CFOs are displaying a notably positive outlook for the economy and the future of their health systems. That optimism stems from several key factors, including the anticipated impact of the incoming administration, the accelerated adoption of artificial intelligence (AI), and an economy primed for new investment opportunities.
According to a recent Deloitte survey, 72% of CFOs in all industries have a positive outlook for the 2025 economy. In healthcare, that may translate to growth, enhanced operational efficiencies and improved patient care.
Now, healthcare CFOs know that they run a health system first and a business second, so jumping onto the bandwagon of a bullish market requires thought and caution so that financial decisions do not harm patients. To do this, CFOs must be diligent in how they stay informed and navigate the year ahead.
The Real Benefits of AI
CFOs must reimagine business practices as well as operations through AI. With a constant expanding and shifting AI market, CFOs must invest in AI that will help their organization thrive in its specified goals.
Healthcare staff should only be doing tasks that only they can do. By tasking staff with these types of duties, providers can win back time and operational efficiency, lending a hand to a refined financial outlook.
With the rise of agentic AI, CFOs can explore the deeper benefits that AI can bring, like improving access to information, performing complex tasks, and delivering actionable insights, all with minimal human intervention.
A Good Risky Time
Sixty-seven percent of CFOs surveyed by Deloitte say now is a good time to be taking greater risks. This percentage, stemming from CFOs across different industries, shows an even more complete picture for healthcare CFOs to examine.
After so much unpredictability around the election, many CFOs and CEOs are relieved it’s settled. They now have a much better idea of what to expect and prepare for with the incoming administration.
With this mindset in play, will 2025 be the year of M&A deals?
Dealmaking can allow provider organizations to reach their full potential through an influx of capital and resources, and CFOs and CEOs are focused on a few key initiatives here, such as expanding access and improving technology.
This mindset may be partially due to lower interest rates and the perception that the new administration might be more lenient on antitrust enforcement.
Keeping A Cash Balance
Despite all the talk around investment, risk, and M&A, many CFOs are looking to improve their cash balance. Although the positive economic outlook under the new administration is taking shape, the fact is, we’re not there yet.
Keeping a well-funded cash balance and reserve fund will still be crucial for CFOs
And they will still need to walk the tightrope of making savvy investment decisions to drive their organization forward, while maintaining a strong safety-net, coupled with a recipe for a smooth patient experience.
There is a rise of imposter syndrome across upcoming finance leaders as they approach new roles, and they need the tools to reinforce the skills to combat it. Imposter syndrome and feelings of self-doubt can hinder executive leadership and lead to an unconfident staff. Upcoming finance leaders can explore a few strategies to deal with imposter syndrome including mentorship and focusing on a growth mindset.
Check out this infographic for the top tips on combating imposter syndrome as a finance leader.
Hospital CFOs must stay vigilant about price transparency rules to avoid financial penalties.
Since Congress enacted the Hospital Price Transparency rule in 2021, the Centers for Medicare & Medicaid Services (CMS) has issued fines to 17 hospitals, some nearing $1 million.
Most recently, Jackson Memorial Hospital was fined $871,122 in July 2024, Baytown (Texas) Medical Center was fined $50,711 in December 2022, and West Chase Houston Hospital was fined $44,251 in December 2024.
These hefty fines to providers for failing to comply with federal price transparency rules underscore the increasing scrutiny on provider pricing practices. The penalties are part of a broader push by the federal government to ensure that healthcare prices are accessible and understandable for patients.
But these fines are not just a matter of regulatory compliance; they represent a growing concern for hospital CFOs and finance teams across the country. If they continue, these penalties can have significant financial and reputational consequences for health systems.
The Price Transparency Mandates
The price transparency laws require hospitals to publicly display their standard charges for all services. This includes prices for both insured and self-pay patients, and for the first time, hospitals must publish machine-readable files containing a comprehensive list of prices for items and services. Additionally, hospitals are expected to provide clear, consumer-friendly information that allows patients to estimate the cost of care before receiving services. The goal is to empower consumers to make more informed decisions and stimulate competition within the healthcare market.
But compliance has been sluggish, forcing CMS to ramp up enforcement over the past few years, issuing fines for hospitals that fail to comply or provide incomplete, inaccessible, or unintelligible pricing information. The most recent penalties reflect CMS’ commitment to holding healthcare systems accountable for transparency and pushing the industry toward greater accountability.
