Authors: Deanna Banks and Jessica Homann
Summary: With 60% of CFOs at the largest health systems serving for less than 2.5 years, healthcare faces an unprecedented financial leadership crisis that threatens operational stability and strategic execution. Organizations that implement proactive, competency-based succession strategies will gain a decisive competitive advantage while others experience mounting risks, disruptions, and escalating costs.
Reading time: 12-15 minutes
The statistics are jarring. Our analysis of more than 12,000 health system finance leader profiles reveals that 60% of CFOs at health systems with $15 billion or higher in revenue have been in their roles for 2.5 years or less. When we add data from organizations with around $10 billion in revenue, turnover remains significant at 40%. It’s a concerning picture as the healthcare industry faces an unprecedented crisis of CFO transition that traditional approaches and the current talent pipeline are ill-equipped to solve.
These aren’t just numbers on a spreadsheet. They represent a significant breakdown in the continuity of financial leadership across our largest health systems, with only 35% of departing CFOs retiring rather than leaving for other opportunities. This indicates that while baby-boomer generation retirements account for about a third of CFO departures, most leadership changes result from other factors, such as career moves, market opportunities, dissatisfaction, or cultural challenges. This generational shift, combined with the increasing complexity of healthcare finance leadership, signals a systemic disruption that demands new thinking about CFO talent identification, development, succession planning, and leadership transition.
“The demand for CFO talent has intensified in recent years,” observes Jessica Homann, Vice President – Senior Client Partner at Furst Group. “We’re seeing organizations shift from cost-reduction strategies to growth-focused approaches, which has fundamentally changed the requirements needed from financial leadership. This evolution, combined with the reality that many strong CFO candidates have made recent transitions and face competing opportunities, creates significant succession planning challenges.”
For CEOs, this instability creates a cascade of operational risks, including delayed strategic initiatives, disrupted stakeholder relationships, and compromised financial transformation projects that require consistent leadership and oversight. For board members, these statistics signal a fiduciary crisis that demands immediate attention and the implementation of systematic solutions.
The Perfect Storm: Converging Market Forces Disrupt Leadership Pipelines
Drawing on more than 40 years of experience in healthcare executive search and leadership development, our recent engagement data and market intelligence reveal multiple forces behind the growing pressure on CFO talent pipelines and succession programs. As regulatory complexity intensifies and market dynamics shift, these converging pressures have reached a tipping point that traditional finance leadership development did not address.
The Evolution of Healthcare CFO Complexity
The CFO role has undergone a fundamental transformation from traditional accounting oversight to a strategic business partnership. Recent research from the Healthcare Financial Management Association (HFMA) quantifies this evolution: 88% of CFOs expect to spend significantly more time on strategy over the next three years, while 63% anticipate increased focus on revenue cycle transformation and 49% expect greater involvement in workforce management decisions.
“The CFO role has evolved dramatically from the traditional ‘numbers person’ to a true strategic partner,” notes Deanna Banks, Principal – Senior Client Partner at Furst Group. “They are expected to simultaneously lead digital transformation, implement contemporary operational models to improve forecasting and risk exposure, develop and restructure staff, all while managing the traditional financial oversight. It’s a completely different profile than what we were recruiting for even five years ago.”
The skills required to drive transformation extend well beyond standard financial management, requiring strategic leadership capabilities that bridge clinical operations with sophisticated financial modeling.
The mounting complexity helps explain why 90% of healthcare CFOs report their jobs becoming more difficult, according to recent research from HFMA. CFOs face the cumulative strain of workforce shortages, rising operational costs, and expanding responsibilities that now encompass clinical strategy, technology implementation, and consumer engagement– domains traditionally outside the scope of finance leadership.
For CEOs managing complex operational priorities, CFO transitions create immediate disruption to critical initiatives, including ambulatory care expansion, digital transformation projects, and value-based care implementations that require continuous financial leadership to maintain momentum.
