As healthcare providers grapple with more complex issues, the CFO is being asked to take on a leadership role that in many cases extends beyond the realm of accounting.
“A much more sophisticated skill set is now required of the healthcare CFO,” said Nelson Mann, a senior partner at Witt/Kieffer, a healthcare executive search firm. “Hospitals and health networks are looking for a more strategic, versus operational, executive – someone with the kind of background and expertise suited for a top leadership role.”
As a result, Mann said he believes these CFOs will become leading candidates for their organization’s CEO positions in the coming years.
All of this change has some asking if today’s CFO still needs a CPA.
The answer is yes, said Tom Quinn, another senior partner at Witt/Kieffer. An MBA may make more sense from a strategic point of view, but “the CPA is still very important. It makes for a less risky hire.”
The greater demands being placed on healthcare CFOs require individuals that meet a much broader set of criteria.
For starters, some experience in healthcare is a must. There is too much change going on in the industry, and the CFO plays too critical a role today to not understand the issues facing it, Quinn said.
“The track record for those hired from outside of healthcare is pretty mixed. They still need some healthcare experience,” he said.
“Historically, organizations hire candidates that have grown up in the healthcare system or in physician groups,” Quinn said. In cases that he knows of where a CFO was hired from outside the healthcare industry, “they still had some experience on a [healthcare] board.”
As to credentials, a traditional CPA and an MBA degree are preferred today. If given the option of only one or the other in a hire, “most will still say the CPA,” Quinn said.
Terri Houchen agrees.
As director of candidate progression at Kansas-based healthcare executive search firm B.E. Smith, Houchen exclusively deals with the placement of executive leaders in the healthcare industry. She has worked with “hundreds of CFOs,” and the trend is definitely away from the traditional numbers cruncher.
Pick a region of the country, and pick a market size, the desire everywhere is for a CFO that can serve as the right-hand man or woman to the CEO.
“I am rarely asked for someone who isn’t going to serve on the leadership team,” Houchen said.
The good news: CFOs are evolving nicely into this new role, Houchen said. They have been able to expand their skills as their role demands have increased.
“Many CFOs have really grown and really understand the needs of the organization,” she said.
So what are the skills that today’s healthcare CFO should have?
On the business side, they should have experience in helping to drive an organization; in finding new revenue sources; in managing reimbursements; in organizational modeling; in physician employment; with mergers and acquisitions; and they should have vision.
In terms of personal traits, CFOs should be collaborative, flexible, confident, a coach and a team builder, Houchen said.
And a CFO candidate in healthcare should have industry experience. “With all of the challenges and complications in healthcare, it is desirable to have some background in healthcare,” she stressed.
As to the idea of the CFO being a strong candidate for the CEO role, Houchen said it is not unusual to see a CFO moving into the CEO position. “Oftentimes, I see it when the CEO leaves, and the CFO will take over on an interim basis.”
In the meantime, Houchen said 2014 should be a good year for those aspiring to CFO posts in healthcare, and also for those looking to hire them.
“The good news on the recruiting front is that, it is competitive, but there are many individuals out there that can do this type of work,” Houchen concluded.