The CEO of Cheshire Medical Center in New Hampshire shares plans on getting his hospital out of the red and becoming top choice for patients and employees.
Rural hospitals are facing a lot of difficulties lately, including margins in the red, aging employees and communities, and challenging payer mixes.
One such hospital is Cheshire Medical Center in Keene, New Hampshire, a 150-bed hospital that offers programs not often available in rural medical centers, such as primary care, cardiology, gastroenterology, and ophthalmology. The rural hospital ended fiscal year 2022 with a -4.2% margin, $10.8 million loss where staff salaries were $8 million over budget due to reliance on contract labor, according to its 2021–2022 annual report to the community.
Joe Perras, MD, was recently selected to serve as the hospital's new president and CEO, and has the role of leading the hospital out of the red. He recently spoke with HealthLeaders about financial and workforce strategies that will hopefully see the hospital go from surviving to thriving.
HealthLeaders:How is everything going so far as you hit the ground running in your new role as CEO?
Joe Perras: Like a lot of rural hospitals across the country, we have a lot of headwinds that we're facing and we're taking them head on at Cheshire. We've had a lot of financial pressures over the last couple of years, some significant losses that we need to start filling in the holes that those losses created. We need to rebuild ourselves financially and clinically so that we're here for the next 100 years. There's no plan B for Cheshire County; we are the largest provider of healthcare for our county and serve as a regional referral center. We need to make sure that we shore up our finances, our clinical work, our service lines so that we can keep fulfilling this incredibly critical role for the region.
HL: How will you be prioritizing the financial health of CMC and working through those issues?
Perras: It's a balance. We need to make sure that we are a lean organization. We need to make sure that we are staffed appropriately to provide the highest quality care and the safest possible environment for both our staff and our patients. But we have to balance that desire to be lean with an ability to still grow and meet the needs of our community.
There's an old saying around hospital leadership: no margin, no mission; and that's true. We are a nonprofit, but we have to make some money so that we can reinvest in our institution, so that we can upgrade aging infrastructure, so we can invest in our providers and nurses and all of our staff, and make sure that we remain competitive with a rapidly changing labor market. It sounds simple and a little archaic, but it's true— if we don't have a margin, we have trouble meeting the goals that we have set to care for our community and to care for our staff.
I've tried to focus early efforts around making sure that our staff know that they are the most critical part of our mission, providing a safe environment of care for them, and growing reliance on each other, because if we don't take care of our staff, they're not going to have enough left in the tank to take care of our patients.
HL:What has and hasn't been working with CMC's current and previous financial strategy and what other strategies you'll be implementing to pull CMC out of the red to provide for your patients?
Perras: There's another quote that flies around systems analysis, and it comes from a professor at the Dartmouth Institute, a gentleman named Paul Batalden, who said 'every system is perfectly designed to get the results that it gets.' The system that we've had in place here for years I don't think it can work in our current operating environment post-pandemic.
We have to be more analytical in how we look at the things that we do, even something as forward facing as patient care and the intimacy that comes with that. We've got to look at how we care for patients; how patients move through our health system. We're dealing with a hyper mobile workforce now and we have a reliance on traveler staff or contracted labor that we didn't have to deal with before.
People talk about the great resignation that occurred during the pandemic for healthcare, but it was more of a great reckoning. We now have to reckon with how our staff moves around the country very, freely, how remote work affects what we do for staffing, what tech solutions there are that can actually decrease some of the administrative burden that our providers, physicians, nurses, associate providers have to face every day. We need to look at things differently than we used to because we've seen the results of what the current system has led to. Now we've got to adjust.
The practice of medicine and the leadership of hospitals is not going to go back to what it looked like in 2019 up through March of 2020. Things have changed and we have to respond to it. We have to change in accordance with the environmental challenges that we have. There's no one strategy—it's all strategies.
HL: How does your background as an MD and chief medical officer give you a different perspective on ways to keep a rural hospital financially viable?
Perras: I have an awareness of how hard the jobs are for providers and nurses. I've always had good insights to stresses on both sides for nurse and provider. That said, I've had to learn a lot about hospital finance, contracting, care management, other work over the years, all the other non-clinical side and my job is to balance all of the operational needs of the hospital, the needs of our provider and nursing staff, and all of our staff from surgeon to environmental services and everything in between. We need to make sure that we make decisions that make us not just the provider of choice for patients, but the employer of choice for staff because we have intense workforce shortages that were brewing before the pandemic and have been amplified wildly since the pandemic kind of ended.
I try to bring an awareness of what it's like from the bedside to the C-Suite and balance a lot of competing priorities.
HL: Aside from financial challenges, rural health organizations struggle with recruitment and retention. What can you implement or refine to improve with recruitment and retention efforts in a rural location?
Perras: The first thing we could do is try to grow our own staff. And that means working with area colleges, community colleges, high schools to develop a pipeline for folks to the healthcare industry. What I tell folks is healthcare is really one of the last remaining true paths to the middle class. In the old days, we had manufacturing and auto work, and a lot of those pathways to the middle class have dried up over time. And we see it in Northern New England, old mill towns and old manufacturing sites that have gone away. And then what's left in the town? Well, oftentimes what's left in the town is a hospital. We tend to be the largest employers and real engines for the communities that we serve. We need to stress that.
Every hospital I've ever worked in has had examples of folks who came in as a volunteer or started as a licensed nursing assistant, and then rose to a managerial position along the way, and had the support of the hospital to do so. We do things like tuition reimbursement, we look for leadership opportunities and extra training for our staff. There's always opportunity for folks who are interested, so we need to grow our own. We need to make sure that we are doing everything we can to improve employee engagement across our hospital. Engaged employees provide higher quality, safe care than unengaged employees. People who believe in the mission will give their all to take care of patients, and we need to foster that.