This evolution demands leaders who combine MBA-level strategic thinking and a deep understanding of operations with the ability to partner effectively across clinical and administrative functions. The challenge intensifies when considering the industry’s unique regulatory environment. Unlike other sectors, CFOs must master the complexities of Medicare and Medicaid reimbursement, value-based care contracts, uncompensated care obligations, and compliance requirements where any misstep can result in substantial penalties.
Evidence of this complexity appears in current market dynamics. Federal funding reductions are forcing academic medical centers and systems that depend on government programs to rethink their business models. As one health system CEO noted, organizations have been forced to “reset budgets” mid-year as revenue assumptions prove unsustainable.
Market Concentration Intensifies CFO Talent Competition
The concentration of financial scale among the industry’s most prominent players creates unique challenges for succession planning that compound traditional talent shortages. At the top tier, two major health systems command revenues of $115 billion and $71 billion, respectively, followed by several large health systems in the $40 billion range.
Below that level, fewer than 10 health systems report revenues between $21 billion and $31 billion, including major nonprofit systems, faith-based networks, and large investor-backed organizations. This steep concentration means that CFOs capable of managing tens of billions in revenue represent an exceptionally small talent pool, with most health systems competing for leaders with experience managing comparable financial complexity.
The data is unforgiving. When 60% of CFOs at the largest systems have tenure under 2.5 years, the available pool of “been-there-done-that” candidates shrinks further. Organizations are facing the reality of having zero internal candidates capable of succeeding in their current CFO – a scenario playing out across major health systems nationwide.
The CFO Succession Planning Paradox
Succession planning and management are universally recognized as critical for stability, yet implementation remains surprisingly inadequate across the healthcare industry. This paradox of knowing what needs to be done while struggling to implement it effectively reveals deeper systemic issues than simple oversight or resource constraints.
For boards, this represents a governance challenge that exposes them to significant fiduciary risks. Research from the American Hospital Association reveals that 49% of hospital boards lack formal CEO succession plans, with similar, if not worse, gaps likely existing for CFO positions. This creates measurable risk during critical leadership transitions and exposes boards to potential liability for inadequate succession planning.
Traditional Approaches Prove Inadequate for Finance Leadership
The problem extends beyond documentation to outdated assumptions about the availability and development timelines of CFO talent. Many succession plans rely on the assumption that qualified internal candidates will emerge when needed, or that the external market will provide sufficient options. However, our recent search experiences reveal that even when strong external candidates are identified, market dynamics can speed up timelines and create unexpected complications.
“Nearly every board we work with understands how important succession planning is for their CEO, COO, and CFO roles,” explains Bob Clarke, Chairman at Furst Group and NuBrick Partners. “The challenge is that building a systematic approach takes time and focus, and that energy is often pulled toward more immediate operational priorities. When we help them evaluate what they have in place, we often find well-intentioned plans based on outdated market assumptions that leave them inadequately prepared for the future.”
The Finance Expertise Constraint
The traditional requirement for healthcare-specific CFO experience further constrains options precisely when talent markets are tightest. While industry knowledge provides value, requiring it may eliminate candidates with transferable skills who could bring fresh perspectives and capabilities.
Consider the skills and experience that are required for healthcare CFO success:
- Budget and fiscal management
- Analytic reasoning
- Accounting knowledge
- Strategic planning
- Risk and change management
- Communication
- Transformational leadership experience
- Emotional intelligence
- Regulatory expertise
- Digital transformation management
- Scenario planning and crisis management capabilities
These capabilities are not unique to any one setting, but their application within the reimbursement, regulatory, and capital environment of healthcare is. Rather than seeking talent from unrelated industries, health systems can broaden their lens within the healthcare ecosystem, considering leaders who have operated in payers, provider joint ventures, or diversified delivery models, while investing intentionally in development and succession to build future-ready finance talent from within.
A Balanced Approach to CFO Succession
The traditional checklist approach to healthcare CFO qualifications, such as tenure, comparable size and scope, and similar patient volumes, reflects a static view of leadership that no longer aligns with dynamic market realities. Moving from crisis to continuity means rethinking how you define, identify, evaluate, develop, and retain CFO talent.