Some experts argued that, given the complex nature of healthcare billing, it’s too difficult for hospitals to list accurate pricing online. There was some push-back in the industry at the onset, but health systems are becoming more adept at meeting the rules.
While the task of updating price information does not fall to the CFO specifically, a massive fine could wreak havoc on a hospital’s finances. CFOs should ensure their organization can avoid this whenever possible.
The Financial Impact
For CFOs, the fines represent more than just a regulatory headache. The financial repercussions are real, with penalties escalating based on the size of the health system and the nature of the violations. Hospitals are required to pay fines for every day they remain out of compliance, making it crucial for finance teams to stay on top of these regulations. Even more, non-compliance with price transparency laws can damage one’s reputation. As more patients and insurers demand pricing clarity, failing to meet transparency rules could lead to a loss of business, lower patient satisfaction, and potential legal challenges.
The financial penalties could also indirectly impact other areas of hospital operations. Resources that might otherwise be allocated to improving patient care or operational efficiency could now be diverted toward compliance measures or paying fines. Additionally, the reputational damage could affect negotiations with insurers and suppliers, potentially reducing reimbursement rates or increasing operational costs.
The CFO To-Do List: Navigating Compliance
To avoid the fines and reputational damage associated with price transparency violations, CFOs should take several proactive steps to ensure compliance with CMS rules:
Review and Update Pricing Information Regularly: CFOs must ensure that their health system’s pricing data is current, accurate, and easily accessible. Regular audits of pricing files and consumer-facing tools should be conducted to ensure they meet CMS requirements.
Invest in Technology Solutions: Many health systems are investing in software and platforms that help manage and display price data efficiently. These tools can help ensure that pricing information is updated in real-time and is presented in a user-friendly format. CMS also has provided hospitals with resources to help them comply, such as an online validator tool and a template for creating machine-readable files.
Develop a Dedicated Compliance Team: Maintaining transparency is not a one-time effort but an ongoing process. CFOs should consider establishing a team dedicated to compliance, ensuring that all relevant departments (finance, IT, marketing, and legal) are aligned with the transparency goals.
Train Staff on Legal and Operational Requirements: It’s essential that the finance team, as well as other departments, understand the nuances of the price transparency regulations. A little training here will help prevent inadvertent violations that could lead to costly fines.
Communicate with Stakeholders: Open communication with patients, insurers, and other stakeholders about price transparency efforts can foster goodwill and mitigate any negative publicity.
Looking to upgrade your IT system? See how this CFO braved the pricey transition.
Switching IT systems is a hefty task, and not one that CFOs are usually ready to take on. But for health systems struggling with operations, especially in revenue cycle, a new system might be exactly the transformation needed to thrive.
UMass Memorial Health CFO Sergio Melgar spoke with HealthLeaders about how his organization made the switch. UMass has achieved Epic's Gold Star Level 10 recognition for its use of the platform. (See how transitioning to Epic helped take UMass Memorial Health from working in disconnected silos with struggling operations, to fluent organizational synergy, and improved margins.)
Implementing an IT system switch is a huge financial (and stressful) undertaking, and CFOs looking to make this change must understand the steps for sufficient preparation. Here’s a breakdown of Melgar’s advice when he was in the trenches of the transformation, including crafting the right mindset, and the key tactics that cannot be overlooked.
Waking Up To the Change
The first step to implementing change is realizing when one needs to happen. If your health system is struggling with poor operational metrics and working in silos, (even effectively), it’s likely time for a change.
To help lead that change with other C-suite execs, CFOs will need to have a clear, long-term, strategic mindset. Melgar says to think about the big picture items. If training will cost a certain amount, that’s that, he says. CFOs can’t think the process will lead to a complete transformation in a year or two. Instead, Melgar urges CFOs to think about everything in the long term. CFOs also must have the resources, and can’t think ‘we’ll just be financially strained this year.’
“That means where's the liquidity coming from?” Melgar says. “So your balance sheet has to be prepared for it.”
Be Prepared for Staff Challenges
Taking an entire organization from one IT system to another is also challenging on a staff level. Melgar says to be prepared for staff challenges with training, but also general change.