We need to have improved financial performance so that we can respond quickly to when the market changes for compensation and benefits. We're part of a larger health system, Dartmouth Health, and we are trying to align ourselves with how Dartmouth Hitchcock and other system members are paying their staff. That's typically more than rural hospitals can afford to pay, so we need to make sure that we're operating at a level that we can afford to do that.
I go back to my point around having a hyper mobile workforce. People will drive for a few bucks an hour or more at a certain position and we have to be aware of that. So make sure that we are like I said earlier, not just the provider of choice, but the employer of choice. If we can do that, then we'll solve some of our workforce challenges.
I don't think our reliance on traveling nurses and traveler tech positions, I don't think that's going away. They'll always be some and we need to make sure that we try to minimize that amount. But if safe, high quality care demands that we have more travelers, than we need to allow for that and pay for them.
HL: As a former CMO and current CEO, how do you balance being competitive with compensation with the financial challenges being faced as a rural hospital?
Perras: The same stresses that we are facing in our rural environment around compensation is what everyone else is facing too. I Chair The American Hospital Association's Committee for Rural Health Services. I have a forum where we get together three or four times a year and share our stories for rural health providers and it's the same everywhere. Everyone's thinking about becoming part of a larger health system or thinking about joining with another rural hospital to gain a little bit of scale to allow for better benefits and to improve staffing.
But it's challenging. We are dealing with an older demographic. Rural environments tend to be older, we get reimbursed largely through Medicare and Medicaid, those are our primary payers for patient care reimbursement. Most rural areas are not growing in population unless you're in a resort mountain town. It's shrinking populations which makes everything that much harder. You've got an older population and an older workforce, net migration out, and a payer mix that is challenging. So, despite all of that, we have to kind of thread the needle and make sure that we can provide competitive wages so that we're not losing the limited staff that we do have to other folks in the market.
That said, if word gets on the street that Cheshire is the place to work, we will attract folks and we have been successful in attracting physicians and other providers from out of state to come. Keene is a lovely community and it kind of sells itself when you get here.
Annette Walker details the progress on the organization's Irvine campus and how the Lennar Foundation Cancer Center is already seeing results.
City of Hope's mission is "to transform the future of cancer care," and the academic cancer organization is making tangible steps to do just that.
Just this past year, City of Hope acquired what was previously Cancer Center Treatment Centers of America (CTCA), creating a larger organization to focus on cancer treatment, clinical trials, and the path to cancer cures.
Additionally, the organization's Orange County, California location opened the Lennar Foundation Cancer Center in Irvine, California, and broke ground on a larger campus that will also house a specialty cancer hospital. The academic cancer organization aims to bring care to 20% of the population who have had to leave the Orange County area are able to receive specialized cancer care.
In a recent interview with HealthLeaders, City of Hope OC's president Annette Walker shares progress on the Irvine campus and how the Lennar Foundation Cancer Center is already helping patients close to home.
HealthLeaders: What outcomes have you seen since the opening of the Lennar Foundation Cancer Center in August 2022?
Annette Walker: Our volumes are 200% of what we thought we could do this first year and we've made some good progress on our long-term goals. [Previously, 19–20%] of people left Orange County for specialty cancer care and research. It's [now] down to 15%. I don't know if we're going to be able to take all credit for that, but we can take some credit for that, for sure. That will continue to grow because there's always a little bit of lag in those statistics, but there's been a big dent in it and that was part of our mission to come here was to be able to do that. People don't have to drive two hours for [cancer care] anymore. It's nice to be able to share that and to bring that level of expertise to this community.
HL: How does City of Hope's acquisition of what was previously CTCA help your work in Orange County?
Walker: City of Hope will have five facilities in five metropolitan markets of the United States that represent a very rich and diverse selection of patients. How much faster are we going to be able to get clinical trials done when we have access to those five facilities and all the patients who are in those facilities? To me, that's part of the greatest gift. It is a significant add to our capability to imagine when we get that engine fully functioning and we have clinical trials. I think last year we treated 135,000 people, but as City of Hope Atlanta, Chicago, and Phoenix becomes fully integrated, it's going to be even more. Ultimately when this is all said and done, we will be one of the largest cancer networks in the United States. Bigger's not always better, better is better. And this is better.
HL: How are things going with the development of the Irvine campus, including the construction of the specialty cancer hospital? Is it still slated to open in 2025?
Walker: I'm happy to say it's still on time; we're still aiming to open in 2025. It's going to be [around] 160,000 square feet. We did a different design in that the buildings were designed to operate like one. A lot of the high-powered diagnostics that normally are only in a hospital are already present in the Cancer Center and will support the hospital. And when you walk in, you basically step over the threshold of one into the other.
It will help us complete our promise to Orange County. There are a few things we can't do because we don't have a hospital yet, that we will be able to do in the hospital, and the patients won't have to travel to Duarte for those services. Additionally, we'll help even more people and be able to move the patients back and forth between inpatient and outpatient, and having all of that right here on this campus is going to be wonderful.
This expresses how I feel about it too, but we have a guy on our construction team who was also a City of Hope patient. And this is what he said when he was watching the steel go up, "this brought me so much joy this morning while we were building this beam by beam, column by column. We are dismantling the scourge of cancer." It brought tears to my eyes. There's nothing I could have said that would have expressed it better: we're not just building a building, we're building hope.
HL: Are there any other news that you would like to share about the other City of Hope OC locations?
