In Part 1 of this two-part series, I explain why hospitals should add a Chief Nursing Finance Officer (CNFO) to the executive leadership team. This post discusses the implementation of the CNFO role. Some ideas for supporting the CNFO role are also presented.
It is essential to justify the resources allocated to the CNFO position. Comparing the CNFO’s salary (costs) to potential benefits (savings and profitability) from the CNFO role makes a business case for the CNFO, assuming that the savings outweigh the costs. Another way to determine the value of a CNFO position is to learn from other institutions with CNFO or similar executive positions. Hospitals should also engage their Chief Nursing Officers (CNOs) and other nurse executives to help determine additional nursing leadership skill sets that are needed to finance and deliver care in today’s changing healthcare environment. For example, a CNFO could bring expertise in IT and new technologies that would be linked with nursing productivity and care quality.
Implementing the CNFO role requires attention to recruitment. For generations, nurses have had little education, interest or involvement with the “business side” of health care. As a result, applicants with a CNFO skill set were difficult to find. This situation is changing, with more and more nurse managers earning MBAs, the introduction of finance courses in the MSN curriculum, and a growing interest in nurse entrepreneurship.
Hospitals can now draw on a growing pool of qualified applicants for the CNFO position. Some applicants may be former CNOs or nurses with other executive level experience. Other applicants may include nurse managers with strong financial management skills and advanced educational preparation such as an MBA or the Doctor of Nursing Practice (DNP).
The hospital must also ensure that nurse managers, other administrators and staff understand and support the CNFO role. One approach is for the hospital to implement another new nursing role that links quality care to financial management at the bedside, the Clinical Nurse Leader (CNL). The CNL functions both as a staff nurse and as a team leader for implementing quality improvement and cost reduction initiatives. CNLs are prepared to work under the direction of the nurse manager and nurse executive by developing strategies such as the small test of change, using the best clinical evidence and the latest technologies to find ways to solve problems in patient care while reducing waste and excessive costs. The CNL and CNFO roles can support and enhance each other to the overall benefit of the hospital’s patient population and bottom line.
Expanding the educational preparation of staff nurses is a further way to support the CNFO’s role and initiatives. Supporting undergraduate (BSN) and graduate (MSN) education develops the hospital’s workforce and has been shown to improve the quality of nursing care. Many collegiate nursing programs require either a course in healthcare finance or at least some finance content in courses such as healthcare policy. Fostering academic nursing partnerships between collegiate nursing programs and hospitals is one way to increase the educational level of clinical staff. Better educated nurses are better prepared for managing change, and for adopting practices that are not only clinically effective but financially prudent.
My current book and the forthcoming 3rd edition of my book provide information on healthcare economics, budgeting for healthcare settings, and financial skills needed for nurses and nurse leaders. The content in topic areas such as budget monitoring, making a business case, writing a business plan and assessing financial health help nurses at all levels enhance and support the efforts of a CNFO. The skills and concepts I present are also applicable to community-based and other healthcare settings outside the hospital. Nurses who understand finance, from staff to top leadership, are value-added assets in our healthcare system. New roles and new ideas are needed to develop and support these assets.
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.