The Business Reality of Healthcare
Organizations must acknowledge the fundamental truth that healthcare is a business and needs to be run as such, focusing on outcomes without compromising its mission. This recognition doesn’t diminish social responsibility or patient care commitments, access, or quality. Instead, it acknowledges that sustainable mission delivery requires sophisticated financial management that encompasses all objectives.
This perspective creates opportunities for a balanced talent strategy that values both healthcare experience and cross-industry expertise. Consider the complementary strengths available:
Healthcare-experienced CFOs bring a deep understanding of regulatory requirements, reimbursement complexity, clinical operations, and stakeholder dynamics that take years to develop. However, the limited pool of such candidates requires considering exceptional leaders from across all sectors of the industry.
Cross-sector CFO leaders can bring fresh perspectives, analytic rigor, and transformation experience, but true operational alignment matters. While healthcare-adjacent organizations, such as payers, healthcare services companies, and select segments of life sciences, offer relevant exposure to risk management, data analytics, and value-based economics, their financial structures differ significantly from those of hospitals and health systems. The most successful cross-pollination tends to occur within the healthcare continuum – payers to providers, providers to joint ventures, or service organizations into integrated delivery networks – where leaders already understand reimbursement complexity, regulatory compliance, and mission-driven operating constraints.
“Proactively addressing CFO succession challenges will give you a significant competitive advantage,” concludes Deanna Banks, Principal – Senior Client Partner at Furst Group. “Organizations that continue operating with traditional approaches will find themselves increasingly disadvantaged in both talent acquisition and accelerated performance. The industry transformation demands that succession strategies evolve accordingly. Those who act decisively will position themselves for sustained success.”
Expanded CFO Talent Aperture
A strong competency-based CFO profile creates a solid foundation for identifying and developing talent. However, you need concrete strategies to bridge the gap between the current reality and sustainable financial leadership continuity.
The solution isn’t to simply do traditional succession planning better. It’s about adopting an integrated approach that combines expanded talent sourcing, systematic development, and structured transition support for CFO roles.
Systematically expanding your consideration of CFO talent across all healthcare sectors requires developing frameworks for evaluating candidates from relevant industries and identifying transferable competencies specific to financial leadership.
Adjacent sectors that can yield transferable finance leadership talent:
- Healthcare technology and services – CFOs who manage rapid growth, scalability, and private-equity or venture-backed capital structures.
- Life sciences (medical devices, biotech, pharma) – executives versed in innovation, R&D investment, and regulatory complexity.
- Managed care and payer organizations – leaders with deep knowledge of risk-based contracting, revenue models, and healthcare economics.
- Healthcare consulting and advisory services – finance leaders accustomed to cross-industry exposure, analytics, and transformation projects.
Identifying and Evaluating Emerging, High-Potential Candidates
Current and increasing executive talent pipeline gaps mean adjusting the parameters of candidate evaluation beyond traditional pathways to identify rising executive candidates – leaders who demonstrate readiness in acumen and composure but may not have held identical executive roles.
Rising executive candidates often bring essential capabilities, such as resilience, learning agility, curiosity, and digital literacy, while being comfortable with ambiguity and driven by a passion for positive disruption and transformation. In a constrained executive talent market, considering candidates with high potential represents a significant opportunity.
Traditional experience-matching criteria often miss exceptional leaders who possess the core competencies for success. Insights from our research on evolving paradigms for C-level readiness encourage the development of systematic approaches to identify and evaluate step-up candidates to bring fresh perspectives to complex challenges.
The traditional talent pool of CFOs with identical experience remains limited, while competition for these candidates intensifies. When you identify and develop step-up talent, you gain access to a broader, often more innovative candidate pool.