Walker: The network is maturing as we figure out what we keep at the Lennar Foundation Cancer Center. Our dream is to move more research into the network sites. We're figuring out which facilities are the best to bring services to. We're building an integrated medicine practice for cancer patients, and so how do we make some of those services accessible in the community too, not just at Lennar.
You're going to see a lot more activity in the prevention area because that's the very best way to beat cancers. You're going to see a big contingent of that in Orange County and a lot of that might be done in the network as well as in some of our integrated medicine work. Every cancer patient needs integrated medical support.
HL: What other initiatives are you currently focused on as president of City of Hope OC?
Walker: One is getting everything built. But I have two other passions: one is Orange County itself, and that we make City of Hope not just an academic facility up on the hill; we want to be a citizen of Orange County. We want to be an active participant in this community and the leadership team and our staff are all working hard at making that happen.
The other is the development of leadership and how we can support people becoming better leaders. We have a thing we do here called "leadership between the lines" and we have management sessions, but we also have another session for anybody to come. You don't have to be a manager because you can lead from wherever you are. We encourage anybody who's interested in being a better leader, even if they don't have a management responsibility, participating and learning in the same way that our leaders are learning. Ultimately, all these things lead to cultural development, which is in sync with the legacy City of Hope.
Northwell's chief people officer, Maxine Carrington, shares HR insights for a changing healthcare workforce.
HR leaders are responsible for their organization's workplace culture, impacts on employee wellbeing, ways to combat burnout, and recruitment and retention efforts. They are an important part of any organization's C-suite.
During this past week, HealthLeaders celebrated Workforce Week by sharing thought leadership and strategies from different C-suite leaders to help you better serve your own organizations.
To close out the week, we bring you a special HealthLeaders podcast interview featuring Maxine Carrington, the Chief People Officer at Northwell Health.
During the interview, Carrington shares insights on HR for a changing healthcare workforce, including the importance of culture keeping up with current recruitment and retention trends and effectively making organizational change as an HR leader. You can also listen to the interview here.
HealthLeaders: How has human resources and the importance of workplace culture changed over your career?
Maxine Carrington: There's been so much change in the broader environment of healthcare, the industry, and then our own organization. As the place in which HR exists is evolving, HR has to be evolving as well so that you're relevant, and whatever services, programs, processes are in place, are resonating with what the business needs.
As the tools get better to give us insights, and as we have more access to insights, it has helped HR better target decision making and strategies with better data. There's been evolution there.
If you think back to the personnel days, there was a focus on getting people paid, the regulatory and compliance pieces. We saw a big evolution toward the science of experience, because that's going to differentiate you from others and help with retention and attraction.
Approaching the pandemic, during the pandemic, and after, there's a huge focus on workforce planning: looking at the supply of labor more intentionally, more strategically, and in a fiscally responsible way. That's inclusive of succession planning, as well as equity, diversity, inclusion and belonging.
HL: How are you leading initiatives around workforce recruitment and retention?
Carrington: Northwell has always had a focus on culture first. Even when we do M&A, the conversation for us with the potential partner starts with culture. Let's talk about your values. Let's talk about what's important to you. What are the behavioral commitments? What's your culture like? That's where the conversation starts for us.
That helped us through the pandemic in terms of morale and retention. Our turnover never went up that high relative to others nationally and locally. The differentiator for us was how much we demonstrate a level of caring and investment in our workforce and our team members. Culture always helped us.
The other thing that worked for us was we created our own staffing agency a few years ago, and that has added so much value. It allows team members to have gig work opportunities within our own staffing agencies, so they don't have to go elsewhere, but also fulfilling short term gaps. It's also revenue producing; our staffing agencies staff for other companies as well.
We actually brought in one of our operators to lead recruitment for us and to lead talent acquisition because we said it would be great to bring a customer mindset in a leader. When you look at our scale, we're almost 86,000 people just employed, not to mention volunteers. [We brought] in an operator to look at our infrastructure and where we should be focusing our effort.
The recruitment strategy, [we're looking at] how do we get more targeted in where we recruit, who we recruit to, and how? How do we raise the visibility of the brand to make us more attractive?
And then the last thing I'd say is just to focus on retention, not just recruitment. We look at our data to see where we've got hotspots, we try to understand why we're vulnerable, and then we try to address those vulnerabilities to ensure that we're retaining. Our turnover has come back down to our pre-pandemic numbers very quickly, and I think all of those pieces have definitely proven helpful to us.
We have amazing team members, amazing leaders. It's not only an HR thing—everyone wants to step in and help and be part of the solution.
HL: How do you effectively make change in your organization as the Chief People Officer?
Carrington: We stood up within HR a change management function. They support the whole organization because we know that change is constant in healthcare. They think about the psychology of change, and that means everything from how you communicate change, the timing, how you assess people's readiness for change. They've gotten more sophisticated and refined in that assessment, which helps us determine how much we push change, to what degree, and how. They partner with our internal communications teams, and our marketing teams, and our finance teams, and so many others. Having a dedicated function that they become expert at it and help guide the rest of us, has given us the right infrastructure to better effectuate change.
It's not enough to just articulate why the change is important. You also have to articulate what will happen if we don't change. That is an important distinction. I have found in my experience that it's a bigger justification.
We really do try to [have] a thoughtful process in driving any change and I'm grateful for the support of our change management team.
HL: What advice do you have for aspiring HR leaders?
Carrington: One is this aspect of learning, that you never allow yourself to get stale. Learning takes on multiple shapes. It's not always formal classes, it's learning through conversations, it's podcasts, it's books, it's studying your environment. Having a learning mindset keeps you open to growth and the change that has to happen, and it enables you to never get stagnant.
Creativity is a bone I tell people to develop. It helps with innovation. Anything that allows you to turn that aspect of yourself to become more creative allows you to become more innovative.
