John Mordach has more than 30 years of healthcare financial management experience to call on as senior vice president and CFO of Chicago-based Rush University System for Health.
He was named CFO of the medical center in 2011 and became system CFO six years later.
Before joining Rush, he was senior vice president, CFO and treasurer of Maywood, Ill.-based Loyola University Health System.
And he held executive leadership roles at Edward Hospital and Health Services in Naperville, Ill., University of Chicago Hospitals and Health System and Boston-based Tufts Medical Center.
Mr. Mordach told Becker's Hospital Review he's excited about Rush's investments and partnerships this year, including a revenue cycle partnership with R1 RCM and a 10-story, $450 million outpatient care center under construction. He shared top priorities for 2020, discussed the R1 partnership and offered some advice for other hospital CFOs.
Editor's note: Responses were lightly edited for length and clarity.
Question: What has you most excited about the CFO role in 2020?
John Mordach: I'm excited about the strategic investments and partnerships that we have in the works or that we have announced, including R1. In addition to R1, we also are building next to our tower on Ashland Avenue a new ambulatory building. It is planned to be a destination cancer site for the city of Chicago, of which we believe there are none, and we believe the city and communities we serve deserve. It also will be a showcase for our neurosciences clinical care. That is planned to open in 2022.
In addition to that, I'm enthused about the financial strength and the clinical strength of the organization. We are ranked No. 1 for quality in the nation by healthcare performance improvement company Vizient, [among 93 U.S. academic medical centers]. We are [also] very strong financially [based on credit ratings]. We are going to the financial markets in March to issue debt related to the new ambulatory building of roughly $250 million to $275 million.
Q: What are a few of your top priorities for this year at Rush?
JM: I'm excited about the continued work here we do in terms of the unwavering commitment to the communities we serve. We are a founding member of the West Side United initiative. Part of the initiatives include social impact investing where we're helping with some startup funding to improve the socioeconomic environment for the west side of Chicago. Another top priority is growing the system, including the acceleration of growth in our ambulatory sites and settings. We recently opened our new Rush Oak Park emergency department in October 2019. In the past year, we opened on Michigan Avenue our 50,000 square-foot ambulatory building and also a 100,000 square-foot joint venture orthopedics destination site with our partners Midwest Orthopaedics. We've accelerated the investments we're making on the ambulatory side knowing that there is a fast-paced conversion going on from the traditional inpatient settings to ambulatory settings, and having locations closer to our patients so it improves their access and lowers their cost of care.
Q: What is the greatest challenge facing hospital CFOs today?
JM: The pace of change has accelerated, and with that creates challenges but also opportunities. In my nine years here, Rush has been great at converting challenges into opportunities very quickly. A lot of the change is being driven by payers, and Chicago is a unique market compared to other major metropolitan markets. We are also experiencing increased change of procedures that used to get paid or considered inpatient procedures moving much more to the ambulatory and outpatient settings.
I would also say another key challenge is increased competition. What we're facing are not just traditional competitors — not just the hospitals and health systems — but new entrants in the market. You see a lot of ambulatory settings popping up that are not just hospitals. There are also large physician groups as alternatives to traditional care.
Q: What's one relatively simple change you made that resulted in cost savings in the past year?
JM: In December 2018, we put in place an early retirement program, and we offered to a select group of employees who qualified an enhanced retirement benefits package and a separation payment. We had over 400 employees accept the offer, and with that came our estimate of annual savings to salary and wages of $7 million annually. An early retirement program also provides growth opportunities for other managers to move into these positions.
Q: R1 and Rush recently announced they will collaborate to launch an innovation lab. What will this entail and what is the objective behind it?
JM: Part of it is the pace of change. It has to do with advanced analytics, and it's going to be surrounding things like population health and value-based care. These are already in existence in the market and nationally, but not probably to the degree they're going to be. I'm excited about this because it's going to be a partnership with a strong organization. This will inform our clinicians about what's coming [in terms of value-based care and population health], and our management teams. It will also be something I think of a competitive advantage for Rush, and from a strategic standpoint for R1 something they can utilize with their other clients.
Q: If you could pass along a piece of advice to other hospital CFOs, what would it be?
JM: Our roles are to be the best stewards for the institutions we work for and the communities we serve. As part of that, I think all hospital executives can never lose sight that really at the core of our mission is patients. If we make our decisions surrounding what's best for our patients, we'll always win. Rush University Health System is not a holding company, it's a healing company.
More articles on healthcare finance:
20 employees furloughed at bankrupt West Virginia hospital
Steward Health Care late paying property taxes in Utah
Dana-Farber Cancer Institute gets $16.5M gift