This is the first of a two-part series of blog posts explaining and supporting the acute care executive role of Chief Nursing Finance Officer (CNFO). Danielle Miller, Chief Nursing Officer, Clinical Applications at Inform recently proposed this new nurse executive role. Most US hospitals already have a Vice President for Nursing or a Chief Nursing Officer as part of their administrative leadership. In this post, I discuss reasons why hospitals would benefit from adding CNFOs to the executive team.
Healthcare administration and financing are rapidly changing across the US. These changes significantly impact the operations and income of hospitals. The move from volume-based (fee-for-service) to value-based (capitation and bundled payments) financing is pushing hospitals to tie quality care to reimbursement to a greater extent than ever before. Nurses make up the largest portion of the hospital acute care workforce, and are vital to the success of value-based hospital initiatives. However, nurses and nursing departments may not be prepared to address these changes and challenges. A CNFO’s role links finance and value-based initiatives to nurse staffing, scheduling and productivity. The CNFO also provides a link between nursing and advances in IT and healthcare technologies such as telemedicine and robotics.
CNFOs are in a position to understand the importance of nurse retention and nurse satisfaction, in this current time of complex care requirements and an impending nursing shortage. CNFOs would serve as advisers for negotiating and determining wage and benefit increases, and develop strategies for motivating and supporting the nursing workforce. CNFOs can justify workplace improvements, for example, lift teams for hospital nurses, citing the financial savings (such as a reduction in worker’s compensation) as well as the nonmonetary value (such as improved nurse satisfaction) compared to the costs. A CNFO can develop incentives to reduce nurse absenteeism and its impact on cost and quality of care.
A CNFO would ensure that the hospital captures valuable reimbursement related to nursing care. For example, nursing care is closely related to patient satisfaction. Improving HCAHPS scores by improving patient care enhances a hospital’s profitability. Another example is patient flow. Nurses are crucial for implementing timely admissions and discharges, and for transitioning patients to and from settings such as the Emergency Department and the Operating Room. A CNFO can oversee the financial implications of operations such as patient satisfaction and patient flow, and help resolve problems in nursing care that lead to financial losses.
A CNFO enables the hospital to make sense out of data related to nursing care and finance. The electronic health record (EHR) generates abundant data, but these numbers need to be translated into meaningful information. A CNFO is positioned to link the data on nurse staffing and productivity to the nursing unit budget and finances. The CNFO can also provide useful information to help develop and evaluate strategies to resolve problems such as patient falls or infection rates that impair quality and a hospital’s bottom line.
An important role for CNFOs is educating and mentoring nurses in the concepts and complexities of hospital finance. Staff nurses, and even nurse managers don’t always have as much as an introductory level of finance concepts in their educational programs. This is particularly true for nurses who graduated from nursing school a generation ago. A CNFO can help bridge these gaps in the nurses’ financial knowledge. Hospitals need top leadership who can ensure that all nurses in the hospital, whether they are staff, managers or directors, understand the relationship between quality and profitability. A CNFO can reach out to staff nurses to help them understand the impact of wasting supplies on the nursing unit budget. A CNFO can keep nurses up-to-date on new financing strategies such as bundled payments that link nursing care to reimbursement.
A CNFO position is not intended to duplicate or replace the hospital’s Vice President for Nursing or the Chief Nursing Officer. The challenges hospitals currently face in providing ever-better quality care with ever-changing reimbursement systems require teamwork, leadership and new ideas. A nurse executive with the most up-to-date skill set that includes lean protocols, strategic planning approaches for IT and new technologies, and the ability to leverage opportunities in nurse productivity is also required.
I believe there are sound reasons to recommend that hospitals think about implementing CNFOs. In the next post, I’ll share ideas for enhancing and supporting the CNFO role.
Susan J. Penner, RN, MN, MPA, DrPH, CNL
Author, Economics and Financial Management for Nurses and Nurse Leaders, Third Edition, 2016, and adjunct faculty at the University of San Francisco School of Nursing and Health Professions.