Lewes, Del.-based Beebe Healthcare CFO Ryan Kennedy has been with the health system for a little more than two months, but is already working on big financial plans for the health system in 2025.
Beebe reported a -6% margin for the 12 months ended June 30, 2023, and a 0.25% margin for the 12 months ended June 30, 2024, according to financial reports. The health system is now aiming to hit a 2% operating margin in 2025.
"We're going to continue the cost containment initiatives that we kicked out to vastly improve operations from how we ended fiscal year 2023 to how we ended fiscal year 2024, which is quite a significant turnaround," Mr. Kennedy told Becker's.
Mr. Kennedy said one of the biggest challenges for the health system has been adjusting to the rapidly growing Sussex County (Del.) population due to people relocating to the area post-COVID. The growth has led to an increased need to meet healthcare demand and recruit providers.
Prior to Mr. Kennedy joined Beebe, its human resources and talent acquisition teams implemented an applicant tracking system, redesigned the health system's career website and developed the health system's first employer value proposition.
These efforts helped reduce Beebe's vacancy rate to 7.5%. The health system also was able to reduce its traveling nurse contracts 62%.
"You have to engage leadership, and when I say leadership, you need to include management directors all the way up to senior executives," Mr. Kennedy said. "Everybody needs to be rolling in the same direction and have a focused effort [to] not take the easy way [out] and call the agency person in to work a shift. Get HR engaged to get out there and find qualified recruits."
Beebe has its own nursing school, which is a tool that Mr. Kennedy said can help organizations grow their own employees to address workforce challenges. It also has opened up multiple community centers across Sussex County to meet care demand.
To support the area growth, the health system is implementing Epic late next year. Beebe currently uses around seven different EHR systems across the organization.
"Epic is truly, in my opinion, the most important thing we can do to improve the quality and access of care to the people who live here in Sussex County," David Tam, MD, CEO of Beebe told Becker's on Oct. 14. "It's just as important as a new building."
Implementing Epic is another reason that Mr. Kennedy is working to ensure a positive operating margin that can support the transition and help with other growth initiatives.
For hospital and health system leaders looking to improve their margins, Mr. Kennedy said it starts with getting department leaders reengaged with the budget process. At Beebe, the health system established departmental accountability reviews to re-engage leaders, many of whom came into their positions post-COVID.
"It was making them think about running their own business," he said. "More understanding of revenue, how we get paid as healthcare providers, what the expense levers that we can pull are, and that has paid off."