Healthcare Financial Management

Healthcare is predicted to be one of the fastest growing industries in the United States over the next ten years, and the development will affect more than careers in medicine. Accounting and finance professionals who focus their attention on healthcare have the opportunity to specialize in the evolving industry. The Big 5 accounting firms and their affiliated consulting groups all have significant healthcare divisions, not to mention the many smaller firms who have their own healthcare departments or focus their entire business on healthcare financial management.

There is room to grow in this industry, especially as practices and policies continue to change. So where does a healthcare financial management professional begin their career?

"Usually, they are hired by an accounting or consulting firm out of school," says Richard L. Clarke, FHFMA, President and CEO of the Healthcare Financial Management Association (HFMA). "Then [they] get assigned to a healthcare client and build expertise in that manner."

The HFMA is a 33,000-member organization dedicated to serving financial professionals who work in the healthcare industry. According to Clarke, someone with financial expertise in the industry may work for any number of organizations, but there are three main groups that employ members of the HFMA.

"About 65% of our members work for provider organizations, about 5% work for payer organizations (HMOs) and about 25% work for accounting and consulting firms," says Clarke. "The remaining 5% work in a variety of organizations."

Employers in the healthcare industry are looking for a wide variety of professionals, but according to Clarke there is a more pressing need within the field for certain types of expertise.

"Individuals knowledgeable about the revenue cycle-including registration, charge master, billing and A/R collection-are in high demand by provider and consulting organizations," says Clarke. "Financial analysts and cost accountants are somewhat in demand and, as always, IT and financial operations expertise is needed."

Though Clarke adds that general accountants are not in high demand, he says about 22% of HFMA members are CPAs. Approximately 7% of HFMA members carry the organization's industry-specific certifications, CHFP (Certified Healthcare Financial Professional) and FHFMA (Fellow of the Healthcare Financial Management Association).

Accounting and finance professionals in the healthcare industry have had to deal with major changes over the past few years, and will continue to evolve as the industry advances.

"The Balanced Budget Act contained provisions that significantly reduced the amount of payment increases, and in some cases actual payment reductions, to almost every healthcare provider including hospitals, home health organizations, physicians and managed care organizations," explains Clarke.

"In addition, contracts with managed care organizations have restricted revenue growth. Thus, profitability has suffered causing accounting and finance professionals to help their organizations identify and manage cost savings activities."

The need for financial management experts in the healthcare industry will continue to grow as more regulations and new programs change the way finances are handled within the field.

"I think the future looks good for individuals who can provide value-added services in financial analysis, especially related to expertise in revenue cycle and IT issues," says Clarke. "The healthcare industry is growing so opportunities still exist."

Special thanks to HFMA President Richard L. Clarke, FHFMA, for his time and contributions to this article. To find out more about the professional opportunities in healthcare financial management, be sure to visit the Healthcare Financial Management Association's web site or call 1-800-252-HFMA.