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Academy 360 | Health-Equity-Alliance

Session Breakdown | Chief Finance Officer Circle Forum

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Regional health systems might look different on the surface, but they are grappling with the same fundamental challenges facing health systems everywhere. At THMA’s recent Chief Finance Officer Circle Forum, finance leaders from regional health systems across the country gathered to compare notes on how they’re navigating today’s pressures—and some creative ways they’re responding. Here’s what stood out:

1. Medicaid Reform and Financial Sustainability

The forum opened under the shadow of newly proposed Medicaid reforms released just a day earlier. For many CFOs, their payer mix includes 65–85% Medicaid. Thus, the potential freeze on provider taxes (which many states use to access federal funds) poses an “existential” threat.

To protect margins, CFOs shared four key strategies::

  • Operational Efficiency: Reducing length of stay, optimizing observation ratios

  • Service Line Management: Cutting loss leaders, making targeted investments

  • Post-Acute Solutions: Exploring bed-holding and behavioral health options

  • Revenue Diversification: Growing specialty pharmacy, imaging, and ambulatory services

2. Independence Relies on Smart Partnerships

Historically, regional systems equated independence with mission integrity. But that view is shifting. As one leader put it, “If we don’t survive, there’s a population of patients no one else is going to take care of… to be independent for independence’s sake is not fulfilling our mission.”

Partnerships—especially those aligned in values and operations—are enabling systems to remain viable without full integration.

  • Joint Ventures: With surgeons and outpatient providers

  • Selective Outsourcing: Revenue cycle, IT, and clinical specialties

  • Administrative Services Orgs (ASOs): Shared services without consolidation

  • Co-sourcing Models: Time-bound, flexible partnerships with exit strategies

3. Regional Systems Need Practical Frameworks to Guide Decisions

Without large strategy teams or deep analytics, regional CFOs need practical frameworks to guide decisions. Two stood out:

  • The Build-Buy-Partner model, weighing time, talent, and sustainability

  • A five-part success framework: vision, skills, incentives, resources, and execution

CFOs were encouraged to be selective. “You’re not doing a good job if you’re not killing deals,” one leader noted—emphasizing the need to focus limited resources where they’ll have the most impact.

4. Innovate, Innovate, Innovate

Regional systems are leaning into innovation—implementing practical solutions that deliver measurable results:

  • Behavioral Health & NICU redesigns: One system adopted the EMPATH model—a 20-hour psychiatric crisis unit embedded in the ED, reducing inpatient admissions. Others enabled better clinical oversight and 15% revenue growth by bringing NICU services in-house,

  • Supply Chain & Capacity: Leaders cited joint supply chain purchasing, shared leadership models, and dedicated observation unit gains (4–5%), travel labor reduction, OR backfill planning

  • Tech & Revenue Cycle: Teams are scaling tools like AI-powered ambient listening, automated claims support, and offshore coding for complex workflows

  • Strategic Scale: Joint operating agreements enable collaboration without consolidation

Conclusion: the role of a CFO is evolving

CFOs in regional health systems have become true jacks of all trades—balancing financial stewardship with operational leadership, strategic planning, and risk management, often without the resources or support found in larger organizations. These leaders guide service line strategy, oversee IT and supply chains, and educate boards. They build governance structures through multi-disciplinary committees, cross-functional planning, and performance monitoring. With so many priorities, it’s also imperative that they set guardrails to prevent overextension.