As hospital margins remain a mixed bag, Sioux Falls, S.D.-based Sanford Health CFO Scott Wooten encouraged other healthcare leaders to make hard decisions as early as possible to help improve their margins.
"So many times, we don't do the hard things first and so we continue to have challenging times," Mr. Wooten told Becker's. "You have to get ahead and stay ahead and tackle the tough issues."
The health system reported an operating income of $402.2 million (5.6% margin) in 2023, more than doubling the $192.3 million it posted in 2022.
Sanford Health comprises 46 medical centers, 222 clinic locations, 44,000 employees, and 2,827 physicians.
Labor shortages and rising healthcare cost pressures have hit the upper Midwest and rural healthcare areas hard, but Sanford worked hard to pull itself out of a post-pandemic situation.
"Those financial downward pressures were certainly significant," he said. "We really went at it from a streamlining of work activity and went through our entire cost structure and we revamped the organization to be able to adjust to the new cost structure which is the new norm for healthcare."
While more hospitals and health systems are dropping commercial Medicare Advantage contracts, the Sanford Health Plan has its own Medicare Advantage health plan that is focused on working out the unpopular kinks.
"From a Sanford perspective, we're bullish on MA," Mr. Wooten said. "We are creating an integrated model in the care delivery site with our own MA plan to address many of those issues that we're simply not able to address with the other MA insurers."
Regardless of its unfavorability, the national number of aging Americans points to Medicare Advantage not going away, Mr. Wooten said.
"It has a high growth curve in the future, regardless of the supply side's push back."
The largest rural health system in the U.S., Sanford is also laser focused on expanding healthcare access in rural areas and is investing heavily in digital tools, artificial intelligence and virtual care.
"We just did a landmark $350 million virtual care initiative," Mr. Wooten said. "We are going to be dramatically expanding access to care through virtual care as well, both in primary and in all specialty areas."
Along with virtual care initiatives, Mr. Wooten stressed the importance of investing in more relationship-based healthcare.
"Helping individuals manage their health, their health risks and being whole, that I think is the critical aspect of healthcare," he said.