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4-Pillar Culture and 3-Legged Stool: Sanford's New CFO Gets Real on What it Takes to Build a 'Premier Rural Health System'

Analysis  |  By Delaney Rebernik  
   June 20, 2024

Sweeping across 250,000 square miles, Sanford Health has a big footprint, and CFO Nick Olson has even bigger insights to share on how systems of all stripes can achieve financial success without sacrificing quality.

For all the ground they cover, rural health providers sometimes get short shrift when it comes to coverage of healthcare innovation.

"We have over 250,000 square miles of geography that our footprint covers," says Nick Olson, executive vice president and chief financial officer at Sanford Health, a nonprofit organization based in Sioux Falls, South Dakota.

Sanford is the largest rural health system in the U.S., with 48 medical centers across South Dakota, North Dakota, and Minnesota, and hundreds of additional care locations throughout the country.

All that reach comes with its own set of challenges—and opportunities for expansive thinking that can benefit healthcare leadership writ large.

"We are really intentional about becoming the premier rural health system, so how do we do that?" Olson asks. "It's about always putting the patient at the center of every decision. And that's both an easy thing to say and do, and also a very complicated thing to say and do."

Ahead, Olson, who stepped into his CFO role in April after five years serving the system in financial VP roles, shares his strategies for balancing a big footprint with even bigger ambitions. Hint: Aside from financial acumen, it takes a heart—and smarts—for people.

Get your priorities straight

Sanford is facing a host of familiar headwinds, from high interest rates and capital cost to looming workforce shortages.

To quell them, Olson says it's all about building a culture where quality, patient experience, and employee experience are valued as much as financial performance.

"These things don't have to be mutually exclusive," Olson explains. "When there's a constant drum beat of each of those four areas being important … that's when we start to see real traction in all areas."

Straddle a 'three-legged stool'

On the financial front, Olson is prioritizing strategic investments and growth.

"The more integrated we are, the more durable we, as an organization, can be to combat things like the pandemic that was in 2020, and the economic crisis that was in 2022, and there will be something else in the future," he says. "This means we have to look proactively at the right opportunities that could strategically advance this organization."

He points to Sanford's historic successes with strategic partnerships, like the 2019 merger with Good Samaritan Society, a nationwide senior care service provider.  

It's a well-timed focus. The opportunity to join forces is the ripest it's been in years for nonprofit healthcare providers on both sides of a transaction, says Rex Burgdorfer, a Chicago-based partner at Juniper Advisory, which counsels not-for-profit healthcare providers pursuing mergers, acquisitions, and other partnership plays.  

As we emerge from the pandemic's peak, "our clients now are much larger, much stronger, and more forward-thinking in terms of why they're joining a system, and it's caused the average size of transactions to go up significantly," Burgdorfer explains. "There's more creativity in the ways in which they're combining structurally because they're more financially sound."

When it comes to strategic investments, Olson uses a "three-legged stool" to guide prioritization and decision making:

  • Care delivery and financing is "first and foremost" to ensure Sanford's clinicians can see patients each and every day and that its health plan can provide insurance to its nearly 200,000 members.

  • Philanthropy, from both Sanford's namesake benefactor and the broader community, is another crucial piece of the puzzle. "This is really an important tool for us to continue to invest in critical technology, critical services," Olson says. "It's really been a great community engagement tool for us, as well."

  • Investment return on reserves is also among Olson's priorities in his early days as CFO. He sees this focus as critical "to help ensure long-term financial sustainability for Sanford and for others as well, and really provide a means for us to deliver on our promise to provide access to high-quality care no matter a patient's zip code."

It's about keeping the endgame in mind.

"Operational and financial discipline is in our DNA," Olson says. "We set targets, we hold each other accountable, we execute against our plans, and when our plans are successful, we hit those targets. It allows us to expand access for patients and allows us to invest into new services, and those are things that everybody can rally behind."

Invest in virtual care

For the past few years, Sanford has been busy building a $350M virtual care center in Sioux Falls.

"I believe that will fundamentally transform how we deliver care in our communities," Olson says. "[It] allows patients to be seen without having to travel to a medical center that might be 100 or 200 miles away."

It'll also help sustain the system as workforce pressures intensify over the coming decade. Recent projections show that the U.S. could face a shortage of up to 86,000 physicians by 2036 and 25% fewer rural physicians by 2030.

"It's a real challenge when a hospital in a rural setting wants to recruit a provider, to lure that provider away from the big city system," Burgdorfer says. "So competing for recruiting talent is a major trend."

It's a big part of why telehealth is so central to Sanford's strategy.

"Having a virtual care center is going to combat those economics and those stats by allowing us … to recruit physicians to a more urban area," Olson explains. "So you'll still be able to provide the same type of quality care across the rural footprint that we have."

It's another timely play, as industry groups petition lawmakers to extend and expand key telehealth regulations that gained popularity during the height of the pandemic and stand to shape virtual care for the foreseeable future.

Although Sanford is squaring up against some formidable workforce challenges, Olson doesn't anticipate that the Federal Trade Commission's buzzy non-compete ban will be chief among them.  

"We're certainly continuing to monitor those facts and those rulings, but at this point, we still feel really confident with the virtual care strategy well into the future," he explains.

Nonprofits like Sanford, which make up more than three-quarters of the nation's healthcare systems, are exempt from the non-compete ban, though things may get dicier for organizations that generate revenue for for-profit institutions.   

Act as 'a true operating system'

Sanford's vast expanse means it's essential to have both a unified vision and a flexible approach to execution so every region is empowered to act.

"We'd like to give … the right level of local autonomy for the leadership in each of those communities because those are the ones that know certainly the patients, but the communities and the stakeholders in those communities," Olson explains. "They need to be able to have that autonomy to make decisions at a local level."

That way, enterprise leadership can help radiate locally grown insights across the organization. "If there's a good idea in Bemidji, Minnesota, we can implement that over in Bismarck, North Dakota, as well," Olson explains.  

On the purpose front, CEO Bill Gassen and his administrative team make frequent trips to individual sites and convene the enterprise in regular virtual conversations to ensure a shared message sticks.

That message, Olson says, is simple but powerful: "We're in the business of providing world-class healthcare. Why we exist will never change. But how we deliver care needs to continue to evolve. So that we can not only provide the highest quality care but continue to be sustainable and viable for the next generations that come after us."

Delaney Rebernik is a freelance editor for HealthLeaders.


Nick Olson assumed Sanford Health's CFO mantle in April after five years of serving the system in financial VP roles.

Olson's early days center strategic growth and investments, including advancing a $350M virtual care play.

He's also committed to reinforcing a culture that gives equal weight to financial performance, quality, patient care, and employee experience.

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