And then networking and building relationships. It benefits you from a growth standpoint. It helps you to contribute and help others get better, and it certainly helps the organization get better.
Scott Wester details his first year as president and CEO of the south Florida system and looks toward future strategies, including slashing the system's turnover rates.
The first 365 days on the job are a vital time for a health system CEO. In this time, the CEO can make or break their organization's success. While a year can go by fast without major change, that wasn't the case for Scott Wester, who joined Memorial Healthcare System as president and CEO in July 2022.
During Wester's first year of leading the South Florida-based nonprofit system, the team has already made headway in staff turnover and lowering agency utilization.
In a recent interview with HealthLeaders, Wester details those successes and his future strategies for the system.
HealthLeaders: What short-term goals did you accomplish during your first year as president and CEO?
Scott Wester: Listening, learning, and leading: that was my framework of what I wanted to get accomplished when I started back in July 2022.
COVID changed the landscape of how we dealt with the workforce, predominantly the reliance on agency nurse travelers, outside contractors, and not having enough personnel to meet the demand that was out there, mostly on the clinical side. Workforce development was that first leading charge to really move things forward. I've been more than impressed with how we've really changed the narrative on our workforce over the last 12 months.
We were almost $280 million a year of utilizing outside contract or incentive pay and heavy reliance predominantly on nurse travelers.We recogniz[ed] we needed to get back people wearing our Memorial badge. Over the course of 12 months, we've dropped about 80% of use of outside contract labor. We're now about a $200 million savings just on that perspective.
We did it with the intention of understanding we had to make sure that we had a better talent acquisition team, making sure that we played more offense than defense, and by reaching out to the work community to try to figure out what are things that are maybe are limiting the people to come join our organization.
We work very closely getting information, understanding we needed to do some market adjustments on individual pay raises for certain job classifications, and working closely with our university and educational facilities. Over the course of the last year, we've had a record year of hires within the organization. We hired 3,700 individuals, and of that we had 1,250 RNs. Our turnover went from around 21% and now we're below our historical average of under 14% over the course of the year.
The team has done a great job. Our chief nurse executive, Monica Puga, said we have to create the best experience possible for our students. We have embraced our students, and in turn, we did over 1,700 nursing rotations this past year. Nurse externs can have other job categories such as phlebotomy and EKG techs, so they understand the pace of play as it is for nursing, and [we're] able to then try to get them to join our organization.
We have over 500 nurse residents and I think we have 23 fellowship tracks of about 250 fellows. We now have 23 different types of fellowship programs that can accelerate an individual nurse who wants to go to a higher level of clinical care.
HL: What are you currently working on and how will these help with your long-term strategic goals?
Wester: Wenow have a very structured short-term incentive program for our leadership team that is focused on key areas such as improving clinical quality and patient safety as it relates to throughput and access, down to how we deal with the experience of the consumer.
Our two-year retention plan is vital for really changing our turnover rate. Our goal is to even drive that further knowing that the first 24 months of an individual beginning of working relationship with us is very important.
We put new communication activities, from new employee orientation to following up after a couple of weeks, after 6 months, and after 180 days, so that people feel that they're part of the Memorial family from day one and to make sure we understand what's working well and what's not working well.
HL: How would you describe Memorial Healthcare System's overall culture?
Wester: Our overall culture [is] very family oriented as it relates to the engagement of our workforce. This sense of belonging and community resonates throughout the organization, which then resonates into the community. We are community-centered, working hand in glove with community influencers, leaders, and stakeholders to improve overall health and well-being of a community, and we do it exceptionally well.
HL: Looking to the future, what is your overall vision for Memorial Healthcare System?
Wester: Overall we've been focused on what we call patient-centered care, and [want] it moving from patient-centered care to person-centered care. We want to pivot more into people's top of mind and awareness.
We've been fortunate; we're one of the best trusted health systems by Monigle in the country. It's because the interconnection between the community at large with Memorial is tight. When people are thinking healthcare, we want to be first of mind and awareness. This person-centered care is going to be very critical for us to really move into that next level of interrelationship with individuals across South Florida.
HL: What are some of your long-term goals for the system?
Wester: It's multifactorial. We have a lot of demand for clinical services. We've done an exceptional job of building infrastructure for the depth and types of clinical care we provide, whether it's on the acute care side, the ambulatory side, and the clinic side.
We have a provider-sponsored network, a health plan called Community Care Plan that predominantly serves employers but also those with Medicaid. We're making sure we're efficient with the premium dollar. We're one of the best value-based ACO's in the country producing that value equation back to employers, back to key stakeholders, whether it's the state government or federal government.
But we also have to be a good financial steward. We always have to figure out how to become more efficient in the process and making sure we're able to maintain the level of financial strength. We're AA, we're one of 26 health systems in the United States, that's AA rated by S&P. So, ensuring that we have the resources to do the next best thing for our community.
HL: What steps will you take to ensure financial and operational success as you move forward?
Wester: We have to be very efficient. It's not just looking at part of the organization, we've got to look at the whole organization. We created a new innovation center to look at this business differently, to be more efficient and be able to reward our physicians and our caregivers. If they have great ideas, we'll go work with them and maybe even produce some extra level of innovation dollars for them, personally. We call it the "reimagine approach."
We're a very large academic platform. We have almost 300 residents that are part of our learning environment, so we want to extend that learning across everybody within the organization, not just on the educational front, but across all disciplines.
HL: What needs to change to make healthcare better from a business perspective?