“They're leaving their old job and they're going to a new one,” he says. “That is a little bit emotional for some folks because it's not what they know.”
Melgar says UMass changed a lot of its IT organizational structure, making a few employee changes, but also brought in more experienced staff that had done this transition before.
Be prepared for the cost here,
“You do need to put a lot of money into the training,” Melgar says
The “Continuous Improvement Philosophy”
Another key element to pulling off a successful long-term transition, Melgar says, is logging into the “continuous improvement philosophy.” This pairs strategic, long-term thinking with searching for improvement every step of the way. CFOs may find improvements in places they didn’t expect.
One example Melgar gave was how UMass’ corporate costs were a percentage of the total cost of the transition. While not all corporate structures are the same, Melgar says its corporate structure over the 11 years that he’s been at the organization, has transitioned from most of the services that were previously local.
“So we haven't decentralized,” he says. “We've actually centralized more so conceptually. We are effectively doing more centrally. While that has been happening, our cost of the overhead compared to the cost of the total has dropped.”
Be Patient
The long-term game is filled with speed bumps and barriers, and CFOs must be patient in waiting for financial results. Melgar says CFOs may find themselves breaking through unexpected barriers in this time:
“You'll need to sort of break through more, call it personal barriers, than necessarily the system barriers,” he says.
Melgar said the system itself no longer was the barrier, but barriers arose from the “the human element that is in there and will always be there,” more so than the system.
Melgar says to also be prepared to brave the “valley of despair” in the first year with Epic as it goes live — it will likely be a rough year. With less-than-exciting margins and uneasiness as the organization jumps into the new system with real patients and claims, CFOs will need to practice patience as they wait for the investment to pay off.
The CFO Guide
Melgar emphasized the role his management system played in the transition, saying, “I think our management system is certainly probably the driving force, but without Epic, I think we would not have made the progress that we've made.”
“So perhaps it's been a catalyst,” he says. “I would say that our management system certainly is the key because we were creating ideas and transforming long before Epic. But once Epic went in, it was really the catalyst that I think propelled us to do more and more.”
Three final tips from Melgar and his experience with the transition:
Transform
“You need to invest in transformation because you don't want to put Epic on the practices that you currently have. You want to transform what you do.”
Keep it simple
Getting too complicated, Melgar says “is a common mistake, because if you do, if you think you can do it better and you customize it, you customize it again. The upgrades become more challenging, just plain and simple”
Modernize
“You have to modernize.” Don't think you're going to put Epic on an old computer, Melgar says. “If you stay current, you're going to ride this to success.”
Here's what CFOs should prep their budgets for in 2025.
The healthcare finance outlook is stabilizing, for now, but some of the same 2024 challenges will roll over into 2025. Here are three items CFOs can focus on to ensure their organization's finances are set straight for 2025.
As new CFOs step into their roles, how can they forge a leadership mindset?
Shifting into a new role can be intimidating, especially if it’s an executive role .. Healthcare CFOs must be adaptable, analytical, and equipped to make decisions that affect millions.
One thing we learned at the HealthLeaders UpNext CFO Exchange is that many future healthcare finance leaders grapple with imposter syndrome. Healthcare finance is a high-stakes field, so it’s not uncommon for leaders to feel overwhelmed by the complexity of their roles.
Feeling confident in one’s skillset and leadership is easier said than done. For those stepping into leadership roles, overcoming this psychological barrier is essential not only for personal growth but also for the health of the organization.
How Imposter Syndrome Impairs
The responsibility to make high-stakes decisions for both the financial health of the organization and the care of patients can feel overwhelming, especially when new execs are surrounded by seasoned professionals with years of experience.
If an executive leader isn’t confident in their ability to solve a challenge, their team is going to be unsure as well. In order to lead and have the vote of confidence from staff, executives must focus their mindset on believing in themselves and their skillset.
The Rise Of Imposter Syndrome in Healthcare Finance
Several factors contribute to imposter syndrome among emerging healthcare finance leaders. One key factor is the steep learning curve in the industry. Healthcare finance is multifaceted, blending traditional financial management with an intricate understanding of healthcare policies, reimbursement systems, regulatory frameworks, and patient care economics. For leaders new to these dynamics, it's easy to feel like they are constantly catching up.
