Responsibilities of the Chief Financial Officer
In health care organizations, the Chief Financial Officer (CFO) measures and reports on the validity of meeting the business’s objectives. The CFO also measures the effectiveness of policies and procedures to attain those objectives (Nowicki, 2018). One of the CFO’s primary goals is to protect the assets of the organization and ensure that the hospital systems are running most cost-effectively. To achieve the hospital goals, the characteristics and traits of CFOs will be discussed. Also, the American College of Healthcare Executives (ACHE), conducted a survey in 2015 to identify typical CFO profiles (Nowicki, 2018). Subsequently, the International Journal of Innovation and Research in Educational Sciences published an article that identified healthcare CFO professional development attributes. This paper aims to identify the characteristics, traits, and responsibilities of CFOs and their fiduciary duties in healthcare organizations.
Characteristics and Traits of the CFO
There are some CFOs that oversee the day-to-day administrative operations of healthcare organizations. They plan and supervise all medical services that include monitoring budgets and updating health records. Nowicki (2018) believes there are six skills that CFOs must have: 1) the ability to communicate clearly, 2) provide day-to-day leadership, 3) manage resources and finances, 4) build coalitions, 5) create a positive organizational culture, and 6) maintain strong physician relationships.
ACHE Survey of Typical CFO Profiles
The American College of Healthcare Executive (ACHE) conducted a survey that showed CFO compensation trends of middle managers from 2005 to 2015. There were seven CFO job titles that showed a progression of increased salaries. In 2015, the director/manager of managed care’s largest salary was $134,000 followed by the director/manager of finance at $127,600 (Nowiski, 2018). Today, the nationwide average CFO hospital annual salary is $152,106 (Zip recruiter, 2020).
CFO Professional Development Attributes
The International Journal of Innovation and Research in Educational Sciences published an article titled “Identifying Healthcare CFO Professional Development Attributes” written by Rochester, Wilson, Berkshire, & Houlihan (2017). The article identifies the concern of uncontrolled healthcare expenditures in the United States. The authors also identified fourteen important attributes for CFO development and success. The top five attributes respectively ranked: “1) ability to translate financial information into meaningful action, 2) effective communicator, 3) high integrity, 4) ability to translate financial and performance metrics into useful measures for operations people, and 5) ability to execute…” (p. 617). The article focused on the importance of financial leaders having a professional development portfolio.
Conclusion
This paper aimed to identify the characteristics, traits, and responsibilities of CFOs and their fiduciary duties in healthcare organizations. Research and literature reviews were conducted for the past five years. Research showed that the healthcare industry would be the most prominent industry by 2026, employing more than one-third of all jobs in the country with the projected growth rate exceeding every other sector (BLS, 2016). The characteristics, traits, and responsibilities of CFOs play an essential role in helping the United States reduce healthcare costs by improving the CFO professional development portfolio.
References
Bureau of Labor and Statistics. (2016). Industry employment and output projections to 2024.
Hospital Chief Financial Officer Salary. (2020). https://www.ziprecruiter.com/Salaries/Hospital-Chief-Financial-Officer-Salary.
Nowicki, M. (2018). Introduction to the financial management of healthcare organizations
(7th ed.). Chicago, IL: Health Administration Press.
Rochester, C., Wilson, A., Berkshire, S., & Houlihan, R. (2017). Identifying healthcare CFO professional development attributes.