Wester: The incentives in the business aren't well aligned together, which causes this over utilization of services to redirection of services. We as an industry are losing sight of what's most important, which is making sure that we serve in a patient-centered mind, coordinated, collectively together as one. There's a lot of bouncing around in our industry, which then gets a lot of frustration to our patients because they either have insurance authorization issues, they get redirected for their clinical, care, maybe providers don't interact or collaborate about what's best for that individual based off of either scientific advancements or making sure there's coordination to ensure there's not issues that fall in the cracks of our system.
That's why organizations like Memorial are well positioned because our first understanding is we're here for our patients. We're here to make sure that we're able to walk them through that whole process without having to fall through some of those traditional cracks or traps that happen in other markets. That's our personal responsibility here at Memorial, to make sure that we do a much better job of that coordination of care, whether it's prevention, screenings, readmissions, to right level of care at the right place and the right cost.
The Wisconsin and Oregon healthcare markets have two merger deals that could completely disrupt their competitive markets if they go through. But will the FTC give these deals the green light?
According to a recent Kaufman Hall quarterly report, M&A activity increased and brought the number of deals back up to pre-pandemic levels during Q2 of 2023.
Between April and the end of June 2023, there were 20 hospital and health system M&A transactions announced, making it the highest number of transactions announced since Q1 2020.
And the numbers aren't slowing down in terms of health systems announcing plans to merge—but garnering regulatory approval and moving forward with the deal is another story. With the FTC cracking down on antitrust laws and even state and local governments stepping in, deals getting the green light feel often few and far between.
The recent South Dakota-based Sanford Health and Minnesota-based Fairview Health Services failed deal comes to mind, first announced in November 2022, which hit hurdle after hurdle, including a Minnesota state law passed in May 2023 to ban healthcare entity monopolies. Even with a combined footprint that didn't overlap, the deal to create a 58-hospital system was canceled in July 28 due to a lack of support from Minnesota stakeholders.
Two recently announced M&A deals in Oregon and Wisconsin could change their respective markets if regulatory approval is granted, but it looks like a long road ahead for these deals.
Legacy Health and Oregon Health and Science University (OHSU) announced on August 16 that the area's two largest health systems signed a nonbinding letter of intent to merge and create one integrated health system in Portland, Oregon.
Legacy Health, a nonprofit health system, and OHSU, an academic health system with Portland's largest hospital with 576 licensed beds, have had a decades-long relationship, and this deal appears to be OHSU saving Legacy Health from financial distress.
This year, Legacy Health has had to close and sell off locations due to financial issues, including plans to close the Family Birth Center at Legacy Mount Hood Medical Center in Gresham earlier this year, and a tentative deal to sell off lab locations to restructure the struggling hospital's balance sheet.
The deal, still in the first step of the transaction process but expected to close in 2024 following regulatory review, would have Legacy Health joining OHSU, the #1 ranked Best Regional Hospitals in Portland, Oregon by U.S. News & World Report.
As part of the merger, OHSU will make a capital commitment of approximately $1 billion over 10 years to support primary services and community-based services for the combined system.
The combined system would become the largest employer and health system in the Portland metro area, with more than 32,000 employees across 10 hospitals and more than 100 locations.
The new system's footprint would eclipse the other systems competing for patients in and around the Portland metro area, including:
Providence: Providence Portland Medical Center and several laboratory patient service centers
Kaiser Permanente: Kaiser Permanente Sunnyside Medical Center and Kaiser Permanente Westside Medical Center, and more than 20 medical office locations
Adventist Health: Adventist Health Portland, nine primary care locations, 15 specialty care locations, and six urgent care locations.
With an overlapping footprint in the Portland metro area, the FTC and state government may step in stop the process due to antitrust regulation and concerns of a healthcare monopoly. And if the deal does go through, it will create an even larger and stronger competition for other health systems in the area.
Froedtert Health and ThedaCare approved a definitive agreement on September 6 to combine the two health systems by the start of 2024, pending regulatory approval. Milwaukee-based Froedtert Health and Neenah-based ThedaCare first announced the deal on April 11, when the systems signed a letter of intent to combine.
Froedtert Health is an integrated healthcare system with 10 hospitals and 45 health centers and clinics in partnership with Medical College of Wisconsin creating the Froedtert and MCW health network in Southeast Wisconsin with an annual revenue of $955.8 million. ThedaCare, based in Neenah, serves communities in Northeast and Central Wisconsin through eight hospitals with an annual revenue of $439.6 million.
Currently, the systems have an existing quaternary partnership, including the Medical College of Wisconsin, to expand healthcare access in the state as well as a joint venture to create two new health campuses in Fond du Lac and Oshkosh.
Following the merger, the 10-hospital Froedtert system in the southeast and the 8-hospital ThedaCare system in the northeast of the state plan to operate under their established brands and names.
While the organizations have not disclosed financial agreements, Fitch Ratings affirmed Froedtert Health's Stable AA rating in June 2023 and has kept ThedaCare's affirmed rating from December 2022 as AA- Stable.
The goal is for the merger to be completed by the end of 2023, pending the completion of a definitive agreement, due diligence, and board and government regulatory approvals, which may fare well for the systems. There are 37 community health and hospital systems across Wisconsin, and Froedtert Health and ThedaCare don't overlap in footprint, not including their joint ventures. But will this be enough for the FTC and the state government in terms of competition with the state's other health systems? We'll have to wait and see.
The first look at HealthLeaders' Workforce Week, five days of coverage spotlighting must-know strategies for healthcare HR leaders beginning Monday, September 11.
As the healthcare workforce continues to evolve, so does the role of human resources.
HR leaders are no longer siloed and left to focus just on benefits programs. They are a larger part of the organization's C-suite leadership team, strategizing on workplace culture, impacts on employee wellbeing, ways to combat burnout, and recruitment and retention efforts.
