Patient-centric care also emerged as a strategic investment priority, especially in light of rising consumer expectations and competition from non-traditional healthcare providers. CFOs discussed the potential of digital health platforms, like virtual nursing and patient engagement portals, in delivering a more seamless experience that meets new patient demands. Investments in these areas are showing promise not only in enhancing patient satisfaction but also driving efficiency by reducing administrative burdens.

Ultimately, CFOs underscored that future success hinges on a balanced investment approach that does not sacrifice long-term value creation for short-term gains. They advocated for prioritizing investments in technology and patient-centric models that support operational efficiencies and set the stage for sustainable growth in a value-based care landscape.

Care model innovation: a key to addressing shifting industry demands

CFOs at Becker's 12th Annual CEO + CFO Roundtable illuminated the importance of innovation in care delivery models as health systems prepare for evolving patient and labor demands. With persistent workforce shortages — both current and projected — finance leaders agreed effective care model strategies hinge on their ability to address patient expectations and preferences, drive quality outcomes and adapt to staffing constraints.

"There aren't enough people to take care of the patients we have coming through the door," Joshua Snyder, senior vice president and CFO at Penn Medicine Chester County Hospital in West Chester, Pa., said. "We've got to find a way to change care models or be flexible enough with the people in those care models so they don't have to work every fourth weekend."

Mr. Snyder said the hospital also has explored shift schedules shorter than the typical 12-hour shift, in light of staff feedback. "Unfortunately, that flexibility causes inefficiency from a financial perspective," Mr. Snyder added.

To address this tension, the hospital is strategizing how to create different types of full-time employee roles to "see what type of models we can come up with in order to be flexible but also maintain the margin," he said.

Technology plays a central role in these workforce and care model innovations. CFOs shared how they're deploying automation and AI to streamline administrative tasks, reduce manual workloads and enhance workflow efficiency, allowing staff to focus on patient care rather than paperwork. Panelists acknowledged these tools are critical to optimizing productivity without exacerbating burnout. And, virtual care and remote patient monitoring have allowed systems to extend their reach without a proportional increase in staff, which has been particularly valuable in regions facing severe provider shortages.

Robin Damschroder of Henry Ford Health said the health system is investing about $12 million over three years in what they're calling "front door transformation."

"It's not just coming to the clinic door or the virtual door," Ms. Damschroder said, emphasizing the importance of systems thinking about growth in addition to cost savings. "It's really about aligning all of those things. If patients want same-day service, the ability to do that fairly seamlessly is key."

Ms. Damschroder said Henry Ford Health is making strides here, in large part, with online scheduling — an effort that most clinical departments are engaged in, with the goal of increasing online scheduling from 6% to 20% within a three-year time period. "We believe that investment is going to be a differentiator in our market," she said.

CFOs also discussed how they're rethinking care models to align with shifting patient expectations. There was consensus on the need for outpatient expansion, with a particular focus on outpatient clinics, ASCs and in-home care services. These models not only provide care in a more accessible and patient-centered manner but also help alleviate inpatient capacity pressures, allowing systems to better manage costs.

For example, panelists noted investments in mobile health units and remote monitoring systems, which enable health systems to provide care closer to patients' homes and align with current consumer trends of convenience and accessibility. Several CFO panelists underscored the criticality of access to drive revenue.

"I think the big issue for us is patient access, which connects a lot of those dots in that we're also trying to grow and grow organically," Jim Molloy of Ochsner Health said. "We've gone through a lot of M&A in the past, and we are sort of taking a small timeout on that, but one of our issues is we're not serving the population that we currently have, completely and in the way we want."

Serving the Medicare population, which is expected to increase substantially in the next five years with the "silver tsunami," is raising concerns for finance leaders. Panelists noted how they anticipate this trend will require a delicate balancing act: handling higher patient volumes while navigating cost pressures.

"We still have to learn how to make money on Medicare," Mr. Molloy said. "It's going to bring a new reality for health systems and what we're going to have to do with technology and addressing tough issues that involve tremendous integration with our clinical and operational people, if you're talking from a finance perspective, in order to solve these things."

In embracing innovation here, CFOs are also positioning their health systems for a future where value-based care models are increasingly the norm. Kevin Smith of SSM Health predicts the fee-for-service model will face significant challenges in the coming year.

"Fee-for-service is really where organizations have been able to drive margins," he said. "With the shift to value-based care, we're going to have to be really courageous about moving lower-acuity services to an ambulatory setting, and we have to do that before payers actually push us there."

Care model transformation led by CFOs and the broader C-suite will enable organizations to adapt to workforce limitations and meet rising patient expectations and service demands. Panelists emphasized the key to effective innovation lies not only in embracing new tools but aligning these tools with a strategic vision that prioritizes both financial sustainability and quality patient care — a dual focus paving the way for a more resilient healthcare system that can thrive in an era of constant change.