More than that, the healthcare sector is marked by rapid change, driven by technology, policy shifts, and evolving patient expectations, which can leave finance leaders feeling uncertain and vulnerable.
Overcoming Feelings of Imposter Syndrome
Many leaders, even those with decades of experience, grapple with self-doubt. Acknowledging these feelings can be liberating, allowing new leaders to see that they are not alone in their struggles. Building a supportive network of peers, mentors, and colleagues can help normalize these feelings and provide reassurance.
Seeking out mentors—whether senior leaders within the organization or professionals from outside networks—can provide invaluable perspectives and insights. Regularly engaging in professional development opportunities, such as attending healthcare finance conferences and webinars or earning certifications, can also build confidence by deepening expertise and staying current on industry trends.
Emerging leaders need to focus on developing a leadership mindset rather than merely having the technical expertise. They will need to think of ways to build trust across their teams while being transparent, and keep in mind that there is always more to learn.
Building resilience is the second piece to creating a solid leadership mindset. Fostering a culture of collaboration and being open to feedback from both financial peers and clinical teams can also help new leaders gain confidence and demonstrate their ability to lead effectively.
With twice the responsibility, see how this finance VP makes it work.
Elena Barberis, CPA, has accepted the role of Vice President of Finance for both Trinity Health Holy Cross Health in Fort Lauderdale, Florida and St. Mary’s Health Care System in Athens, Georgia.
Over the past 18 years, Barberis has served in leadership positions in healthcare systems in the Miami and Atlanta metro areas. She spent 11 years at the Jackson Health System in South Florida, rising to the position of vice president of finance.
It Takes A Village
Being the VP of finance for two different health systems is no small task.
First, organization is vital, she says. From differing payer mixes to population metrics, to operations, being extremely organized is something Barberis knew well long before her dual role. Now it’s helping her keep both health systems in check.
“My whole career, I think, and my whole life, has been developing the strategies to get organized and to be equipped to handle this role,” she said.
Secondly, it takes the support of a good team. With several levels of finance support teams at her side, Barberis said: “It's one of those things that really gives you that village and the support you need to be able to handle everything.”
On top of this, consistently monitoring the economy and regulatory policies is also a significant part of the job, she says.
Barberis said one of the strategies that has helped her throughout her career is determined and resourceful collaboration. She recalled a time early in her career where she had been brought into a health system as part of the financial turnaround team. When she found herself unable to get the information she needed, she used her communication skills and collaborated with the colleagues she needed to get the work done.
“Basically I just went around and used all my communication skills and tapped into meeting people,” she said.
Too often in healthcare, and especially in healthcare finance, executives find themselves making decisions in isolation. With so many financial pressures coming from all around, it’s no shock when CFOs want to phase out the noise and simply get the job done. But isolated decision making isn’t practical and can often lead to uninformed outcomes that can affect just about every aspect of a health system.
But Barberis has found a collaborative system that works at her organization, where finance isn’t a scary, off-limits topic to non-finance staff.
“One of the things that I think has been a benefit for me, is that I've been able to reach across the aisle to colleagues and to folks that are usually not comfortable speaking about numbers,” she said. “It's very helpful to be able to do that when you can.”
For a VP of finance, the most crucial collaboration, especially when dealing with multiple health systems, is the collaboration with the CFO. Barberis manages her two health systems along with CFO Michael Gusho, who regionally manages four locations for the health system.
Barberis emphasized how her CFO helped her as she settled into the new roles and she knew her success was on his radar from the beginning.
“It's been a wealth of knowledge for me to learn from him,” she said.
Looking Ahead
Looking down the path of the rest of 2025, Barberis says she's keeping a close eye on regulatory changes and reimbursement models.
“Trinity, as well as many other health systems, has been very vocal about negotiating with payers and getting a fair negotiation, and a fair rate with increasing dynamics in the market,” she said.
While insurers are raking in hefty profits, health systems are still struggling.
“Margins are getting thinner and thinner for hospitals as costs continue to rise. Prices continue to rise on drug costs,” she said. “Things are not getting any cheaper, especially with inflation.”
The healthcare industry's data dilemma is costing health systems millions.
Healthcare has a data problem. And it's getting expensive.
Data is more than just a byproduct of medical care—it's the backbone of decision-making. But oftentimes that data is unclear or undefined.
