2020 has been a year filled with risks and surprises for the healthcare industry. Despite those risks, hospital and health system CFOs have navigated them successfully.
The surprises finance chiefs navigated amid the pandemic was one topic discussed during a session at the Becker's Healthcare CEO + CFO Virtual Forum Aug. 11.
The panel included four healthcare finance chiefs, including:
- Britton Tabor, executive vice president, CFO and treasurer at Erlanger Health System (Chattanooga, Tenn.)
- Douglas Watson, CFO of Dignity Health (Phoenix)
- Divya Matai, CFO of Northwest Texas Healthcare System (Amarillo, Texas.)
- Shelly Schorer, CFO of CommonSpirit Health's Northern California division
Their responses have been edited for clarity. To view the full session on-demand, click here.
Question: What has been the greatest risk or surprise you navigated as CFO of your organization related to the COVID-19 pandemic?
Doug Watson: Probably the biggest surprise is, we spend a tremendous amount of time planning for disasters, planning for all the things that we think could happen. When this really started, we faced things that we hadn't really thought we would have to deal with. We're part of a large health system. So if we get short of something in a disaster, usually you can have another part of the system send you more of whatever that is. But what happened was everyone was short of things. One of the things that I thought was both rewarding, but also really challenging, is to accept the fact that you have to think differently and solve the problem. If you try to follow the normal policy and say, 'Well, we'll just order more and see if they come,' you're going to be in a world of trouble. We had to think differently, and thankfully, we had folks that were able to get creative fairly quickly. The biggest lesson is to not wait around trying to solve it.
Divya Matai: One challenge for us was how quickly we started to lose volume in mid to late March. We had to quickly flex our staff based on that volume, had to curtail some of the expenses to be able to still have a margin. We had to quickly adapt. Then at the same time, we had to quickly innovate, because there were incident command centers established at the corporate level. Fortunately, we were not one of the hot spots, and we were getting information from our sister facilities in the other market. Corporate also put together an incident command center. So we were able to get some of the guidance from them. One example [of innovation] is telehealth services. Even though we saw the volume drop in our emergency room, and the state of Texas mandated stopping elective cases, our physicians were still able to see the patients. Those challenges and being able to adopt and still be able to manage the day-to-day operations was challenging and at the same time, surprising.
Britt Tabor: From a public hospital standpoint, we don't have the strong balance sheet that some of the for-profits have. We were surprised about not only the electives dropping, but also that heart attack, stroke and emergency room visits dropped as well. We literally had a hospital that was very empty. We had to act very quickly regarding staffing, furloughs and overtime. We also even got to the issue of having to curtail some of the benefits, PTO, and retirement matching. Being a public hospital, all of these decisions are highly critiqued by the public. We are the No. 1 employer in the region with over 7,000 employees. So you can imagine the criticism. But we had to do that for the sustainability of our mission.
Shelly Schorer: We did face some of the same challenges. But we also had testing and lab issues. We have had so many tests, especially bringing elective surgeries back, trying to pretest patients. As a result we are running into lab turnaround time issues and capacity issues. That's been one unique challenge I think that we didn't foresee. The entire nation is dealing with the same thing, but it's trying to figure out how we can navigate testing, who gets tested and how to reserve those resources.