Insights 01/19/2021

5 Questions For A Leader in Healthcare Finance

Loop Capital speaks with Dominic J. Nakis, Chief Financial Officer at Advocate Aurora Health, on the current state of the healthcare system.

What is your number 1 concern as we move into 2021?

Getting COVID-19 vaccines into as many arms as possible and taking care of our workforce are at the top of the list right now. Though a financial officer, all of us are concerned about how the pandemic has strained our team members. They are resilient and doing heroic work. We’re proud of them and here to support them.

Cost-saving – Where have you spent most of your time/energy?

The pandemic has pressured our operations due to lower revenue as patient activity has declined while we have experienced of increased costs for supplies like personal protection equipment and wages. We have worked hard to take care of our staff, even adding people to make sure we keep our team members and patients stay safe. We have certainly reduced the costs of corporate functions, certain non-clinical support operations and office real estate costs. During 2020 additionally we cut capital spending.

What broad category of investment in your system has the most impact moving forward?

The investing we have done in technology is going to pay off long-term. The pandemic pushed us to make fast progress on our electronic health record system, our LiveWell app and the use of virtual visits. I do not see that progress going backward as our patients get used to these new ways of accessing health care services. We will also continue to build out our ambulatory footprint. The pandemic has enabled us to create our Hospital at Home Service (significantly expanding chronic care management delivered in the home) and expand behavioral health services access via delivering individual and group therapies and outpatient partial hospitalization all virtually.

How is your system being creative/innovative in a highly regulated/restrictive environment?

We are trying to expand our focus beyond what are caregivers currently do so well in taking care of patient’s illnesses and diseases. Our goal is to become a destination health care company that helps people live well. We want to invest in the health of the whole person and are thinking about everyone’s individual needs. Whether it involves parenting, aging or nutrition, how we might help them take care of themselves from a holistic viewpoint.

How long will the COVID-19 pandemic be a material influencer of your business?

I believe it will impact our business on a long term basis – beyond 5 years. We have learned clinical lessons that will be used going forward. The pandemic has changed the we manage. We have narrowed our organizational priorities, learned we can make better and faster decisions when we get players from all the relevant functions working together to solve the problem. We have reduced the number of standing committees and use more narrowly focused teams to solve problems and design innovative solutions. As we expand our ambulatory footprint we are also reviewing the scope and size of such facilities by factoring in how much of the projected demand can be handled virtually – reducing the ambulatory square footage on a per patient or per member basis. The pandemic has changed how we will organize and locate a significant portion of our workforce – we have moved a to our team members working on a remote basis moving forward. This pandemic will not soon be forgotten and our business and management processes will reflect that.