Brenda McCormick, MBA, who was named to the role in August, details the unique challenges and opportunities associated with leading a children's hospital.
Prior to being appointed as chief financial officer (CFO) of Children's Minnesota, a Minneapolis-based children's hospital, Brenda McCormick, MBA, largely worked for multinational corporate firms.
McCormick's background is in consumer products and software, including roles at the Coca Cola Company and helming the controller position at Valspar Co. Her most recent role before leading the financial operations at Children's Minnesota was as CFO of Smiths Medical Inc., a Minneapolis-based medical device company.
McCormick told HealthLeaders that her time at Smiths increased her focus on patient outcomes and excited her about the possibility of continuing that mission at Children's Minnesota, a 414-staffed beds with $1.7 billion in total patient revenue last year, according to the American Hospital Directory.
This transcript has been lightly edited for brevity and clarity.
HealthLeaders: Can you describe some of the challenges that come with leading a children's hospital?
McCormick: The biggest challenge for us is the rising cost of care.
We don't have the competing priorities of a whole spectrum of age groups, as we're focused on the kids. I think that is an advantage, but we also aren't a huge healthcare conglomerate, so we have to be specific about how we invest our dollars and make sure we continue to be relevant in the future.
A lot of the challenges that we face with children's hospitals are similar to what you're going to see in any healthcare system. We're seeing a rise in healthcare consumerism. The thing that's interesting about pediatrics that might be a slight differentiation from an adult system is, [those organizations] are seeing a lot of population growth as people are aging.
We're seeing a lot of parents in the millennial age group and they're focused on digital and what they expect from us is framed from how they see the world. It does challenge us to be even better in some of the virtual care entities.
HL: What are your plans to keep the organization on the frontline of adopting virtual technology solutions?
McCormick: We've recently gotten into [virtual care] and we see it as a huge opportunity for us to continue to expand and improve the patient experience in the future. When [Children's] first got into [virtual care] in 2015, it was a need that we saw in our community hospitals with emergency rooms. We were getting a lot of calls as they were seeing kids and they had a lot of questions. What we did was create a virtual care physician-to-physician consult with those emergency rooms so that they would have a second opinion or resource that they can connect with.
That's led into some great initiatives that we have here at Children's; we expanded into a more patient-to-physician model. After that initial consult, rather than having the patient drive to the office, they can [meet with the doctor] virtually. We've [also] done a couple of pilots, like the one with the St. Paul School District on pediatric asthma. That was a virtual care program with the hospital and the nurses. We received some great feedback on that program from families who received care.
The [pilot] that we're excited about is a children's neonatal virtual care program that we just launched in 2018. [Children's Minnesota] partners with these rural hospitals to provide consultation on post-delivery or acute care services because we see a lot of things here at the Children's Hospital that they don't encounter often in the rural hospitals. We want to make sure that they get the care that they need. We act as an extra set of eyes for them to drive better outcomes and then if the baby does need to be transferred to the children's neonatal intensive care unit, we can get the transport set up simultaneously while they're on the call.
HL: How do you balance your focus with the shift to value-based care while still operating in a fee-for-service environment?
McCormick: It's so dynamic right now with how that's changing. I think the shift here is a bit slower than you might see with an adult hospital and that's because although kids are a third of the population, they only make up 12% of the healthcare spend. It hasn't necessarily been the focus for some of our payers.
We recognize that this is going to be the wave of where we need to go, and we want to be part of that solution and work toward creating quality outcomes. What we've done recently is establish a chief value officer position. Her group and the finance team work quite closely together because we're looking at where could we reduce waste, improve quality, and optimize all new delivery models along with our revenue. It's been a great addition for our hospital.
We are about 45% Medicaid patients and our state Medicaid program put a total-cost-of-care measure in about six years ago, so we have been working with them on that. In addition to our fee-for-service [business], we do have quality measures that we negotiate and work with our [commercial] payers on.
HL: What short-term changes should we expect to see at Children's?
McCormick: One thing I think we're going to see is more partnering and collaborating. I see it already just looking at our own stakeholders in our healthcare system: patients, health plans, employers, and suppliers. [The question is:] How can we glean information from them and work from a partnership perspective to improve the overall care and get to this more value-based system?
And then, also, I think we're going to see more collaboration with outside players because everybody's challenging the status quo. We'll see more data analytics as part of care, artificial intelligence, genomics, or virtual reality. I think there's a lot of different ways that we're going to be impacted in a positive way over the next few years. [But it's really] about how do you pick these new ideas and actually implement them.
HL: What would you tell your peers who run for-profit and nonprofit hospitals are the universal qualities that come with running a children's hospital?
McCormick: The one thing I think is interesting is a nonprofit organization needs to make an operating profit to be able to invest back into the mission. It's not the same as a public company, of course, but [leadership has to] make sure we're viable. [Children's Minnesota] is looking forward, investing in the future, and making sure that we continue to be a great resource for the community.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: Minneapolis, USA - November 26, 2017 - US Bank Stadium and Downtown Minneapolis at Sunset. - Image / Editorial credit: Gian Lorenzo Ferretti / Shutterstock.com