Before joining Cleveland Clinic in her current role in 2022, Rochester was CFO, Penn Medicine Lancaster (Pa.) General Health System, an integrated regional health system. She began her five-year tenure at Penn Medicine as senior vice president, Finance, and CFO, Chester County Hospital, a full-service acute care facility with ambulatory sites. Previously, she was the regional finance executive and CFO of Bon Secours Hampton Roads Health System in southeastern Virginia.
She earned her doctorate in health administration from Central Michigan University, an MBA from Florida Atlantic University and her undergraduate degree in accounting from Howard University. She is also a fellow of the Healthcare Financial Management Association.
Q: Not all healthcare CEOs have financial backgrounds. What are the most important financial principles that CEOs should know?
A: It is essential that healthcare CEOs have a deep understanding of a broad range of topics, from the quality of clinical care to the competitive environment, and how those factors impact financial sustainability. Efficiently balancing revenue generation and cost management are key objectives in effective financial management. Having the right balance of investments in short-term improvements counterweighted with longer-term strategic imperatives are also important, as are liquidity and debt management. Every decision has financial ramifications, especially in today’s environment where health systems are working to rebuild margins following the pandemic and the subsequent labor crisis.
Q: What are the greatest financial challenges facing healthcare CEOs, and how can they equip themselves to tackle them?
A: The pandemic exacerbated the decade-old issue of increasing margin compression, and expense inflation is accelerating much more rapidly than the ability to increase revenue through patient activity or reimbursement. The changing dynamics of the workforce, including shortages in key skill areas and high rates of burnout, have compounded the issue. Tackling these challenges requires out-of-the-box thinking and a willingness to embrace change. Tight cost management, investing in workforce retention and smart growth are all important. Leveraging technology, adopting new care delivery models and rationalizing services are examples of nontraditional approaches to sustainability and viability. Vertical and horizontal strategic alliances, joint ventures and nontraditional partnerships may also be appropriate options.
Q: What should healthcare CEOs consider regarding the impact of today’s financial environment on their organization’s ability to pursue major capital projects?
A: It is important to consider the short- and long-term return on any major investment. With declining cash flow and limited access to debt for some organizations, CEOs must carefully consider how to allocate and leverage available resources. New investments or cash outlays should not jeopardize current stability to achieve long-term future at-risk gains. Stabilizing core operations is the first step toward thinking strategically about investments that will provide adequate return in a reasonable time frame for long-term sustainability. Where appropriate, CEOs may consider how philanthropic gifts can help bridge the funding gap for strategically important capital needs. However, it’s important to remember that the organization will need to fund the ongoing operational commitments that will accompany the philanthropically funded asset.
Q: What advice do you have for CEOs in pursuing success for their organizations?
A: When faced with significant financial challenges, that threaten the long-term viability of an organization, be open to hearing, vetting and implementing new ideas and approaches to address those issues. Be aware of the market and the regulatory and competitive environment. And create a culture that encourages diversity of thought and innovation. Also, trust your team to help navigate the challenges.
Q: How has ACHE helped you advance as a leader, and how can it help other C-suite members advance, especially in terms of financial management?
A: ACHE convenes thought leaders and provides rich opportunities for learning and knowledge-sharing. With a focus on innovation in the evolving healthcare field, ACHE helps leaders look beyond the current reality to prepare for the next generation of healthcare opportunities and challenges.