“Hiring organizations need to be open-minded and flexible about talent requirements,” emphasizes Jessica Homann, Vice President – Senior Client Partner at Furst Group. “The professional attributes needed to be a successful CFO in today’s environment aren’t unique to the size and scope of the organization or any single sector. We’re seeing client partners who expand their mindset find exceptional leaders who bring fresh perspectives while delivering results and meaningful impact.”
7 Core Competencies of a Successful Healthcare CFO
While finance experience and sector-specific knowledge are important, the capabilities that drive CFO success extend beyond these requirements. Rather than viewing specific experience as a prerequisite, identify the core competencies that will allow the leader to thrive in your unique situation as well as complex, regulated, mission-driven environments.
Based on our analysis of more than 12,000 finance leader profiles across the health system ecosystem, successful CFOs demonstrate these seven key competencies:
- Strategic Business Acumen
The ability to understand complex business models, identify growth opportunities, and navigate competitive markets translates directly to the industry’s evolving financial landscape. This competency encompasses various skills, including risk and change management, planning, innovation, and others, which enable CFO partnership in strategic initiatives beyond mere financial oversight.
- Transformational Leadership and Emotional Intelligence
The ability to produce strong results by cultivating relationships and trust with varied stakeholders, and inspiring confidence during periods of uncertainty – essential skills in environments where clinical and administrative leaders must collaborate effectively on financial transformation initiatives. - Regulatory Expertise
Experience navigating healthcare’s complex regulatory environment, whether in provider organizations, payer systems, pharmaceutical companies, or healthcare services, provides essential preparation for compliance requirements and reimbursement complexity. CFOs must master Medicare and Medicaid regulations, value-based care contracts, quality reporting requirements, and compliance frameworks that vary significantly across different healthcare sectors. This competency proves particularly valuable as regulatory scrutiny continues to intensify and reimbursement models become increasingly complex. - Digital Transformation Management
CFOs who have led technology-enabled business transformation bring critical capabilities to the industry’s digital evolution, including data analytics, systems integration, and service delivery that directly support operational efficiency and clinical outcomes. - Agility and Resilience
Look for leaders who thrive in ambiguity, can make decisions with incomplete information, and guide the enterprise through rapid revenue model changes while maintaining operational excellence. - Technology Integration and Data Fluency
Beyond digital transformation and change management, CFOs must now master AI, automation, and predictive analytics as core competencies. According to HFMA research, these technologies are “no longer aspirational, they’re essential tools” that allow CFOs to move beyond traditional reporting to drive transformative change. This includes leveraging data to identify friction points in patient experience, optimize revenue cycles, and make strategic decisions across clinical and operational domains. - Consumer Experience Leadership
As patients become increasingly sophisticated consumers, CFOs now drive investment decisions to improve patient journeys, requiring skills in experience design, satisfaction metrics, and cross-departmental collaboration that extend far beyond traditional finance expertise.
The practical reality is that when traditional talent pools prove insufficient, it’s imperative to pivot from experience matching to competency evaluation. This shift from “Where have you worked?” to “What can you accomplish?” opens access to exceptional finance leaders who bring both proven capabilities and fresh perspectives.
“As healthcare organizations continue to evolve, focusing on these seven core competencies allows finance leaders to drive meaningful change, foster collaboration, and deliver results that positively impact both the organization and the patient experience,” notes Jessica Homann, Vice President – Senior Client Partner at Furst Group.
The SuccessPath Approach for CFO Transition Success
CFO transition success depends heavily on structured support during the critical first 90-120 days. Without this approach, 50% of executives fail or leave within their first 18 months, with average failure costs reaching 10 times the annual salary. This failure rate affects both internal promotions and external hires, suggesting that support for CFO transition is more important than the candidate source.
Effective CFO transition support addresses the unique challenges of healthcare finance leadership:
- Establishing expectations, communication styles, and cultural nuances
- Developing relationships with various stakeholders and clinical leaders
- Understanding value-based care financial models
- Navigating complex reimbursement systems
- Building credibility with clinicians and other key stakeholders
Recognition of C-Suite succession challenges led Furst Group and NuBrick Partners to develop SuccessPath, a systematic methodology that transforms executive transitions from risk management exercises into strategic advantages. Rather than hoping new CFOs will succeed through trial and error, SuccessPath provides structured support that accelerates effectiveness while reducing the risk of transition failure.
