Historically, the relationship between chief financial officers (CFOs) and chief medical officers (CMOs) has not always been one filled with cohesiveness. In healthcare specifically, with a shifting reimbursement era upon us, the responsibilities of hospital CFOs are undoubtedly changing—and with that comes more pressure to better integrate financial leaders with senior physician leaders.
Carson Dye, senior partner at the Oak Brook, Ill.-based executive search firm Witt/Kieffer, has a message for finance leaders (also known as the “bean counters” by some) and physician executives (the “creatives” by some) in healthcare: “Play nice.” Dye conducts senior-level executive search assignments for CEOs, COOs, CFOs, physician leaders and other management team executives in healthcare organizations, and has noticed some marked similarities in the qualities found in good CFOs and physician leaders. Both roles are very precise, approach problems by testing assumptions and propose solutions based on logic. According to Dye, “Although conventional wisdom suggests that physicians and finance professionals have very little in common, I believe that CFOs and CMOs can become the closest working partners around the senior leadership table.” In a recent interview with HCI, Dye dug deeper into the relationship between financial and physician leaders in hospitals and health systems, and talks about how the commonalities in the two roles could potentially lead to a better healthcare. Below are excerpts from that interview.
How did you become interested in analyzing the relationship between financial leaders and physician leaders?
Most of the work I do falls around physician leadership. One of things that struck me a few years ago was the foundation of clinical integration, which is the overall macro move that the industry is rolling towards. And by this I mean not just pay-for-performance or pay-for-value, but something that is more encompassing, and it touches patient quality, safety, and what’s now called the patient excellence movement. To me, it seemed that physician leaders and finance leaders could be intersected. And my experience, which includes working for 21 years in four hospitals and health systems, has taught me that oftentimes physician leaders and finance leaders sit at opposite ends of table with the perception that they don’t have much in common.
But you think they do have more in common than people think?
First off, let’s make it clear that for the contemporary world that we are in today, clinical and finance leaders must be on the same page as clinical integration moves forward. It’s a marriage between the financial metrics and the quality outcome metrics, and the two have to mesh together. So I started to think about the people that compromise the roles of physician and financial leaders, and I concluded that the foundational attributes, values, and beliefs of both roles are actually very parallel. They are both very quantitative, metrics-driven individuals. You don’t go to the doctor and not have your temperature taken, or your blood pressure and pulse checked. Physicians operate on measures, and objective measures are used to treat you over time. And it’s the same in the finance world. As I continued to patch this idea in my brain, I built upon that foundational commonality. In fact, I would argue that at the senior leadership table, these two groups of leaders have more in common than any other two groups.
How is the relationship between the two sides today?
Over the years, as more and more physicians became employed by hospitals and health systems, oftentimes financial leaders would be concerned that the employed physicians were losing money for them, when in fact, other financial reasons might have been the cause of that. Since I started talking about this, I’ve had finance leaders say to me, “You know I never really thought about that. It is so true.” I even have had a few say to me that based on this thinking, they’ve reached out to physician leaders and worked closer together in terms of clinical integration. I think the relationship is improving; they have to be together in sync as we go into a tumultuous period of change. We are literally turning the financial reimbursement upside down.
In terms of any potential rifts between the two sides, how they now being solved?
Financial leaders are increasingly reaching out to physician leaders and trying to better understand their needs and communicate less “finance-like.” For instance, the phrase, “it’s not in the budget” can make any smile turn into a frown very quickly. I have seen a willingness to interact and engage physician leaders in discussion, whether it has to do with budget or planning different approaches of how the organization will set up a patient-centered medical home, for example, which is physician-driven but needs financial analysis as well to run effectively.
We’re also seeing physician leaders realizing that they are lacking in financial skills and knowledge. Many are rolling in Master’s degree courses, or other programs, to help enlarge their understanding. For instance, for years, most doctors’ offices operated on cash-basis accounting rather than an accrual basis. The inability to understand the differences between those two caused the physician leaders to misunderstand the finance leaders on things such as the budget and lack of profitability. “We need better understanding of finance”—physician leaders are saying that now. This is different than 20 years ago, when physician leaders ignored finance people and then complained about it.