How to Become a Hospital CFO

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A hospital chief financial officer (CFO) oversees all financial operations of the institution. The hospital CFO position encompasses a wide range of potential responsibilities, from preparing statements and budgets to formulating strategies for boosting revenue. Regular communication with the hospital CEO and other executive positions, as well as the board of directors, is also integral to this role.

A hospital CFO discussing with her staff.

There are multiple viable paths toward becoming a hospital CFO. The bare minimum requirement for most job openings is a bachelor’s degree in a relevant field such as finance, accounting or business. Many hospital CFO position listings also seek a candidate who is a Certified Public Accountant (CPA). A master’s degree in accounting, or a Master of Business Administration (MBA) credential with specialized focus on healthcare, may also be helpful for career advancement.

What does a hospital CFO do?

The hospital CFO position is broadly similar to that of other C-level executives, in that it combines aspects of personnel management, budgetary oversight and strategic planning related to issues like supply chain and revenue management. A hospital CFO is essentially the head of a healthcare finance department and may work for a children’s hospital, acute care hospital, psychiatric facility or other healthcare organization.

In this capacity, a CFO may perform responsibilities including but not limited to:

  • Developing and administering all capital and operating expenditure budgets, tax statements, reimbursement documents, disbursement activities and any other financial reports on behalf of the healthcare organization.
  • Managing the entire revenue cycle of the hospital, including the implementation of strategies for increasing cash flow, optimizing billing and claims management platforms, ensuring correct coding, and integrating key documentation and systems.
  • Communicating with internal and external stakeholders, ranging from others in executive positions (like chief medical officers or senior vice presidents) to the hospital’s vendors and business partners.
  • Reporting to the CEO and board of directors on current and expected financial performance of the hospital, with the goal of creating or adjusting any relevant plans to make sure that the hospital can deliver high-quality patient care while remaining financially solvent.
  • Overseeing the hiring and training of staff within the accounting and finance departments. May also designate specific teams and their members for special projects or tasks.

Hospital CFOs acquire the skills necessary for their work through a combination of specialized degree programs and years of experience working in healthcare environments. Not all degrees will provide equal levels of preparation for becoming a hospital CFO, so it is important to scrutinize the curricula and career outcomes of undergraduate and graduate programs before pursuing this career.

What is the best degree option to become a hospital CFO?

To perform the responsibilities expected of them, hospital CFOs need deep financial acumen, which they can develop by earning a degree in accounting, finance or another related field like business administration. A master’s degree or MBA is not typically required. However, it may be strongly preferred, or serve as one way to fulfill an expertise requirement – for instance, a candidate might need either a master’s degree/MBA or be a CPA.

Accordingly, the degrees and credential sequence for becoming a hospital CFO will usually go as follows:

  1. Earn a bachelor’s degree in a relevant field like accounting or finance.
  2. Complete a master’s degree or MBA.
  3. Become a CPA.
  4. Gain experience in other healthcare finance positions.

A hospital CFO talks to a board of directors

While the master’s/MBA component is not technically required, a degree can help on the road to becoming a CPA. Such education is a credential that many employers look for as a sign of experience and demonstrated expertise within healthcare environments.

The online healthcare MBA (HCMBA) from the George Washington University (GW) provides a balanced combination of a traditional MBA curriculum in accounting and finance, alongside healthcare-specific instruction. The GW HCMBA also includes a wide selection of graduate certificate options available in areas such as issues and trends in healthcare systems, regulatory affairs and medicines development.

How much do hospital CFOs make?

As an executive position, the hospital CFO role will usually have relatively high compensation compared both to other positions in hospital systems and occupations in the U.S. in general. The U.S. Bureau of Labor Statistics (BLS) maintains two categories into which hospital CFOs could theoretically fit – top executives and health and services managers.

Top executives earned median annual pay of more than $104,000 in 2019, according to the BLS. There were approximately 2.6 million such jobs at that time and the expected job growth rate from 2018 to 2028 was 6%, or about as fast as the average for all occupations.

The more specialized grouping of health and service managers had slightly lower 2019 median earnings, at just a shade over $100,000. However, their expected growth rate was much higher than that for top executives, at 18% from 2018 to 2028.

Overall, the growing utilization of healthcare services in the U.S., along with the ongoing aging of the population, should continue to fuel demand for hospital CFOs capable of promoting sustainable financial performance that supports the reliable delivery of patient care. By earning your master’s degree through the GW HCMBA online program, you can emerge well-prepared to compete for this important position and others. Learn more by visiting the main program page, where you can download a copy of our brochure with additional information.

Recommended Readings:
7 Careers in Healthcare That Leverage Strategic Leadership
A Look at MBA Healthcare Management Jobs

Sources:

Springer Publishing Company | Career of the Week in Healthcare Management: Chief Financial Officer
Bureau of Labor Statistics | Top Executives
Bureau of Labor Statistics | Medical and Health Services Managers