Our SuccessPath methodology addresses the unique transition challenges of both industry-experienced CFOs and cross-industry candidates. By combining enhanced assessment rigor with comprehensive transition support, SuccessPath enables organizations to expand their talent aperture with confidence in successful outcomes.
The SuccessPath Framework for Healthcare CFO Success
- Enhanced Assessment and Profile Development
Comprehensive competency frameworks and assessments offer a deeper understanding of CFO candidates’ capabilities and leadership styles, establishing clear evaluation criteria while identifying potential strengths and areas for development.
- Strategic Selection Support
Expert facilitation helps boards and selection committees review viable candidates and make informed decisions, ensuring stakeholder alignment while leveraging assessment insights to identify the best-fit candidate for your organization’s needs and culture. - Structured Transition and Integration
Comprehensive onboarding and integration support accelerates the effectiveness of new CFOs through facilitated stakeholder introductions, expectation setting, and relationship building, minimizing typical transition risks while establishing foundations for long-term success. - Performance Optimization and Sustainable Success
Ongoing coaching and milestone tracking through the first year transforms the typical six-to-eight-month learning curve into 90-day impact achievement, with continuous development planning ensuring sustained performance and value creation.
“When we implement structured CFO transition support, our client partners experience dramatically different outcomes,” explains Deanna Banks, Principal – Senior Client Partner at Furst Group. “We’re talking about the difference between a six-to-eight-month learning curve and achieving meaningful impact within the first 90 days. SuccessPath transforms what is typically the highest-risk period of executive transitions into a strategic advantage for both the hiring organization and the new leader.”
Long-Term CFO Succession Framework
Frameworks and concepts must translate into actionable steps that boards and executive teams can implement to address CFO succession challenges. Moving from crisis to continuity requires an intentional and systematic approach with a balanced strategy that leverages both internal finance talent and exceptional candidates from relevant industries.
Immediate Actions (30-90 days)
- Conduct a Comprehensive CFO Succession Assessment – Evaluate current succession documentation for both internal finance talent and potential external candidate profiles. Most discover significant gaps in their understanding of talent pipeline options, including both industry-experienced and cross-sector candidates.
- Board Education on Balanced Talent Strategy – Share market data on CFO turnover and the evolving complexity of finance leadership. Ensure governance alignment on competency-based evaluation that values both industry expertise and transferable capabilities from relevant sectors.
- Develop Dual-Track CFO Pipeline Strategy – Create parallel development paths for finance leaders while establishing frameworks for evaluating exceptional candidates from other complex regulated healthcare sectors.
Mid-term Strategy (6-12 months)
- Enhance Internal Finance Development – Assess current development programs against modern CFO role requirements, ensuring they prepare finance leaders for strategic partnership, digital transformation, and change management responsibilities beyond traditional financial management.
- Build Cross-Industry CFO Network – Develop relationships with executive search firms and professional networks spanning relevant industries. Identify specific sectors and roles that provide preparation for healthcare-specific CFO challenges while maintaining a focus on advancing industry-experienced talent.
- Establish Competency-Based Evaluation Frameworks – Move beyond rigid experience requirements to a systematic assessment of core competencies, such as strategic business acumen, leadership effectiveness, regulatory compliance, and transformation capabilities, whether developed in the healthcare sector or other transferable industries.
Long-term Positioning (18+ months)
- Create Balanced Succession Culture – Prepare your team to value both deep finance expertise and fresh perspectives from relevant industries. Ensure that clinical and administrative stakeholders understand how this balanced approach strengthens, rather than weakens, financial leadership capabilities.
- Implement Continuous Talent Intelligence – Establish ongoing processes to monitor both finance leadership markets and relevant cross-industry talent movements. Maintain relationships with high-potential candidates across both talent pools and pipelines.
