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Healthcare spending was projected to increase by 5.4 percent annually from 2017 to 2022 according to the US and Global Health Care Industry Outlook compiled by Deloitte. That’s over $10 trillion by 2022.
The United States continues to outpace other countries on projected spending — both in public and private healthcare — with a grand total of $5.7 trillion projected from 2017 to 2026. Yet with nearly double the spending compared to similar countries, the positive health outcomes are worse in the United States.
Healthcare organizations who want to stay competitive must deliver positive outcomes while running a sustainable, profitable business. Many healthcare providers are now opting to outsource the expertise of interim Chief Financial Officers (CFO) to steer them toward a healthy financial future.
“Many organizations bring me in to provide an unbiased point of view and give recommendations before bringing on a permanent CFO or Controller,” explained one Interim CFO who has worked with many non-profit healthcare systems, critical access hospitals, and clinics around the US. For him, that often means meeting with and learning from everyone in the finance department, looking at production, completion of monthly financial statements, and addressing issues in underlying financials to ensure consistent reporting to the board.
An interim CFO is a pro at financial strategic planning and brings hands-on experience to the table. They first help healthcare organizations understand their current financial situation then guide them in making informed accounting and investment decisions about their healthcare practice or business. The result is a stable and profitable future, in the everchanging, disruptive healthcare industry.
From hospitals to clinics, to health tech companies to laboratories, every healthcare organization faces a multitude of financial challenges. Whether their financial problems are revenue-driven, competitor based, or revolve around patient outcomes, it is difficult to prioritize which issue to resolve first. A seasoned interim or fractional CFO knows how to decipher all those moving parts, and take action fast.
Interim CFOs are no strangers to challenging situations. One CFO described a history of assignments that ranged from a hospital that couldn’t reconcile cash for 2 years, to a nursing home with tens of millions in loans and broken covenants with the bank. The interim CFO also helped a small town hospital that had terminated their full-time CFO by training their Controller. Under this guidance, the Controller was empowered to transition into the future CFO role.
Some healthcare providers simply need basic guidance with their financial statements, while others require a deep analysis of how well or how poorly their financial systems operate. Other organizations need to determine if their financial capabilities are up to par for their new business goals, whether that means improved level of care, expansion, or conducting due-diligence and integration of a merger. In any case, an experienced interim CFO can quickly identify what financial housekeeping must be done first, and what fires must be put out immediately.
An interim CFO empowers healthcare providers, to not only develop and implement a strong financial plan but also ensures the healthcare provider is well-positioned for growth. In turn, healthcare organizations can then confidently make decisions that increase financial stability in the future.