Studies show that data errors in hospitals can occur at a rate from 2.3% to as high as 26.9%. A variety of factors contribute to data challenges such as data entry errors, outdated information, lack of data standardization, and system integration issues.
How much is inaccurate data costing providers?
Despite having access to vast amounts of information, many health systems struggle to use data effectively, and this inefficiency is costing them. Studies show that medical data errors can cost providers up to $20 million a year.
Without real-time data, a hospital may struggle to adjust staffing levels or optimize resource allocation during times of high patient volume. Inefficiencies like this can lead to prolonged patient stays, increased overtime pay, and the risk of misdiagnosis leading to poor clinical outcomes—all of which drain financial resources. One survey showed that up to 20% of patients may not be correctly matched to their records.
Data consistency also plays into the challenge. If each clinician involved in a patient's care journey is working from a different dataset, that will spell trouble for the clinical outcome.
Bradley Hipp is the newly appointed CFO and Vice President of TMC Health, and has years of healthcare finance experience under his belt. He says it's crucial for health systems to have data consistency, yet that is often a problem in health systems.
He says health systems must ensure that “data is being reported the same way, data is being seen the same way, and wherever you are within the health system, it's done the exact same way.”
Data sharing and integrity
A secondary piece to the data challenge for providers is data sharing practices, especially with payers. Incorrect claims submissions, due to data entry mistakes or system glitches, are not only costly in terms of denied payments, but also in the form of reputational damage with insurers and patients alike. CFOs will need to stay on top of payers and ensure that both sides have consistent, accurate data, particularly when it comes to contract negotiations.
New technology has done much to address the healthcare data problem. It enables efficient data collection, storage, analysis, and integration through tools like electronic health records (EHRs), clinical decision support systems, and artificial intelligence (AI).
Despite this, many health systems don't make the best use of technology for data challenges. To stay ahead, CFOs can collaborate with CTOs to ensure their health system has the right technology in place to refine their data practices and determine where data inefficiencies are rooted within the system.
Data analytics
Valuable data can be rendered obsolete if it is not accompanied by the right analytics. By harnessing tools like predictive analytics, CFOs can optimize resource allocation, from staffing levels to inventory management.
UW Health CFO Bob Flannery spoke with HealthLeaders about the importance of data analytics and how it is used at his organization.
"We've built a data mart that elevates expectations at the senior leadership level not to make decisions in a vacuum," he said.
Flannery emphasized the importance of transparency in resource allocation as CFO and how data analytics allows him to do that and clearly show his team where resources are needed.
"And then even sharing that, when we do actually allocate some additional resources, what went into the thought process, what went into the recognition that that really was a high impact area for people that we serve," Flannery said.
The CFO to-do list
To stay on top of the data dilemma, CFOs must invest in robust data infrastructure, including data management platforms and analytics tools. Building cross-departmental collaborations between finance, IT, and clinical teams is essential for creating a data-driven culture.
To take it a step farther, CFOs should advocate for data governance policies that prioritize data accuracy, integrity, and transparency. Collaborating with payers to streamline data exchange processes can reduce reimbursement delays and prevent costly billing errors.
By ensuring the right data is available at the right time, maintaining data integrity, fostering transparency with payers, and leveraging analytics, CFOs can steer their organizations toward an efficient, financially stable future. The cost of neglecting these data challenges is simply too high to ignore.
See how this CFO helped lead the transition at his organization.
UMass Memorial Health integrated Epic in 2017, now the system has received gold star status from the company. The switch ultimately improved operational efficiency as well as staff synergy.
"The clinical system was not integrated across the entire system, so we effectively had to work in silos because we couldn't really move information across," said UMass Memorial Health CFO Sergio Melgar.
I spoke with Melgar to uncover what into such a massive, expensive transition to a new system including communication with staff about training and talking through the transition with stakeholders.
CFOs can note the impact a new system can have, but must also acknowledge the long term journey towards improvement.
I broke down Melgar’s best advice to other CFOs who may be looking to upgrade their system to achieve those long-term financial and operational goals.
From AI to reimbursement, CFOs have a lot to think about for 2025.
After a rough year, financial stability is well underway for healthcare. But that doesn’t mean CFOs can relax.
