Accounting in the Healthcare Sector
The financial management of a hospital and healthcare business is a more complex task than you may find elsewhere.
From funding and research grants to making decisions that may have a literal life-or-death impact, the financial juggle is one that needs to be tackled strategically, holistically and empathetically.
In the latest instalment of our Distinctive Business blog series, Natalie McDonald, Chief Financial Officer of Melbourne-based Austin Health, shares the traits she believes are essential for accountants to succeed in the world of healthcare.
1. A commercial outlook
“Traditionally, accountants in the health system would be more traditional, purely financial accountants, but to succeed in healthcare today you need to be more of a commercial accountant. You need to look holistically at the business. You need to understand the flow, the journey of the patient and not just the numbers in the back room.”
2. A desire to be a full part of the business
“The health sector accountant of the future can’t be someone sat in an ivory tower. They’ve got to be embedded in the business; part of the day-to-day. And so communications, stakeholder management, those types of things are really important.
“To make financial decisions that are as informed as possible you need to really understand what happens in the hospital to fully to ascertain what’s important. I was talking to some colleagues who work in radiation therapy about the how the process works for patients. They raised an issue that patients can have four touchpoints in the hospital, and none of the four are very well linked. So where do you invest time and money? Mapping and improving the patient journey, or buying a new machine? What’s going to have the best outcome for the business, and our patients?”
3. Ability to think laterally
“When I worked in Sydney we had a situation in one of the hospitals where nursing was managed by each ward. We discovered they were spending a lot of time managing staff vacancy. Every nurse manager on the ward with doing that, so you can imagine the amount of time that went into that. We were always having to use agency staff because we weren’t managing sick leave. So we worked with them to bring in a more centralised system and created a permanent pool of staff they could draw from and then recruit from. So a lot of the external recruitment is done by one team, and the amount of value that relationship has brought the organisation is pretty amazing.”
4. Tackling a complex funding environment
“To say hospital funding is complex is an understatement. I’ve never seen anything like it in a commercial sense! You have so many masters, and even with capital we have to be able to justify the funding stream it’s coming from. Each funding stream will have a different process to access that capital, so you’ve got to get your head around quite a lot of government protocol.”
5. Ability to juggle multiple teams
“I’m a bit of a different CFO in that I manage the finance team, which includes all the revenue and financial management. I’ve also got a business intelligence unit who do a lot of our performance reporting, and also the health information management team who do our medical records and the coding regarding activity payment. The health information management team actually have to rate each one of the medical records and work out what the severity of the episode is, and that becomes a code. I also manage the radiology and imaging function in the hospital too. It’s great, I have clinical and commercial responsibilities, and having that overview helps me make more informed decisions, and ultimately deliver better financial outcomes.”
6. A commitment to improving the end result
“Of course, what we all want is to provide a better experience for the people using our hospital and continually improving health outcomes, while operating a strong business. It’s a fine balance, and to strike it we need a commitment to invest in the right things. Recently we were talking about a new cancer drug. Instead of being hooked up to a drip and needing to sit in hospital for hours, this drug is just injected under the skin, and you’re in and out. Now, this drug is more expensive, but it’s a better experience for the patient, and it frees up space in the hospital too. You have to look beyond the one number.”
Natalie’s top tips to succeed in health finance
- You must get out and learn the business. Every aspect is intrinsically linked.
- Be humble. Those soft skills are vital.
- Think laterally and holistically.
- Don’t be afraid to spend on the right thing.
More About Natalie
Natalie McDonald is the Chief Financial Officer at Austin Health, Heidelberg, Victoria. An experienced financial professional, Natalie spent almost 15 years at BHP before moving into the health sector in 2012. She has been with Austin Health since November 2017, and takes a whole-of-business approach to her role of CFO.
Connect with Natalie