Written by Bruce Henry, Healthcare Executive Search Practice Leader
Healthcare is a complex industry with many moving parts and stakeholders. The CFO plays an essential role in the success of any health system and can be the difference between success and failure.
Healthcare CFOs are in high demand as the industry continues to grow and change. To meet this demand, organizations are increasingly hiring healthcare CFOs from outside the industry with a background in other sectors.
However, the qualifications that make an excellent financial professional for an industrial company are different than those of a successful healthcare CFO.
In this article, we explore the best practices and advice on how to find the right fit for your organization’s new Chief Financial Officer. In addition, we will offer a look at the pros and cons of internal hiring compared to external hiring and the considerations of hiring someone from outside the healthcare field.
Healthcare and hospital CFOs come from different backgrounds and possess varying levels of experience. When searching for a new candidate, you must consider the type of person you need to fill this role and what they will bring to your organization.
There are two main types of private equity healthcare CFOs:
The pool of internal candidates for healthcare CFOs can be limited. But if you have a candidate who’s been working in your organization for a while and offers the experience and leadership you’re looking for, it may be worth considering them for the role.
The overall process of hiring an internal candidate is similar to what you’d use when hiring any other candidate. The main difference is that you need to interview people in various departments throughout your organization to get a complete picture of what they’re like as leaders.
Characteristics to look for in internal candidates include:
If you’ve hired someone who has worked in your organization for years, they will know how your company operates and how its financials fit into the larger picture of health care industry trends and regulations.
They’ll also understand the types of decisions they will face in their new role, so they won’t feel like they are starting from scratch with each new day on the job.
When you’re considering an internal candidate, you already know that person’s strengths and weaknesses. Hiring internally allows you to see how well a candidate meshes with your team before bringing them on board as your CFO.
If you don’t have anyone who fits the bill internally, you should consider looking outside your organization for a new CFO candidate.
There are several ways to find this person: networking, headhunters and executive search firms, referrals from other companies, or board memberships or associations where you can meet potential candidates face-to-face (or via video chat).
There are two main factors to consider when looking for an external candidate for the CFO role: the first is the skills and experience required for the role, and the second is whether you want a candidate with extensive healthcare industry experience or someone who can bring in skills from another field.
The ideal candidate for this position has experience working in the healthcare industry. Their experience may be from a hospital or other medical facilities such as an emergency room or doctor’s office. It can also include experience as an accountant, bookkeeper, or auditor.
Private equity firms typically look for candidates with several years of experience working in the healthcare field to ensure their new hire has the necessary knowledge base and skills to succeed in their role.
Ultimately, it may be challenging to find a candidate in the healthcare field who meets your expectations for an executive financial position, and working with someone with experience in other fields can be the best decision for your organization.
Healthcare CFOs must be prepared to manage the cost and risk of providing high-quality care while also meeting important regulatory requirements and financial reporting burdens.
Let’s look at the types of experience that make someone an effective private equity healthcare CFO.
The healthcare industry is unique, and so are its financial reporting requirements. A private equity CFO without experience in healthcare financial reporting may have difficulty creating accurate reports that meet all regulatory standards and fit within your budget.
This is especially true if they’ve never worked in the healthcare sector before or if they don’t have any familiarity with your specific industry or company structure.
HIPAA is one of the most important laws governing the health care industry. It regulates everything from patient privacy to data security to how doctors and hospitals must handle medical records.
Having an experienced HIPAA-compliant CFO on staff is essential for organizations with interests in the medical field — especially those that deal with sensitive information like patient names and addresses.
The most essential trait in your private equity CFO is experience managing complex businesses. The healthcare industry is highly regulated, and managing compliance with HIPAA, Stark, and other regulations can be challenging.
The more experience your prospective private equity CFO has managing complex organizations, the better prepared they will be to navigate your organization’s challenges.
Finding a suitable private equity healthcare CFO can be a challenging process. The ideal candidate will have all of the requisite skills to drive companies in various industries while also possessing the specialized financial knowledge and expertise to lead a private equity organization.
We’ve provided a few tips and strategies to help you better understand what your organization’s recruiters should be looking for in a healthcare CFO and how they can find the right candidate for your team.
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