While the role of healthcare CFO is pretty standard from one organization to another, the role of treasurer can vary from a volunteer position to a unique function of the CFO.
Mark Bogen puts in long hours watching over the finances at South Nassau Communities Hospital on Long Island, New York. In return, he draws a generous paycheck and employee benefits.
His counterpart, Bob Whyte, also puts in many hours safeguarding the finances at South Nassau Communities Hospital. But Bob earns nothing for his efforts.
"My title is senior vice president and chief financial officer," Bogen explained. "Mr. Whyte's title, from a corporate perspective, is the treasurer of South Nassau Communities Hospital. He is part of the executive committee as well as chairman of the finance committee. While mine is a reasonably high-paying job, Mr. Whyte is completely voluntary member of the board and donates a lot of his time."
If that sounds surprising, it shouldn't. While the role of healthcare CFO is pretty standard from one organization to another, the role of treasurer can vary widely. At the sister hospital to South Nassau Communities Hospital – nearby Winthrop University Hospital – the role of senior vice president, chief financial officer and treasurer are rolled into one.
"Although we've seven miles apart geographically, we're probably seven million miles apart philosophically," Bogen said of how the two hospitals organize their finance reporting structures.
The treasurer as advisor
South Nassau Communities Hospital is organized as a nonprofit, so the treasurer's function is primarily as an advisor, Bogen said.
"Obviously, Mr. Whyte takes his role as a key financial advisor to the board very seriously, and he works very closely with me," Bogen said, "but it not a day-to-day operational employee role."
As to his background, Whyte said "I am a retired commercial banker. I've been on this board for almost 25 years and treasurer for just about 18 years. I served on a lot of other committees as well but this is the one that I've devoted the most time to. I really had to come up the learning curve. Accounting in healthcare is a lot different than corporate stuff. If you're going to volunteer your time, do it with gusto, and I think it's something that community members should be involved in."
So what exactly does Whyte do with his time that differs from that of Bogen? For one thing, he provides a director's view of financial matters that helps Bogen's group better communicate with – and get support from -- that group.
"Each month we get reports of the financial results for the prior month," Whyte said. "I sit down with Mark and the members of his staff and we go over the results. I will have specific questions for Mark and his team. We normally have finance meetings nine months a year. We have very dedicated board members that are on the committee and we do get into some very in-depth questions from time to time. I always plan to sit down with Mark and his team before we sit down as a committee."
Whyte provides an objective, very high-level view of in-the-trenches financial matters. He brings years of experience to the task, and especially important is his understanding of what directors need to know. He provides that key communication piece.
"As part of the financial package that we present to the finance committee each month we prepare a seven-page commentary on the highlights and some of the trending, or context of what's going on in Long Island, or New York or the broader healthcare landscape," Bogen said. "I'm always concerned that the metrics that I'm trying to communicate can be understood at the board level and I find Bob to be tremendously valuable there."
"He certainly has a much greater appreciation and all of the things going on in healthcare," Bogen said of Whyte. "At the same time he has the ability to step back and say, OK, I'm representing the other 20 members that don't have the kind of institutional knowledge that I have. He's a tremendous sounding board for me. I don't want to talk up to the board and I don't want to talk down to the board. When I have something important to say I want it to come across in a way that is meaningful for these men and women who volunteer their time. That has been a tremendous asset to me. Secondarily, anytime there is anything of a critical nature I will reach out to Bob and bounce things off of him."
The multi-headed role
Palmira M. Cataliotti doesn't have that same luxury of someone to bounce ideas off of at the executive finance level. But then again, she also serves on the Board of Directors at Winthrop University Hospital as senior vice president, CFO and treasurer.
"Winthrop University Hospital is a teaching institution," Cataliotti said. "We have a tripod mission of not just providing acute care but we also have a teaching mission as well as a research mission. Pretty much every specialty is provided by Winthrop with the exception of transplants. Our organization is $1.2 billion in revenue. We capture 17 percent of the market in Nassau County. We have the largest market share of any standalone hospital in Nassau County. We employ 7,200 individuals. We are certified for 591 beds."
When you wear many hats, individual job roles can blur, and that is the case for Cataliotti.
"It's interesting because I never really look at them in silos," Cataliotti said. "I feel that my responsibilities carry over to each one of those titles. The difference is that as treasurer I am appointed by the board. So I have a direct reporting line to the board of directors at Winthrop University Hospital, which manages the organization. My responsibility is to them specifically and directly. I have a duty of care for all of the financial transactions that occur in this organization, all monies received and all monies dispersed."
But there are certainly trends, topics and challenges that get special attention as treasurer.
"Healthcare is always changing and the regulatory changes that are imposed on us are significant. In the last two or three years they have certainly increased in intensity," Cataliotti said. "The biggest challenges are the regulatory changes. We have the ICD-10 - the International Classification of Diseases, edition 10. The rest of the world is on this edition. The United States is one of the last to upgrade. The difference is that the rest of the world does not use this for reimbursement and in the United States our reimbursement is tied to ICD-10."
"It's a huge implementation," Cataliotti said. "We have to train all our medical coders in new methodology. The number of codes is tripling and quadrupling. All the payers need to update their systems in order to adjudicate these claims. That is a significant change, and it is a big administrative burden. Then you have the federal mandates that have significant reimbursement implications like value-based purchasing, and pre-administration penalties. Those are all tied to quality."
All of this change is putting greater pressure on hospital treasurers to up their game.
"In terms of financial skills, obviously I wouldn't be here without good financial skillsets. That is the foundation," Cataliotti said. "But in order to be successful we need to be good communicators; we need to be adaptable; and we need to have agility because the environment is constantly changing. You have to be able to communicate with the operations team. You're integrated with the quality team and the operations team. You have to partner with them."
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"That is something that I've developed over time," Palmira said. "I think I know more than I ever thought I would know. You need to be a good listener; ask questions; understand what the procedures are all about; what the recovery time is like. This gets back to efficiency. You need to be mindful and respectful of what the clinical requirement is and then come up with parameters or protocols to make the overall episode of care efficient but with the best quality possible."
Finally, "I think you need to be very open-minded when you come into a hospital setting," Cataliotti said. "Its humans touching humans and there is so much variability. You need to be very ready for change, and you need to be very observant and listen to what the clinicians at the table are telling you; what your oncology officer is telling you; and then try to find the opportunities where you can provide valuable input -- looking for those efficiencies, and looking to reduce costs while maintaining quality. It's not an easy thing to do."