As CFO, Broadway has to balance patient care with business sustainability. It's a difficult balance to achieve.
At a glance
- Joined St Vincent’s Hospital in Melbourne as CFO in February 2017.
- Formerly the CFO at Austin Health and before that held CFO roles at the Victorian WorkCover Authority and other health services, including North Western Healthcare Network.
- CFO’s team: about 30 in finance, plus about 50 in the engineering, procurement and telecommunications departments.
- Annual turnover: A$780 million.
My role in public health - more than just numbers
Establishing a culture of accountability is crucial for any CFO, but it’s even more important in public health when public monies are involved.
In hospitals you are working with clinicians, who didn’t go to university for umpteen years to worry about meeting budgets. It’s such an emotive industry, so there has to be a balance between health and financial outcomes.
Of course, you must be across the financial numbers, while managing the operational and financial KPIs. However, I don’t get besotted by the numbers as a lot of CFOs do. It’s more important to know the key drivers in your operations and, if you get that right, the numbers will work out.
I also see my job as taking on a stewardship governance role and ensuring good project management to avoid disasters for the business. Mentoring others is also important.
I’m proud that over time there have been seven colleagues who have worked with me who have gone on to become CFOs.
CPA Australia Resource:
Mentoring – Access CPA Australia’s mentor/mentee program
Game changers – skin in the game
One of my first roles was working for a business that exported cattle skins. As the sole accountant, it really made me self-reliant and set up my future. Then I worked for major explosives company ICI, now known as Orica, which gave me multinational experience before I made the pivotal move into the health sector.
That’s been my biggest career break as health was a greenfield industry (from a finance perspective), and even doing the basics was seen as innovative.
You can probably earn more money in other sectors, but in the past five years, while doing recruitment interviews, it has become apparent that social conscience is a big motivator when people are applying for jobs. Post-GFC, a lot of people have been bruised in the corporate world, so health is attracting a large number of good people.
Other game changers for me have included a role at the Victorian WorkCover Authority, where I worked with a brilliant strategist. It showed me that you really have to change the nature of what you do depending on the CEO.
I also worked for Austin Health for more than a decade, again with a great CEO, and it was such a powerful learning experience. It sounds corny, but when I went into health there was lots of talk about the public good, but you soon realise it is an important element.
My challenges – sustainability is the key
For some years, I didn’t think public health could be sustainable given the way it is being run in most hospitals. It faces the twin-tower effect – at one end of the scale there is a never-ending increase in patient activity, and at the other is a declining economy and annual budget cuts. That’s not a great business model.
However, St Vincent’s Hospital is giving public health a chance. Our CEO, Angela Nolan, has been outstanding, and what we are doing is pretty incredible. We’re implementing a lot of business improvement strategies, and we’ve adopted the Toyota-like lean model, which has allowed us to achieve our financial and operational KPIs.
In recent years the hospital has got patient length of stay down by about a day, from about 7.5 days to 6.5 days on average. That may not sound like a lot, but it means that we’ve probably treated 1300 more patients with the same bed capacity.
Business improvement is crucial in every industry. After the GFC, many industries shifted their plants to Asia to achieve greater efficiencies, but we couldn’t do that with hospitals, so we were left with the problem of delivering high-quality patient care more efficiently. To do so, in the finance team you still need the analysts who love the detail, but you need them to work with the business partners to achieve real transformation and success.
St Vincent’s has recently been named in the world’s top 100 hospitals list (by Newsweek magazine), which brings a sense of pride to the organisation and is a vindication of what we are doing.
Lessons learned and best advice
1. Get the numbers right
As a CFO, if the numbers don’t add up, you don’t have a career.
2. Surround yourself with superstars
Consider putting teams together like you would a sporting team. First, you need some superstars. You may lose them eventually because they’ll be in demand, but they’ll make you look good in the meantime.
You also need some solid team players who have occasional flashes of flair, and then add a number of foot soldiers who provide a foundation for the team and whose skills can be progressively developed.
3. Do your due diligence on your prospective CEO
Good luck to any CFO who has an ordinary chief executive. It’s such a critical partnership. You don’t have to be the same as the CEO, but it helps if your approach complements that of the CEO.
4. Ensure finance partners with the business team
The old police dictator type role of the finance team no longer works. You need to work with the business team and mutually develop strategy.
Loretta Seamer FCPA, CFO of Sidra Medicine, combines a passion for healthcare and finance