For five days, beginning September 11, you'll have the opportunity to learn from HR professionals and other leaders in healthcare and other industries on how to keep up with the changing tides. Here's a sneak peek of what to expect during HealthLeaders' Workforce Week.
Preview 1: Addressing Workforce Challenges With the Help of CEOs
Between the labor shortages, diminished margins, accelerating competition, and even leadership vacancies, there’s a perfect storm of workforce factors pressing healthcare CEOs. CEOs need to employ meticulous strategies and team up with their HR leaders to rein in costs while creatively thinking about building a sustainable workforce.
Preview 2: 12 Metrics Every HR Professional Should Track
Metrics have always been an important part of HR, but to many HR professionals, 2022 was the year they became essential. In an incredibly tough job market, a political landscape where everything felt flipped upside down, and a rocky economy, companies were desperate to hold onto their employees as priorities shifted and workers made drastic choices.
Preview 3: A Focus on Employee Well-Being
Improving overall employee well-being can have important and positive impacts on the engagement, loyalty, productivity, and innovation of a workforce. Although the term is broad, employee well-being includes monitoring and taking steps to address both physical and mental well-being, as well as opportunities for advancement and a sense of belonging and inclusion.
Preview 4: Fixing the Ecosystem
Often great leaders are born of necessity. They see something wrong with the current state of affairs and decide that they should make a personal effort to change things for the better. "It's not just about fixing individual challenges faced by specific groups, but about addressing the overall ecosystem," says one HR leader.
Preview 5: "It Starts With Culture"
HealthLeaders is joined by Maxine Carrington, the chief people officer at Northwell Health, on the HealthLeaders Podcast for a special workforce week episode. During the interview, Carrington shares insights on HR for a changing healthcare workforce, including the importance of culture, keeping up with current recruitment and retention trends, and effectively making organizational change as an HR leader.
Being strategic with your organization's operations will help your business stay on top.
Hospitals and health systems must always look at their operations when updating their organization's strategic plan.
Are the organization's care offerings what the community needs? Are they bringing in money for the business? How can operations be changed or slightly shifted to save on costs? Can partnerships with other organizations fill patient needs while also freeing up staffing and important real estate?
These are all questions that healthcare executives should keep in mind.
Learn from three healthcare executives on ways they are improving operations at their organizations to better serve their communities and the business.
Bassett Healthcare Network is headquartered in Cooperstown, New York, a village in central New York state with a population of less than 1,900. The system serves communities in eight counties across 5,600 square miles in central New York, and sees more than 700,000 outpatient visits per year.
Bassett Healthcare Network president and CEO, Tommy Ibrahim, MD, MHA, spoke to HealthLeaders about the hardships that rural health systems are currently facing and what steps the health system is taking to mitigate those.
And one way Bassett is addressing critical areas is looking at the heart of the system's operations.
Flipping the org chart "is an intentional, structural, and sustainable strategic management change that equips frontline team members as leaders, informing and implementing necessary advancements," he said.
Davis shared three steps that have helped Baptist Health South Florida and the Miami Cancer Institute flip the org chart to create better outcomes for patients and employees, combat operational challenges, and create a stronger and more collaborative culture.
LuAnn Brady, MSPH joined the University of Maryland Shore Regional Health (UM Shore Regional Health) in February as the organization's COO and now oversees hospital and outpatient facility operations throughout the five-county region the system serves.
UM Shore Regional Health is a nonprofit health network that serves the mid-shore region of Maryland, which includes Caroline, Dorchester, Kent, Queen Anne's, and Talbot counties. It operates two hospitals, University of Maryland Shore Medical Center at Easton, and The University of Maryland Shore Medical Center at Chestertown, the state's first critical access hospital, recently created by the system and the state. The system also has two free-standing emergency centers, five medical pavilions, numerous inpatient and outpatient services, and urgent care centers across the mid-shore region.
In an interview with HealthLeaders, Brady shared how she hit the ground running in her new role and talked about UM Shore Regional Health's growth plans and the creation of the system's new regional medical center.
Tampa General Hospital's CEO agreed to a 10-year contract extension which will give the system stability and continuity through a time of unwavering CEO turnover.
In a move to create stability and continuity during times of high CEO turnover, Tampa General Hospital's (TGH) board of directors recently offered president and CEO John Couris a 10-year contract renewal, following six years of successful leadership.
This news came even before the American College of Healthcare Executives released its annual hospital CEO turnover report, which revealed the turnover rate of hospital CEOs stayed at 16% for the third consecutive year.
With the turnover rate not budging, the TGH board took the opportunity to nip the issue in the bud, by creating one of the only 10-year CEO contracts in healthcare, which benefits both the organization and the organization leader.
In a press release announcing the leadership move, chairman of the Tampa General board of directors, Phil Dingle, said "[John's] vision, approach to innovation, people-focused leadership style, ability to deliver financial stability and growth, and steady hand since assuming the CEO role in 2017 — including leading us through a global pandemic — gives us the utmost confidence Tampa General will continue its extraordinary progress under his leadership … We look forward to John leading the team in this exciting next chapter."
Couris will continue to lead TGH, an academic health system that operates under Florida Health Sciences Center, who is working to design and launch the organization's updated strategic plan for the next five years.
"They knew that there was a lot of turnover in the industry," Couris said of the TGH board.
In fact, there was a recent report released by Challenger, Gray, & Christmas Inc. which found that during the first six months of 2023, hospitals saw a 70% increase year over year in CEO turnover compared to the first six months of 2022.
"What they were thinking is how do we lock down a CEO that is probably at the apex of his career? How do we create consistency, continuity, and stability in the organization? How do we create as much stability for the next decade as possible, given the fact that there's a lot of movement in the industry?" he said.
