Leadership skills help financial managers achieve career success

The increase in for-profit hospitals and consolidations, more stringent regulatory requirements, and declining reimbursement have increased the overall expectations of healthcare executives regarding the performance of their senior financial managers. Most financial managers recognize that educational credentials and experience in the healthcare industry are necessary to advance their careers. They also need technical skills to produce computer-generated financial reports for the healthcare organization.

More than technical expertise, however, today's senior financial managers need to demonstrate leadership skills to effect strategic and behavioral change. Some of the strategies healthcare financial managers can use to polish their leadership skills include distinguishing between leadership and management, employing a new mentoring model, seeing new management methods as more than fads, understanding the connection between technology and leadership, looking for the solution beyond the problem, and participating within the organization.

Distinguish between leadership and management. Although the skills required for leadership and management overlap to some extent, there also are distinctions. As shown in Exhibit 1, page 51, management tends to be task-oriented, whereas good leadership tends to emphasize the motivational aspects of accomplishing tasks and reaching goals. Because their jobs are technical in nature, many healthcare financial managers focus on developing their management skills, leaving the inspirational and consensus-building role that characterizes leadership to others. Demonstrating leadership, however, would help them achieve success for their department and the organization as a whole.

In particular, healthcare financial managers need to adopt a proactive leadership stance rather than react to change after their facilities are negatively affected by it. With the implementation of the ambulatory payment classification (APC) system, for example, healthcare financial managers should take the lead in assessing their coinsurance billing practices and their entire billing systems and processes. Waiting to see what will happen means deferring leadership to those outside the finance department.

Moreover, the Federal government's emphasis on regulatory compliance for the Medicare and Medicaid programs calls for teamwork and harmonious personal relations, particularly in the finance department. Financial managers need to assert leadership by creating a positive atmosphere in which employees feel free to inform management of compliance issues they believe should be addressed.

The ability to inspire loyalty also is more important than ever, due in part to the regulatory climate. Leaders who inspire loyalty can motivate employees to discuss their concerns internally first rather than report them to an outside agency. Employee loyalty has eroded in recent years in many industries, making employee turnover a significant problem in a thriving economy Employees recognize good leadership skills, however, and are more inclined to remain with an employer and maintain a cohesive work team if they respect their manager's leadership abilities.

Legislation continues to affect the payment healthcare organizations receive and operational changes they must implement. Healthcare financial managers realize that implementation of privacy standards mandated by the Health Insurance Portability and Accountability Act, for example, will be costly and operationally challenging. Good management recognizes that change is imperative, but only good leadership can effect change.

Employ a new mentoring model. Because employees tend to change jobs more frequently than they did in the past, less emphasis is being placed on traditional mentoring, whereby a seasoned manager would instruct a junior manager over time. A new approach to selecting a mentor that financial managers should consider adopting emphasizes specific skills acquisition over more generalized experience. To guide their selection of a mentor who will help them enhance their leadership skills under this new model, healthcare financial managers should take the following steps:

Determine their own strengths and weaknesses. Financial managers should identify specific leadership skills they wish to develop. These skills could range from public relations to information technology.

Identify individuals who have skills they want to develop. There may be many individuals in the financial manager's organization who have the desired skills and are willing to share their expertise. The CEO is a likely mentor, but marketers, public relations directors, physicians, and board members also may have a wide range of skills--particularly interpersonal and communications skills--that are important to developing as a leader. Develop relationships. Most people are flattered when others wish to learn from them and respond well to sincere solicitations of advice and expertise. Mentoring sessions can include informal lunchtime discussions; reviews of prepared material, including impact statements regarding various pending changes in payment and outlines for future presentations to industry groups; discussions of personnel issues, such as how to evaluate, motivate, and reward department members; and attendance at presentations by the mentor. It is particularly important to network with peers at HFMA programs and at meetings of other industry groups, where industry leaders are accessible and prepared to share their knowledge.

See new management methods as more than fads. Management methods come and go. New management methods, such as zero-based budgeting, management by objectives, continuous quality improvement, quality circles, and business process reengineering, often amount to mere fads that managers implement without eliciting their true value to the organization. A leader, however, knows how to recognize methods or aspects of methods that support the organization's progress, implement these programs, and discard programs that are not useful. Healthcare financial managers should not have unreasonably high or low expectations of new management methods or discard old methods simply because new ones have come along.

For example, many financial managers bought highlevel software programs to compute the impact of APCs on their facilities. Healthcare financial managers, however, cannot rely solely on software programs to obtain needed information. They also need to assess APC impact by initiating a detailed claims audit and a thorough review of office billing procedures.

Understand the connection between technology and leadership. Although healthcare financial managers do not have to be experts in information systems, telecommunications, or the Internet, they do need to understand the capabilities of these technologies and how the technologies should be applied to their organization. Computers will be handling an increasing amount of the work in healthcare finance, but healthcare financial managers need to know how to use the data that are generated to support the organization's strategic goals.

Look for the solution beyond the problem. Financial managers are trained to ensure that the organization's financial goals are met. This function can appear daunting when resources are limited, and financial managers are used to championing conservative financial positions. Leaders, however, view challenges as opportunities. To emerge as organization leaders, financial managers need to become greater risk takers. For example, several years ago the government proposed new rules on "hospitals within hospitals" (a wing or floor of a hospital licensed as a different hospital, often to secure cost-based payment for long-term patients). Many healthcare executives closed their facilities before the final rules were released. Other financial managers, however, spearheaded efforts to maintain their status. These efforts were rewarded when the new law grandfathered some facilities, allowing them to operate as before.

Participate. Healthcare financial managers cannot lead an organization without actively participating in that organization. Activities that enhance leadership include attending meetings outside the finance department, participating on organizationwide committees, becoming involved in public relations events, sponsoring an achievement award and personally presenting it, attending a hospital-sponsored golf tournament or 10-kilometer run, and cultivating relationships with leaders from other departments or the community at large. Being seen and heard is an important facet of leadership.

Conclusion

Leadership opportunities abound for healthcare financial managers who wish to take advantage of them. By broadening their scope beyond management functions, healthcare financial managers help move their organizations forward while receiving recognition for their work. Developing leadership skills will increase their visibility throughout the organization and in the community, which, in turn, will help them advance in their career.