There’s no doubt about it—the role of chief financial officer in senior living has changed. Gone are the days when a CFO could get away with only understanding financial topics, according to industry professionals who attended a recent workshop.
Now in its 18th year, the Ziegler LeadingAge CFO workshop has reached a conversation turning point among CFOs, says Lisa McCracken, senior vice president of senior living research and development at specialty investment bank Ziegler.
“Today’s CFO in senior living really needs to be adept and sophisticated at a number of different levels,” McCracken tells Senior Housing News. “Our business has become more complex. There’s an understanding among finance professionals in senior living that they need to understand more—home-based services, health care reform, etc., because all of those things are impacting their organizations.”
Probing for Policy Positions
Today’s CFOs are more engaged in discussions that reflect their changing—and expanding—roles in senior living. Executives need to know more than the traditional financial topics, such as changing consumer patterns and joint ventures. In today’s health care environment, CFOs are getting into home- and community-based services, for-profit sector tools, cyber security, technology and the growing importance of human resources.
Another important shift among CFOs is the need to keep up with changing policies. With the 2016 presidential election looming in the coming months, it’s unlikely that major policy changes will happen in the next year, leaving providers and financial executives to deal with changes already long expected.
“We don’t expect much to come out of Washington, D.C. for the rest of the year,” Director of Residential Communities at LeadingAge Steve Maag tells SHN. Maag presented on senior living policy updates at this year’s workshop, which was held in April.
Of course, there are major changes already underway across the health care space—from bundled payment pilot projects to value-based purchasing shifts. Instead of looking to new policy change announcements through legislation, maintaining a place in the current environment is what’s at the forefront of CFOs’ minds at the moment.
“With that kind of policy direction from CMS, you have to understand where you are in the marketplace and where you need to maintain your relationship in the acute care space,” Maag says.
Turning to Turnover Rates
In addition to policy updates, CFOs are more focused on improving margins on the human resources side than ever before. While high employee turnover rates have plagued the industry for a while, the cost of bringing on new employees has sparked the interest of financial executives. More CFOs are now looking into these figures, and increasing investments in training and hiring processes to reduce turnover, according to Maag.
“The turnover rates are not news, but it’s gotten to the point where people are starting to have to actively manage that,” Maag says. “[The industry] is starting to do cost analysis of turnover—how much it costs to train and bring new employees on. People on the financial side of it are really looking at that as investing in better training and hiring practices are becoming more demanding.”
With eyes wide open on newer challenges that the senior living sector is confronting, CFOs are continually expanding their roles.
“The underlying theme [of the workshop] is us giving financial professionals the tools to not just be in the finance sector, but prepared for the strategic initiatives their organizations are facing,” McCracken says. “Now, it’s more than just money.”
Written by Amy Baxter