Five Functions of CFOs in Community Mental Health Orgs

5 Evolving Aspects of the CFO Role in Community Mental Health Organizations

Demand for mental health services has surged in recent years, fueled by broader awareness, reduced stigma, and a variety of stressors, fallout from the COVID pandemic not the least. Despite this demand, access to mental health care remains limited. As CEOs of community mental health organizations work to address shortages of qualified caregivers and an array of changes needed to close the service gap in mental health, they increasingly rely on their CFOs to support the organization’s financial health and ability to innovate. Below, we highlight five important and evolving aspects of the CFO role in community mental health organizations.

#1 – CFOs are steering stronger and more collaborative strategic planning.

CFOs in community mental health organizations are collaborating more closely than ever with their CEOs and departmental leaders to integrate financial and operational planning and align resources with the organization’s broader goals. Collaborative work includes assessing and recommending strategies for revenue diversification via grants, value-based care models, fee-for-service options, and other streams. CFOs naturally oversee budgeting, resource allocation, and financial risk management but do so through the lens of the organization’s mission amid seismic shifts in the behavioral health market. Accurate financial data and forecasts are essential to support sustainability, resource optimization, and program expansion.

#2 – CFOs are playing larger roles in supporting partnerships.

Partnerships are of paramount importance to community mental health organizations. Today, CFOs are guiding and performing more leg work in identifying and cultivating critical partnerships that will enhance the organization’s reach, impact, and overall health. A primary goal is to secure funding via close relationships with government agencies, donors, and private entities while ensuring compliance with reporting requirements. Today’s community mental health CFOs also negotiate collaborative agreements with other nonprofits, complementary healthcare providers, and public-private partners to expand services and maximize community benefit.

#3 – CFOs are applying insights from deeper operational expertise.

Many community mental health organizations now provide broader services than they have historically, including outpatient care, emergency services, rehabilitation, and more. Expansion into related services stems largely from behavioral health market shifts towards integrated service delivery that combines services to provide a continuum of care for patients. Momentum toward these models compels closer relationships between finance and the organization’s service lines. Gone are the days where the CFO and the finance/accounting team can work in a number-crunching silo and expect to effectively support the organization. The CFO and their team best serve the organization by intimately understanding the organization’s operations, patient wants and needs, and the intricacies of clinicians’ daily work. In turn, operational and service-line understanding enhances the CFO's ability to identify risks and opportunities and influence smart decisions.

#4 – CFOs are driving performance management clarity and accountability.

CFOs work with leadership teams to define and calibrate measurable KPIs aligning financial performance with clinical outcomes, such as cost per patient, service utilization rates, program efficiency, and more. They integrate these and other financial and operational metrics into performance dashboards to enable near-real-time visibility into organizational performance. Information transparency equips program managers and functional areas with objective indicators that help them determine where things are going right and where course corrections may be warranted. Ensuring managers understand financial and operational reports and how to use them to make informed decisions also promotes a culture of accountability.

#5 – CFOs are leveraging emerging technology for automation and optimization.

CFOs are increasingly applying technology tools across core financial processes like managing A/R, collections, and reporting, as well as across key operational elements of the community mental health organizations they serve. CFOs use grant management software to track grant funding, monitor compliance, and report outcomes to funders. CFOs support investments in telehealth platforms to expand access to services and maximize reimbursement. CFOs lean into advanced payment processing systems that simplify transactions for patients, reduce claim denials, and improve revenue cycle management. CFOs are also combining financial and clinical data through ERP (Enterprise Resource Planning) or EHR (Electronic Health Record) systems to provide more holistic performance and resource allocation views.

Effective and Evolved CFOs are Vital for Community Mental Health Organizations

Community mental health organizations are pivotal pillars in the rapidly evolving landscape of mental health care. Effective CFOs go far beyond stereotypical perceptions of being numbers-only thinkers and financial gatekeepers. While community mental health CFOs do work to continually monitor and improve their organization's financial health, they also serve as an experienced and objective strategic partner to the CEO by adding to their financial acumen a combination of visionary leadership, emotional intelligence, and deep understanding of clinical compliance and quality.

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