A report from Moody’s Investor Services clocked in the median operating cash flow margin as nearing 7%, but noted that growth is also slowing down. With so many financial factors (and big talk surrounding each one), coming at CFOs in 2025, it can be hard to know where to focus their attention, and budgets.
Here’s a breakdown of the top trends we’re seeing for healthcare finance as 2025 commences so CFOs can know what’s coming, and more importantly, prepare their organizations.
Workforce woes
Labor costs and inflation hit 2024 hard, and unfortunately 2025 may have a similar outlook. The Moody’s report noted that workforce expense growth will continue to slow but will remain above pre-pandemic levels. Staff retention will be key, but cutting contract labor to cut costs is a trend that may continue. CFOs will need to focus on retaining employees, who are increasingly demanding higher pay, and managing expenses.
Primping the portfolio
With the median operating cash flow margin improvement and expected revenue growth, according to the report, the industry may see more systems with newfound wiggle room to make strategic investments. Higher performing health systems may find themselves making more business investments in areas like outpatient services and AI updates.
The performance gap
Nonprofit hospitals may still struggle in 2025. Around 60% of nonprofit hospitals next year are expected to have a 6%-plus margin, up from 40% in 2023. But, this is still better than pre-pandemic levels of around 78%. A recent Kaufman Hall report put things in perspective: While the outlook is stable, there's a discrepancy between the highest and lowest performing hospitals, a trend that’s set to grow even more throughout 2025.
Commercial cash
Moody's report detailed an expectation of higher reimbursements from commercial insurers next year, possibly moving up to the mid-single-digit percent range. The reimbursement increase, combined with the adoption of state-directed pay programs, will push revenue growth to hit 7% in 2025.
More cyber threats, bigger cyber budgets
Cybersecurity threats have obviously grown, and the budgets have followed suit and will continue to do so. Healthcare consistently ranks as the industry with the highest average cost per data breach. Cybersecurity is expected to reach 7% of the total technology budget in 2025, up from 5% in 2019, according to the report.
Intentional influence
With a new administration poised to take control, many are saying the next four years could be a whirlwind for healthcare. While some have expressed concern over the potential appointment of RFK Jr. as HHS secretary, (his vaccination stance is certainly a widespread concern), others have speculated that his influence will lead to a greater wellness focus. This could be good for the industry, as it could lead to more preventative health programs, and a focus on value-based care and risk sharing models. However, health systems may need to play a bigger role in managing wellness information than in previous years. With a widespread wellness movement, (which has already begun ─ thank you, TikTok), there comes a wealth of wellness misinformation to combat.
MMA: Mixed Medicare Advantage predictions
Some say it's time to pull back on MA, as it's been turbulent for years, but others see a comeback for the program. The industry knows that Dr. Mehmet Oz, Trump’s pick to lead CMS, loves MA, and should he be appointed to lead the agency, we’ll have to wait and see what his plans will be.
Dr. Sachin Jain, CEO of SCAN Health Plan, touched on this in his recent Forbes article:
“I expect that they will ease up the regulatory environment surrounding Medicare Advantage and make it an even more attractive alternative to traditional Medicare (which bizarrely still lacks dental, vision, and audiology coverage) that is often standard in Medicare Advantage plans) over the next 4 years.”
More mergers, anyone?
2024 brought some notable mergers, but many deals fell apart after apprehension about the deals being blocked by the FTC or DOJ. While some mergers broke down in the spotlight, only a fraction of healthcare mergers get challenged by the FTC. However, experts have speculated that the new administration will likely encourage more big transactions and big-name mergers.
AI all day
The AI gas pedal will be to the floor in 2025. Health systems that aren’t on top of the AI game may fall behind in efficiency and operations, and incur greater costs over time. At the same time, there are still many questions about the technology, and an over-reliance on AI or investments in bad technology with little ROI could seriously cripple an organization. With more AI tools hitting the market this coming year, potentially cheaper AI prices, and more competition, CFOs will need to be on top of their game to manage the AI hype and steer the right course.
What CFOs will focus on
CFOs will need to focus on a few key strategies to stay ahead of the game, including:
- retaining employees and managing expenses
- investing in partnerships with revenue cycle and care management companies to help drive down costs
-bolstering a reserve fund for unexpected incidents like data breaches.
