Healthcare leaders spend a great deal of time discussing reimbursement, workforce shortages, occupancy, and rising operating costs. Yet one of the most important recommendations in a recent article from the Healthcare Financial Management Association (HFMA) had little to do with accounting or spreadsheets.
It was this: Instill financial literacy across levels of leadership.
Some of the most significant financial decisions made in a facility happen outside the finance office.
HFMA made this recommendation while discussing how health systems can reduce premium labor costs and build a more sustainable workforce. Although the article focused on hospitals, the lesson is equally important for skilled nursing and long-term care providers.
This article draws on HFMA's How a health system can reduce premium labor while building a sustainable workforce, published May 2025 and updated June 2026. Readers interested in the full framework are encouraged to read the original piece.
Financial Decisions Are Made Every Day
Every department leader influences a facility's financial performance, whether they realize it or not.
A Director of Nursing decides whether to approve agency coverage or adjust staffing based on census. A Dietary Manager places food orders and manages inventory. An MDS coordinator completes documentation that affects Medicaid reimbursement. An Environmental Services Manager approves overtime to complete work before the next shift. An Admissions Director accepts referrals that influence payer mix.
None of these leaders consider themselves financial managers. They are making operational decisions to provide quality care and keep the facility running smoothly.
The financial impact of those decisions often does not become visible until the monthly financial statements are distributed. By then, the opportunity to make a different decision has already passed.
Financial Literacy Is Not About Accounting
When people hear the term "financial literacy," they often assume it means learning accounting principles or understanding complex financial statements.
That is not what HFMA is describing.
Financial literacy means understanding how everyday operational decisions affect the organization's financial health. It is recognizing how staffing decisions influence labor costs, how documentation affects reimbursement, how purchasing practices impact vendor spending, and how admissions decisions shape payer mix.
Department leaders do not need to become accountants. They need enough financial understanding to recognize the consequences of the decisions they make every day.
That knowledge creates better conversations between operations and finance. More importantly, it leads to better decisions before financial problems appear in month-end reports.
Better Information Leads to Better Decisions
Building financial literacy requires more than training sessions.
Leaders need timely, understandable information that connects operations with financial performance.
Traditional financial statements are essential, but they are often designed for finance professionals. Department managers benefit from information presented in a way that answers practical questions.
The Questions Department Leaders Should Be Able to Answer
How is overtime trending in my department this month?
Is agency usage increasing or decreasing compared to last month?
Are supply costs exceeding budget, and if so, by how much?
Has Medicaid reimbursement changed, and does our documentation reflect current resident acuity?
Are vendor costs moving in the right direction?
When leaders receive information that is clear, relevant, and easy to understand, they become more confident decision makers. Instead of reacting after the month has closed, they can identify trends earlier and make adjustments while there is still time to influence the outcome.
Financial Literacy Strengthens the Entire Organization
Organizations rarely improve financial performance because of one major initiative. Improvement usually comes from hundreds of better decisions made throughout the organization every week.
That is why financial literacy should not be viewed as a finance department responsibility. It is a leadership responsibility.
Facilities that encourage department managers to understand the financial impact of their decisions often develop stronger cost awareness, greater accountability, and better collaboration across departments. Clinical leaders continue to focus on quality care, but they also understand how to protect the financial resources that make that care possible.
What This Means for Long-Term Care
Long-term care providers continue to face pressure from rising labor costs, reimbursement uncertainty, inflation, and increasing operating expenses. Those challenges cannot be solved through finance alone.
They require department leaders who understand how their daily decisions affect the organization's financial performance.
This is one reason Ganavyx emphasizes practical financial visibility rather than complicated reporting. Whether reviewing vendor spending, evaluating labor trends, improving Medicaid reimbursement, or providing simplified monthly financial reporting through Margin Compass, the goal is the same: give leaders the information they need to make informed decisions before small issues become larger financial problems.
HFMA's recommendation reflects an important shift taking place across healthcare. Financial literacy is no longer reserved for CFOs and finance departments. It is becoming a core leadership skill.
The facilities that build this understanding now will not be reacting to financial problems at month end. They will be preventing them.