This interview is taken from an episode of the Spend Culture Stories podcast. In this episode, Perry Wiggins, the CFO of APQC discusses the changing face of the healthcare industry and the new role and challenges of the CFO. Perry also shares his insights on adopting an unrestricted Spend Culture built on trust and accountability.
About the Podcast:
Your company culture might attract talent, but your Spend Culture will make or break your company.
Spend Culture Stories is a female-hosted and produced podcast that helps finance leaders learn the tactics, strategies, and processes to build a proactive Spend Culture.
Learn how to pick the right tools, implement the most efficient processes, and how to develop the right people to transform the Spend Culture of your organization for the better.
The New Role and Challenges of the Healthcare CFO
Former Healthcare CFO. Dad. Chartered Professional Accountant.
Perry Wiggins is the current CFO of APQC, a non-profit benchmarking organization.
Prior to APQC, Perry led senior finance roles in healthcare for over 10 years as CFO for organizations such as Nova Recovery Center, Altus Health, and Mentis Neural Rehabilitation. Before entering the world of finance leadership, Perry was a former auditor at Deloitte.
Perry is a Chartered Professional Accountant and got his MBA at Xavier University.
In this episode, Perry discusses the changing face of the healthcare industry and the new role and challenges of the CFO. Perry also shares his insights on adopting an unrestricted Spend Culture built on trust and accountability.
Speakers: Perry Wiggins, CFO at APQC
Listen to the Episode Now:
What changes are you seeing in the healthcare industry that is impacting the finance function?
Balancing Pricing and Quality of Care for Patients
The industry is going through some volatile changes as providers and physicians and payers and patients attempt to figure out the balance between pricing and quality outcomes. So with all those headwinds in the industry right now, it can be quite chaotic for not only the people who are front facing patients like our doctors and nurses and such, but even on the backend side with support services like healthcare finance.
Bridging the Gap Between Multiple Departments Through Relationship Building
From my experience in healthcare, there are always times there’s tension between operations and finance given that in most healthcare settings the profit margins are just so low.
With that being said though, as a CFO, I never wanted our medical professionals and clinicians to shortchange care in the aim of lowering costs and improving margins. That is only a recipe for disaster. That’s a positive in the short run, but the long term, the consequences are quite costly. The key for me was always developing good relationships with doctors and nurses and other direct care providers and other people in operations, so that the lines of communication were always open, so that a foundation of trust could be established. This case, whether I am the CFO, or someone who’s currently in that type of position when you go to them to focus on operations and ways that the medical professionals can improve, they know that you’re coming from an angle full of what’s best for the company.
From a former healthcare executive’s point of view, what are some of the biggest mistakes that are being made in health care when organizations are trying to cultivate a healthy Spend Culture?
Centralized Accounts Payable and Purchasing Structure Could Be Too Restrictive
Well in healthcare and from my experience, many organizations that are large in nature, they have multiple locations in the city or throughout the state, or throughout the country. The challenge becomes trying to have a centralized AP and purchasing culture or system in place to address the concerns of the organization. Many times that works because if you think about healthcare, all the type of purchases and expenditures that at a healthcare organization requires and purchases, most of these purchase are pretty standard and you can have a centralized purchasing arm to do all that for you. But in many cases, each facility each location has its own unique needs, and sometimes the rigidity of having centralized purchasing operations can limit some of the operations of individual locations and companies throughout the corporate arm.
Historically speaking, healthcare has been slower to adopt new I.T. and tech solutions. As someone who’s worked in that industry, why do you think this is the case?
Demand on Cash Reserves from Replacing Equipment
Simply put, the demand on cash reserves. You have to remember that in the healthcare industry, there are significant outlays to capital expenditures. Healthcare facilities are constantly replacing and upgrading medical devices and equipment.
On top of that, you’re doing routine renovations to patient rooms and lobbies and so forth, and you can see how easy it becomes to keep existing software for patient records and purchasing, as it’s just a cheaper option versus undergoing a new implementation of a software system.
Horror Stories of Failed Implementations of Technology
Additionally, if you know anyone in healthcare who has survived a major software implementation, they speak of their bad experiences if they have some form of PTSD – you can start a group therapy meeting of all the health care professionals that have been scarred by their software instrumentation projects gone wrong. I think because of that, dynamic healthcare organizations tend to be slow to implement their software systems because of all the horror stories when it goes wrong.
You have cultivated a unique Spend Culture at APQC, can you tell us a little bit more about it?
Unrestricted Spend Culture: Balancing Autonomy and Responsibility
Based on the Spend Culture Quiz results that I took and being a fan of the podcast, APQC is characterized as an Unrestricted organization, which means our directors have greater autonomy in their areas and greater accountability for their budgets.
With the exception of unique and high dollar expenditures, our leaders and their respective managers are given great freedom to incur costs for their respective areas. Now of course, with those freedoms comes some responsibilities.
Tracking Performance and Accountability
Each leader is fully aware that I or the CEO is watching their performance during the month, and what in the month financials are published.
They are fully aware they must give a full accounting of their decisions and their results in our monthly leadership meetings, and they are fully aware that they can be vetoed even though we give them the autonomy and the freedom in the day.
As CFO and CEO, there are times we have to step in and say ‘no’. But for us and the size of our small non-profit organization, we do about 20 million dollars in revenue and have 70+ employees, so the Unrestricted culture works best for us. I think for the listeners, the biggest thing I can point out to you is that you have to do what works best for your Spend Culture.
Listen & Subscribe to the Podcast On:
The Book of Spend Culture: How To Master Rapid Growth Without Running Out of Cash
Learn the secrets behind the success and failures of Amazon, Snap, Fab and Wework, and how improving their Spend Culture has brought them closer to meeting their goals.Read The Book