This gave way to the 10-year contract agreement, which offers the organization that continuity and stability going into the next decade.
"I jumped at the chance because I'm extremely committed to what TGH and USF (the University of South Florida) [have] been creating together over the last five or six years," he added.
Couris' first line of business is to update the organization's strategic plan, which they refresh every five years, and continue leading the organization from being hospital-centric to expanding its care model and operations.
"We're no longer just the hospital; we're a network. We're going to continue to build that network and we're going to wrap around the entire network a care coordination model for our patients that is very patient centered," he said. "One of the biggest problems in healthcare is our lack of and our inability to coordinate care efficiently and effectively to drive quality up and lower cost, and create real value for the consumer. Through care coordination, we're going to continue to drive quality up, drive cost down, and pass that value onto the consumer of healthcare through innovative, collaborative partnerships. That's the future. It's not about building more hospitals—It's about doing better with what we have."
"Now it's my job with my team to continue to execute on our vision, and the vision is very simple: it's to be the safest and most innovative academic health system in America," Couris added.
Between faltering financial results, lay-offs, and rating downgrades, the odds of viability are stacked against the company.
While the financial outlook for larger, for-profit hospitals and health systems is slowly improving, there are still substantial challenges for CEOs of healthcare organizations of all sizes when moving profits from the red to the black.
Value-based primary care provider Cano Health is one example of a struggling healthcare organization. In fact, Cano is facing what Moody's says is impending bankruptcy.
Between faltering financial results, lay-offs, asset liquidation, rating downgrades, and leadership shake-ups, the odds of viability are stacked against the company.
So how did Cano get here?
Financial results spurred major changes
Cano Health recently announced its Q2 financial results for 2023, which including the organization's plan to exit operations in California, New Mexico, and Illinois by the fall of 2023. As of the end of June, those geographies accounted for approximately 5,000 total members and 17 medical centers, according to Cano Health.
The company also plans on exiting operations in Puerto Rico by 2024, which has approximately 8,000 members cared for by affiliates. This move will allow the organization "to focus on and optimize its core MA and ACO REACH assets in its core geographies," it said in a statement.
In addition, the organization is consolidating operations in Texas and Nevada, reducing the amount of medical centers in each state. The core Florida market will experience prioritize projects and initiatives to enhance patient care.
"These strategic and operational steps are critical to improving our financial performance, generating greater efficiency, and improving health outcomes for our members to ensure the organization’s long-term success," Canoe Health said.
During Q2 2023, Cano Health experienced a 25% increase in total membership to 381,066 members and a total revenue increase of 11% year over year to $766.7 million.
But the organization experienced a net loss of $270.7 million, which was a significant increase from the net loss of $14.6 million experienced the year prior.
According to Cano Health, the net loss was driven by "a higher operating loss due to lower-than-expected Medicare Risk Adjustment revenue," the organization said, resulting in MRNA revenue $58 million lower than previous estimates. Net loss was also attributed to an increase in third-party medical costs, "a change in the reserve for other assets related to MSP Recovery Class A common stock, change in fair value of warrant liabilities," and an increase in interest expenses.
With the company's liquidity at approximately $101 million on August 9, consisting of cash and cash equivalents, Cano believes that this amount of liquidity is not sufficient to cover its operating, investing, and financing uses for the next 12 months. "Management has concluded that there is substantial doubt about the company's ability to continue as a going concern within one year," Canoe said in a statement.
Company downgrades and layoffs
Subsequently, Moody's downgraded Cano Health's corporate family rating from Caa3 to Ca, and it upgraded its probability of default rating from caa3-PD to Ca-PD. Moody's has also forecasted that Cano will continue to have negative free cash flow.
"The ratings downgrade reflects Moody's view that Cano's capital structure is unsustainable, that the probability of a bankruptcy or major restructuring is high, and that recovery rates for much of the company's debt will be low," the investors service said in a statement.
Moody’s went on to say that Cano’s ongoing decline in profitability, weak liquidity, and Moody's expectation that operating performance will continue to deteriorate given the higher costs and rising interest rates.
The ratings downgrade by Moody’s followed Cano's announcement that the operational challenges anticipated in 2023 and the current liquidity situation is not expected to cover operating, investing, and financing needs for the next 12 months.
In response to the poor financials, the organization reduced its workforce by 17%, which resulted in letting go of 700 employees. This move is expected to yield approximately $50 million annualized cost reductions beginning in Q3 2023 through the end of 2024, according to Cano Health.
Additionally, the organization "expects to record a restructuring charge in the third quarter of 2023 of approximately $4 million, the majority of which will be paid in 2023 and a lesser amount in 2024, consisting primarily of employee-related costs, such as severance, retention and other contractual termination benefits."
Leadership update
Not even two weeks following the financial results announcement, Cano Health announced that Mark Kent, who joined the organization to serve as chief strategy officer in January and who has served as interim CEO since June 16, is now the organization's permanent CEO.
"Cano Health is evaluating strategic interest in the company to ensure we continue caring for our patients, while maximizing value for our stakeholders," Kent said in a statement about the organization's financial results.
"Our mission and vision remain the same, however, the strategy and tactics needed to realize the profitability inherent therein requires a refreshed approach with a solid operating foundation. Cano Health took critical strategic steps during the second quarter of 2023 that are intended to accelerate our strategy to enhance operational efficiency and execute on the plan to improve the management of our medical costs."
At this point, it’s unclear what the future holds for the struggling organization. No investor could mean bankruptcy.
Innovation is a must when addressing evolving healthcare workforce needs.
