Welcome to Optimum Healthcare IT’s “4 Questions with…” executive interview series, where we interview top thought leaders in the Healthcare IT space. We search for the leaders with track records of service excellence, who are passionate about their work and make patient safety their top priority.
In this installment, we talk with Shantanu Singh, Executive Director and Chief Financial Officer of Taj Pharmaceuticals Ltd., in Mumbai, India.
OHIT: What are 2 (or three) of the biggest financial challenges today’s healthcare organizations face? Then, what can CFO’s do to either prepare for those challenges, or manage them once they’ve occurred?
Shantanu Singh: Healthcare reimbursement is being intentionally reduced by government and commercial payors. Each year provider networks are faced with doing the same work with less revenue. Moreover, the reimbursement model is quickly changing from fees for effort to fees for outcomes. Accordingly, healthcare organizations must have a clear understanding of their costs and how to control them. And in this industry operating costs keep growing — mainly employment and pharmaceuticals — in the face of reduced reimbursement. Complicating the situation is the rapid change from procedure-based reimbursement to a fixed payment for managing population health.
CFOs must show their organization how and where to reduce costs, standardize activities and avoid variation. The new normal in healthcare is lower reimbursement for the same work. Therefore, CFOs must help to lower the cost of the work. That generally involves modernizing technologies along with streamlining work processes. Healthcare organizations must be able to make money in a new “disrupted” value proposition.
OHIT: What are some of the most important skills for a CFO to build?
Shantanu Singh: CFOs need to have a clear understanding of how a business makes money. That includes knowing how to:
- Communicate complicated financial information with simplicity
- Form trust relationships with the governing board, banks/investors and other key stakeholders
- Anticipate and predict the future
- Be an effective change agent, and
- Position the organization to meet strategic goals.
The CFO is generally both the financial coach and head cheerleader — selling the financial story to both internal and external stakeholders.
OHIT: What is your style as a CFO? How do you lead?
Shantanu Singh: My style is to lead by example through an open and collaborative process. I take prudent risks to foster growth, productivity and accountability. I would be the first to implement any new technology or structure that could improve the organization’s performance.
OHIT: What two questions do you think CFOs should be asking themselves to take their organizations forward?
Shantanu Singh: The first important question healthcare CFOs should be asking themselves is how to best position their company for success in a risk-based reimbursement world. Financial flexibility and clear understanding of costs are critical. Second is how best to engage leadership, particularly physicians, in managing through healthcare financial challenges.