Wanted: CFOs with skills beyond finance - chief financial officers

Healthcare Financial Management, Oct, 1995 by Judith Nemes

Chief financial officers (CFOs) looking for employment in the healthcare industry are discovering they are in very good company. Executive recruiters say there never has been a more abundant number of high-caliber CFOs available for healthcare organizations to choose from.

Some healthcare financial executives lose their jobs after two or more hospitals join to become part of a larger integrated healthcare system. Consolidation of administrative positions often results in one CFO being asked to assume the duties previously performed by his or her counterparts at the other institutions. In other merger situations, healthcare recruiters say, some CFOs choose to leave because they do not like the people or the politics of the newly formed organization.

Either way, the market is flooded with good candidates.

"These days, you cannot move into a CFO slot if you do not have CFO experience. It is just too busy a marketplace," says Sheila Herr, who operates Recruiters of Healthcare, a Palm Beach, Florida-based recruiting firm that specializes in executive searches for the for-profit sector of the industry. "There are many seasoned CFOs out there looking for work, and healthcare companies are getting more particular about whom they hire because they have the luxury to do so," Herr explains.

While recruiters say search activity is occurring at all types of healthcare organizations, the bulk of new job searches for CFOs are being initiated at the corporate level. Not surprisingly, many of the corporate positions being filled are located at organizations forming new integrated systems.

The skill to maximize reimbursement -- once among the most soughtafter qualities in a CFO -- has dropped a few notches in importance for organizations hiring financial executives. Currently, healthcare organizations are recruiting CFOs who have hands-on experience in areas beyond the traditional financial arena. Recruiters say expertise in managed care, information systems, and strategic planning are the three big-ticket skills that make CFOs who have experience in these areas stand out among their peers.

Managed care skills for CFOs are imperative in today's changing healthcare marketplace. Managed care strategy often falls under the CFO's scope of responsibilities if the healthcare organization is not large enough to have a separate administrative position to oversee managed care, says Michael Doody, a partner at Witt/Kieffer, Ford, Hadelman & Lloyd, an Oak Brook, Illinois, healthcare executive search firm. More specifically, Doody says, many healthcare systems are searching for CFOs experienced in capitation issues because the systems are facing complex contracting arrangements and need knowledgeable CFOs to interpret the fine print.

In addition, senior financial executives switching to new healthcare organizations are finding their strategic planning skills vital to their new roles, recruiters say.

"With all the mergers and integration taking place, a healthcare organization needs someone who has a broad vision and the ability to integrate the financial functions of hospitals and other healthcare-related entities," says Joan Hutton, president and chief executive officer of The Hutton Group, Inc., a healthcare executive recruiting firm in Vero Beach, Florida.

In fact, organizations of all sizes involved in searches are looking for CFOs who have the ability to see the big picture and can help shape their organizations' future directions.

"We recently started a CFO search for a 100-bed hospital, and administrators there told us they are looking for a strategist instead of the technician who does the number-crunching," Doody says. 'They said they need someone who understands managed care and can understand the trade-offs that take place at the negotiating table."

CFOs adept at cost containment do well in job searches because more organizations are attempting to be low-cost providers and need CFOs experienced in cost containment to accomplish this goal, Doody says.

It should come as no surprise to hear recruiters say that experience with information systems is an important skill CFOs need to market themselves to healthcare organizations. What has changed is how significant that skill has become to institutions looking for CFOs, according to Hutton.

"About five years ago, organizations started putting emphasis on hiring CFOs who are experts in financial applications. However, in the last two years, CFOs with financial applications backgrounds have become absolutely critical for organizations to bring on board," Hutton says. "You can no longer work with finances in a healthcare organization without having an understanding of the information systems applications of financial matters -- including reimbursement, the business office, and managed care."

CFOs who have mastered the financial applications part of their jobs enjoy greater employment opportunities than their CFO colleagues who have had little involvement in the world of information systems. An increasing number of information systems and software vendors are scouting to bring hospital CFOs on board to help with systems installations, according to Hutton.