Franciscan Missionaries of Our Lady Health System, a 10-hospital system headquartered in Baton Rouge, La., achieved a $241 million turnaround in fiscal year 2024 under the leadership of CFO Mike Gleason, who told Becker's the feat was "a total team effort."
By reimagining operational strategies, shifting from a holding company to an operating company model, and fostering a culture of innovation and collaboration, the 10-hospital system not only stabilized its finances but positioned itself for sustained growth.
Mr. Gleason joined the Becker's Healthcare podcast to discuss the strategies that turned a financial crisis into an opportunity for sustainable growth and strengthened the health system's ability to reinvest in its people and future.
Editor's note: This is an excerpt from the Becker's Healthcare podcast. Responses were lightly edited for clarity and length.
Question: What were the keys to achieving a $240 million financial turnaround for the health system in fiscal year 2024?
Mike Gleason: While I would never describe healthcare as a stable industry, it's certainly much more stable today than it was during the last three to four years of the pandemic and its aftermath. Like most health systems, we faced significant challenges during that period, including significant operating losses. However, we did an excellent job of maintaining overall balance sheet strength to weather the storm by being very careful with how we deployed our resources. Thankfully, we've been able to rebound, return to profitability, and reinvest in our organization.
This is a team sport; none of this was achieved by me individually. Many initiatives were already in motion when I joined this organization just under two years ago, but we came together and focused on several key areas. One major effort was reducing premium and contract labor through various initiatives, including flexible work plans and innovative, quasi-contract-like labor models within our organization — beyond traditional frameworks that we've seen in the past. As a result, we’ve driven our turnover rates to historic lows. Our voluntary turnover rate is just above 11% on a trailing 12-month basis, and our total RN turnover rate is about 16%. These are great numbers that reflect a culture and work environment where employees feel safe, valued, and appreciated. That, in turn, has helped us manage patient flow, documentation and other critical operational aspects.
We've also seen remarkable improvements in throughput. Clinical documentation, for instance, is absolutely critical — not just for quality reporting but also for reimbursement. We never want to get paid a penny more than we're due, nor a penny less. Enhancing clinical documentation has been a key part of that effort. Another important transformation has been our shift from a holding company to an operating company. We mined all our markets for best practices and then deployed those best practices across our entire organization to create a system-wide environment that allows us to implement changes more quickly and efficiently. Ultimately, this has been a total team effort. I couldn't be prouder of this organization and how everyone has come together to put us in a strong position — one where we can reinvest in our organization and, most importantly, in our people.
Q: What prompted the transition from a holding company to an operating company model, and how has that switch benefitted the health system more broadly?
MG: Never waste a good crisis. When you're losing money, you can't just keep doing the same thing and expect different results. It created a sort of burning platform for us to accelerate change. I believe previous leadership had intended to continue moving from a holding company to an operating company model. When I joined [in April 2023], along with some of my other executive leaders, we accelerated that process — more out of necessity than anything else.
One effective approach we took was ensuring that when we identified best practices in one market, other markets had a choice. If a market resisted adopting that system model for a specific initiative, they could either demonstrate that their approach could achieve the same results or they would adopt the system’s best practice.
This flexibility allowed markets to propose and implement their own improvements if they could show comparable outcomes. In some cases, we even integrated these alternative approaches into the system-wide model, creating an even stronger hybrid of best practices. However, in most cases, individual markets could not on their own basis find individual ways to approach throughput, documentation, etc., that were better than what we had developed for the system as a whole. This approach has significantly advanced our shift to an operating company model. I think it will make us more agile and better prepared to adapt to the uncertainties and industry changes we expect over the next three to five years.