Between the labor shortages, diminished margins, accelerating competition, and even leadership vacancies, there’s a perfect storm of workforce factors pressing healthcare CEOs. CEOs need to employ meticulous strategies to rein in costs while creatively thinking about building a sustainable workforce.
Innovation is key for CEOs while they continue to work closely with their executive team to address these seemingly endless challenges, because if they don't, they will only fall behind the competition.
Here are four ways CEOs successfully address workforce challenges at their organizations.
Roxanna Gapstur, PhD, RN, president and CEO of WellSpan Health, a nonprofit integrated health system serving central Pennsylvania and northern Maryland, shared with Healthleaders earlier this year the reality of workforce shortages that have swept across the country.
"In Pennsylvania, we lost about 230,000 [workers] during the pandemic," she said. This, coupled with women returning at a lower rate than men to the workforce, has resulted in a million women missing from the labor force, Gapstur said.
"It's not just nursing that we're seeing shortages in—we're seeing shortages across job categories. Part of it [also] accelerated retirements. We've seen our retirements nearly double here at WellSpan."
"Like many health systems, we've been challenged to ensure that we have the right skillset with the right role throughout our system," she added. "We offer a full continuum of care, and we have had times where we've had to downsize or close a location periodically throughout the pandemic because of staffing."
When it comes to solving workforce challenges, hospitals and health systems must be even more creative in the current competitive landscape.
"It's definitely a multi-pronged approach," Gapstur said.
"We've partnered with [more than 20 high schools, colleges, and universities] across our geography. We have specific health sciences programs that we underwrite and support both financially and with clinical preceptors and with faculty. We use several different venues and vehicles for those partnerships, as well as having our own medical education program here at WellSpan, where we have more than 180 in residency who are training with us."
They've even brought education in-house.
"We've also started our own educational programs here at WellSpan," she adds. "This fall, we're starting a surgical technologist program in addition to the multiple programs we already had, which was medical assistant, CRNA, respiratory therapy. We already had those programs in place when the pandemic began; we're now adding additional ones and we're expanding the slots in the ones that we already have."
These initiatives will help to fill needed roles and successfully train the workforce.
Eric Dickson, MD, MHCM, president and CEO of UMass Memorial Health, a $3.3 billion nonprofit health system in central Massachusetts, recently shared an initiative that has enabled him to learn the wants and needs directly from his organization's frontline staff.
"One of the things that I established as CEO on day one was an idea system that engaged our frontline workforce and asked them how we can improve," he said.
"Over the 10 years that I've been CEO, we've implemented over 100,000 ideas from the frontline workforce. These are things to make care safer for our patients, caregiving safer for our caregivers, ways to enhance the patient experience, [and] ways to enhance the caregiver experience here."
By taking these ideas and putting them into action, it shows the organizations embraces innovation, and that it continues to find better ways to support clinical workers. This can help with staff retention and recruitment and create a culture of innovation across the organization.
Michael A. Slubowski, president and CEO of Trinity Health, spoke with HealthLeaders earlier this year about the future of healthcare delivery and payer models.
To stay ahead, the system implemented an internal staffing agency.
"Before the pandemic, we created our own internal staffing agency called First Choice, so that colleagues who decide to leave the profession full-time or part-time have an option to work on their terms and what works for them," he said. "Creating flexibility for people and providing an opportunity for them to earn some income has been an important vehicle for us."
This saves the business money, as staffing agencies have recently bled hospitals and health systems dry. It also helped with staff retention.
The organization also created a specialized triad care team to better serve patients and the organization's clinical workforce, which was starting to be rolled out earlier this year.
"It's a three-person care team; it includes a floor nurse, it includes either a CNA or LPN, and then the third member of the team is a nurse that is in a hub that can [virtually] support the patient's care needs," he said.
"Those three people function together as one team for a set of patients. The floor nurses, who are generally new grads, feel supported because there's an experienced nurse at the health hub that is supporting the care and working as part of their team. We've been able to keep nurses who otherwise would have left the profession, either because the work is too much for them given physical demands, or flexibility, who still want to provide care."
Virtual nurses work in hubs across the organization's campuses. They can "beam" into any room, they have full access to the patient's medical record, and they can even observe the patients through a camera.
"The nurse assistant or LPN can practice at the top of their license as well," he said. "It's helping us with the retention of new nurses and keeping experienced nurses in the workforce."
And the patients and families love it as well, he said. When they push a call light, someone immediately comes on screen and can attend to the patient, help coordinate care, and do discharge planning, saving the patient and the nurse valuable time.
"Patient satisfaction is very high with this model. It's one of those transformational things that can help us with staffing as well as patient satisfaction," he said.
Tiffany Miller, DBA, MHA, is the CEO of Yoakum Community Hospital in Yoakum, Texas. The 100-year-old, 23-bed critical access hospital faces additional challenges in recruitment, being in a rural part of the state.
The biggest pain point for the hospital is competitors’ extremely high salary rates. High rates make it hard to compete with larger institutions that are in closer proximity or contract travel jobs.
"One of the biggest focus areas for Yoakum is the recruitment and retention of qualified staff," Miller said. "That starts with the culture of our hospital, especially given the current environment of higher labor costs. It's about creating an environment where people not only want to be, but they also want to stay."
Leaders can drive this environment shift and create a culture that not only retains staff but keeps them happy in a role they are passionate about.
"As a leader, I believe it's important to be transparent with your team and being able to make that connection—that purpose—and help bridge that gap between action and the why behind it," Miller said. "I've [had] those conversations with team members to help make the connection that underscores that importance of fiscal stewardship and being able to get creative on [creating] an environment where people want to work and that they want to stay."
_2.png){kind=logo}
.jpg?itok=yrqX7JEG)