Partnering for Success
While the frameworks and methodologies outlined provide clear pathways to improved outcomes for CFO succession, many organizations find the implementation process overwhelming. The complexity of stakeholder management, encompassing board members, medical staff leaders, community representatives, and regulatory bodies, creates a web of relationships and expectations that can hinder even well-intentioned succession planning efforts.
Boards often struggle to balance competing priorities:
- Honoring the legacy of departing leaders
- Managing internal candidate expectations
- Balancing communication and confidentiality
- Ensuring continuity throughout transitions
This is why choosing a partner with experienced succession planning specialists can help you manage these nuanced dynamics while providing objective guidance through emotionally charged decisions. External expertise proves particularly valuable in facilitating difficult conversations, managing stakeholder communications, and maintaining process momentum when internal politics or competing agendas threaten to derail succession planning efforts.
“Organizations often underestimate the complexity of CFO succession until they find themselves in the position of recruiting a new one,” notes Sherrie Barch, CEO of Furst Group and NuBrick Partners. “As partners in the process, we provide the objective guidance and systematic approach that enables boards and search committees to make confident decisions while maintaining momentum throughout the process.”
The Ongoing Advantages of Effective CFO Succession
Organizations that excel at succession gain resilient competitive advantages that compound over time. These advantages become particularly critical as complexity increases and traditional talent pools evaporate.
- Enhanced Talent Management – Institutions known for supporting successful CFO transitions attract better candidates, creating positive cycles of talent attraction and retention, which is valuable when competing for limited industry-experienced CFO candidates.
- Accelerated Strategy Execution – CFOs who onboard quickly drive strategic results faster, enabling organizations to respond more effectively to market changes, regulatory shifts, and competitive pressures that require rapid financial adaptation.
- Improved Resilience – Systematic CFO succession planning and transition support lead to higher performance during financial leadership changes, minimizing disruptions to revenue cycle management, strategic planning, and stakeholder relationships.
- Sustainable Leadership Pipeline – Each successful transition strengthens processes and increases confidence in managing financial leadership changes, creating sustainable advantages in competitive talent markets while reducing dependence on external search timelines.
Organizations that implement this comprehensive framework will position themselves well in the competitive talent market and increase their retention of high-performing finance leaders. However, it is imperative to remember that effective succession requires more than just planning; it demands intentional, consistent actions and support.
Moving from CFO Crisis to Continuity
The CFO succession crisis represents both an unprecedented challenge and a significant opportunity for those willing to adapt and refine their approach to financial leadership. Boards and executive teams that act decisively will position themselves for sustained competitive advantage, while others experience increasing disadvantage in both talent acquisition and performance.
The solution requires vital shifts:
- From reactive CFO searches to proactive succession management that values both industry expertise and transferable capabilities
- From narrow experience matching to competency-based evaluation frameworks
- From hoping for successful transitions to systematically engineering them through structured support
Critical success factors:
- Recognize that exceptional CFO candidates exist both within finance ranks and among proven leaders from relevant industries
- Develop systematic approaches to identify, evaluate, and support leaders from both talent pools
- Implement comprehensive succession planning and transition support regardless of candidate source
The strategic imperative
When you apply this balanced approach to CFO transitions, you will emerge with stronger financial leadership teams positioned for long-term success. Those who continue with traditional approaches face increasing disadvantage in both talent acquisition and performance as market pressures intensify and traditional talent pools continue to shrink.
With CFO turnover rates reaching crisis levels and no indication of improvement in traditional talent availability, the time for action is now. You cannot afford to wait for market conditions to improve or talent pools to expand. The competitive advantages belong to organizations that implement systematic, balanced succession strategies today.
Learn more about succession planning in The “S” Word: How Avoiding Succession Planning Is Impacting Your Profitability and Future. Need an executive search or succession partner? Connect with the experts at Furst Group and NuBrick Partners to discover why clients trust us for improved outcomes.
