The devastating effects of the COVID-19 pandemic have hospital executives planning for the next crisis. Hospital CFOs told Becker's that they are focusing on improving their balance sheets and re-evaluating their supply chain exposure to prepare for the next unforeseen event.
Here's what three hospital CFOs told Becker's about preparing for another pandemic:
Anthony Saul. CFO of Grady Health System (Atlanta): We have all looked in the mirror at ourselves since the COVID-19 pandemic and questioned the principles we thought were foundational. It is paramount at Grady or any organization of our size, that we have a healthy balance sheet. That allows us to weather the storm but also make investments that can help mitigate some of the challenges any such future pandemics may present.
Right now, Grady is enjoying the strongest liquidity position we have had in decades. We are in a healthy position, but we are investing more than we have in decades. When I look at a 10-year horizon from 2020 to 2030, our plan is to invest over a billion dollars.
We look at additional business aspects such as what we do differently in our supply chain, to be ready for such events. So it is really about preparing for the unexpected and Grady thrives in the middle of chaos.
Brett Tande. CFO of Scripps Health (San Diego): Under [CEO Chris Van Gorder's] leadership as well as that of our board and my predecessor, Rich Rothberger, Scripps has been able to develop a fortresslike balance sheet that was central to Scripps Health entering the pandemic with a durable balance sheet that enabled us to focus on taking care of San Diego.
We intend to maintain that financial strength as the bedrock upon which Scripps can meet its mission. The weakness in industry economics affects many, and the unfunded mandates in California exacerbates that pain, but I am impressed by the resilience and determination of the Scripps Health team and I have confidence that a continuation of our strategic and tactical efforts will ensure that Scripps Health, its patients and our employees thrive.
Michael Allen. CFO of OSF HealthCare (Peoria, Ill.): To look at the resilience of the healthcare business side of a system, we started manufacturing some of our own PPE. We looked at redundancy in our supply chain and made sure that we had options and became more self-sufficient. We learned that maybe not in all situations do we want the lowest price, because if they're coming from China, that'll get disrupted really easily. We learned it might be better to have domestic delivery options closer to home.
We also saw the labor dislocation that happened not so much due to the virus. It was because people started making life decisions differently when we all started seeing life look differently. People were working remotely, changing locations, changing jobs and retiring. Those decisions all at once totally disrupted our labor market. Then, it started putting pressure on smaller hospitals.
It changes all those economics and then, as a health system, we're saying, where can we deliver care? Where can we not deliver care? Well, where can we improve providers? As the CFO, I remind the organization we have lots of abundance of resources, that they're finite, and there's only so much to go around and we have to make the best use of one.