Considering the high cost of healthcare today, it’s safe to assume most chief financial officers are hungry for meaningful data surrounding health and productivity. But you’d be mistaken were you to think CFOs were just interested in claims data.
At this week’s IBI/NBCH Health and Productivity Conference at the Fairmont San Francisco, Integrated Benefits Institute President Thomas Parry unveiled the findings of his group’s “Making Health the CFO’s Business” study, which looked at CFOs’ perspectives on the role of health on financial performance.
As might be expected, researchers found that most CFOs, especially those one out of every three executives the researchers identified as “health and productivity leaders,” consider health an organizational imperative, with roughly two-thirds of the 313 respondents viewing health as a “cultural or financial” priority in their respective organizations. But the study also revealed several intriguing data points surrounding the kinds of metrics CFOs’ value most.
According to the findings of the study, which was produced with the help of CFO magazine, most CFOs believe health can have an impact on financial performance in both conventional ways (healthcare expenses and sick-day absences) and less conventional ways (opportunity costs and staffing requirements). “It’s not just about healthcare cost, but all of the other dimensions as well,” Parry said.
In light of this finding, he adds, benefit professionals might want to rethink the kinds of information they’re generating and sharing with their CFOs.
“If you need to make a case to your CFO as to why you need to make an investment, and the only thing you have to build your case on is healthcare costs, you’re going to have a much harder path than your counterpart in another organization who can talk about sick days, absences, turnover and opportunities lost,” says Parry.
Interestingly, the study found CFOs put a fair amount of weight on self-reported metrics, such as employee-satisfaction surveys and workforce health risks. “The idea that self-reporting information is useless flies in the face of what we found,” Parry said.
CFOs also said they find information from their own organizations (such as claims costs, employee surveys and program results) to be more credible than external sources of information, modeled estimates and recommendations from suppliers and consultants.
At the end of its report, IBI offers benefit professionals a handful of lessons learned. But one of the more memorable ones is the need to better understand the mind-set and goals of the CFO before you begin to have a conversation. It just might get you to rethink the kinds of metrics you decide to bring along with you.