How to Become a Financial Manager in Healthcare
August 6, 2020 | Category: Healthcare Administration
Healthcare organizations face an array of fiscal challenges. With rising costs and often slim profit margins, they rely on expert financial management. By helping healthcare organizations develop strong financial plans that wisely handle money and risks, financial managers play a key role in enabling hospitals, doctors’ offices, and clinics to deliver high-quality care to patients.
Financial managers in healthcare work in dynamic environments. In addition to navigating shifting payment models and complex coding systems for billing, these professionals have to adapt to changing laws and regulations. To meet the demands of healthcare financial management, they must broadly understand the industry and possess in-depth knowledge of routine financial operations.
Those interested in how to become a financial manager in healthcare should consider the educational path that can help them achieve their professional goals. AdventHealth University Online’s Master of Healthcare Administration in Strategy and Innovation is designed to help students develop the expertise needed to succeed in healthcare financial management.
What Does a Financial Manager in Healthcare Do?
Financial managers help ensure a healthcare organization’s financial well-being. This responsibility involves drafting financial reports, making decisions about investments, and planning for the organization’s long-term financial success.
The regular duties and routine financial operations handled by financial managers in healthcare include:
- Facilitating contract negotiations
- Supervising financial reporting and budgeting
- Ensuring a healthcare organization’s finances meet legal requirements
- Analyzing financial reports and market trends to find ways to lower costs and increase profits
- Consulting with top executives about financial decisions
Financial managers also play a significant role in the broader context of a healthcare system. Using their understanding of finance and the healthcare industry, they provide guidance on expanding financial opportunities. This could involve measuring the costs and benefits of investments and then making recommendations. For example, financial managers working for a hospital or healthcare system offer instrumental advice about purchasing medical practices, ranging from physicians’ offices and rehabilitation centers to laboratory services. Such purchases pool money and resources, generate revenue for the organization, and facilitate greater bargaining power with health insurance companies.
Financial managers also provide important leadership for managing resources to promote innovative solutions and care. For example, they provide financial guidance regarding medical equipment upgrades and investments in emerging technologies such as data analytics. Such technology promises valuable insights into vast amounts of clinical data regarding care and treatment regimens.
Financial managers working for large managed-care organizations, such as HMOs, may help direct funds toward medical research. Research that seeks out the best screening methods for detecting cancer or the most cost-effective methods for treating heart disease ultimately achieves an important goal of financial management: affordably providing the highest-quality healthcare.
Necessary Skills, Education, and Training
Learning how to become a financial manager in healthcare requires understanding the skills, knowledge, and education needed. Financial managers must first have a strong foundation in the fundamentals of healthcare financial management. Those include the factors driving healthcare costs and the changes to how healthcare providers get paid. Financial managers must also know how to measure the financial performance of their healthcare organizations, as well as reduce costs. Finally, financial managers must appropriately gauge where and when to invest money, what to outsource, and which prices to set for different healthcare services.
Analysis plays a significant role in financial management. Understanding financial data, evaluating investment opportunities, and determining how to keep operations as efficient as possible while maintaining the highest levels of care require exceptional analytical skills. Financial leaders in healthcare must also communicate well to explain complex financial information and participate in decision-making.
An advanced degree such as a Master of Healthcare Administration allows aspiring financial managers to cultivate the skills and knowledge needed to succeed in their desired role. This kind of program covers important topics, including healthcare finance, strategic leadership, marketing and planning, and healthcare governance. It prepares professionals to take on leadership roles in finance management in healthcare by teaching them about payment methods and policies, determining product costs, handling revenue cycles, and managing working capital. The curriculum also addresses operating and capital budgets, financial analysis, and third-party payer systems.
A Master of Healthcare Administration provides a solid foundation in essential financial issues and concepts, paired with a deep understanding of the healthcare industry. Additionally, graduates with several years of experience in financial management in healthcare can seek professional certifications. The Healthcare Financial Management Association (HFMA), for example, offers certifications in areas such as business intelligence and financial reporting.
Job Outlook and Salary
The growing need for healthcare professionals who can expertly direct investments and coordinate strategic financial plans in a constantly shifting environment translates into a promising job market for financial managers. The U.S. Bureau of Labor Statistics (BLS) projects the number of positions for financial managers to grow by 16% between 2018 and 2028.
Financial managers can also expect competitive salaries. The median annual pay for these professionals was $129,890 in May 2019, according to the BLS. Furthermore, earners in the top 10% make upward of $208,000 a year.
Launch a Career as a Financial Manager in Healthcare
Exploring the right educational path, such as an advanced degree in healthcare administration, serves as an important step for those wanting to know how to become a financial manager in healthcare. Discover how AdventHealth University Online’s Master of Healthcare Administration in Strategy and Innovation prepares financial managers to thrive in the healthcare industry.