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Analysis

Emerging From Pandemic: LCMC Health CEO Details How the New Orleans System Is Moving On

By Jack O'Brien  
   April 30, 2020

Greg Feirn speaks to how his organization handled the unprecedented clinical and financial demands related to COVID-19 outbreak.

Monday, April 27, marked the first day since March 22 that New Orleans did not record a new death as a result of coronavirus disease 2019 (COVID-19). The city, like other hotspots across the country, has been severely impacted by the spread of the virus, which has infected over 1 million people nationwide and spurred an unprecedented economic downturn.

Hospitals and health systems have borne the brunt of the financial damage over the past two months, losing a key revenue generator as elective surgeries were temporarily canceled.

Monday also marked the first day that LCMC Health, a five-hospital system based in New Orleans with $1.7 billion in annual revenues, began reopening elective procedures. Greg Feirn, CEO of LCMC Health, tells HealthLeaders that the organization reached its peak handling the flow of patients infected with COVID-19 on April 1, reaching about 400 positive cases in the hospital.

Related: Here's Why These 13 Louisiana Parishes Have Some of the Highest Coronavirus Death Rates in the U.S.

He says the organization was able to both 'flatten the curve' of COVID-19 cases and slightly offset the revenue losses associated with the temporary cancellation of elective surgeries because of the increased ICU and COVID-19 inpatient volumes. 

Feirn, who spent several years as CFO of LCMC's Children's Hospital before ascending to the top post, says the crisis forced him to be more concerned than ever about having enough liquidity on hand.

"We were fortunate to have a collaborative relationship with elected officials, so the state was able to accelerate Medicaid supplemental payments funding and disproportionate share [hospital] funding," Feirn says. "While that was an advance, it certainly went a long way to shoring up our liquidity. And just to be safe, we did put some additional lines of credit in place to manage liquidity."

Feirn details how the health system navigated the COVID-19 outbreak in New Orleans, why telehealth services will continue to serve as an integral service in the years to come, and why LCMC did not furlough or lay off any employees.

This transcript has been lightly edited for brevity and clarity.

HealthLeaders: What are your expectations for reopening elective procedures post-pandemic, as well as both the potential clinical and financial impacts on your offered services?

Feirn: Our leadership group across the system has been thinking about it for weeks now. We feel prepared and we will look to work through a phased-in approach so we're not completely turning it on. We'll focus on those types of procedures that are urgent and non-emergent, and slowly work up our clinic operations.

Related: Three Notes From the Winter CFO Exchange in New Orleans

Based on where we are with the our COVID-19 inpatient capacity, we feel like we're prepared to handle it, knowing that we're going to be managing around COVID-19 for a number of months. I think of that as the normal [expectation] near-term; until there's a vaccine or until we reach herd immunity, we're going to have COVID-19 in our hospitals. We are going to have to look to manage that along with what used to be our regular business.

HL: In recent days, we've seen several hospitals and health systems lay off or furlough hundreds of thousands of workers. Can you describe the thought process behind those decisions for a healthcare executive and how it affects organizational culture?

Feirn: There are two parts to the answer. First, I believe there are two things at play here: one is that a healthcare system might be in a region that was very hard hit by the pandemic. In New Orleans, we [experienced] a significant ramp up in the number of inpatient [cases] and the number of people in our ICU. Then, you have hospitals who are situated in areas that didn't have much COVID-19 activity, yet they were forced to shut down elective [procedures]. They lost the bulk of their ED volume and they didn't have any COVID [activity] to make up the difference. 

I think the federal government needs to pay attention to those two different situations, because you could have hospitals that didn't have a lot of COVID-19 activity and have pretty severe financial ramifications from that.

With that in mind, for us, we did have a lot of COVID-19 activity. Our March results didn't play out as badly as we thought they would. [Our results] were not great, we had operating losses, but to some extent the amount of ICU volume and COVID-19 inpatient volume have helped offset the loss of electives and non-emergent outpatient visits.

Related: Anatomy of Ochsner Health's COVID-19 Response

We look at this and think of our employees as the most important asset and have made a commitment to no furloughs and no layoffs for the foreseeable future. [We are] operating under the thought that we're going to be managing around a set of [approximately] 200 COVID patients for quite some time. That's business on top of what we used to have and if we start to bring back our outpatient business and elective procedures, we could find ourselves busier than we've ever been.

I know that's an optimistic view, but it's one that I, as a leader, want to plan for. If that works, I want to make sure we have our most valuable asset here in place and that's our employees and our physicians.

HL: What has been your organization's experience with telehealth services throughout this pandemic?

Feirn: I think [telehealth] is here to stay and will probably ramp up in the future.  

We had virtual care services across our system, but not to the extent [until] we were able to ramp [it] up during COVID-19. As an example, we quickly implemented a RN screening hotline and we've done over 13,000 phone calls since [the pandemic] started. That really helped us triage what patients needed to just stay home and quarantine with follow up, and those that needed to do a tele-ED visit.

At Children's Hospital, where they weren't impacted as much by COVID-19 but a lot of their outpatient business and elective procedures were shut down, we saw our pediatric subspecialists go from probably 10 physicians utilizing telemedicine to over 120 in a matter of weeks. Those were pediatric subspecialists and we know how rare they are in the country.

I think that the federal government and the commercial payers will come along because, ultimately, it's a lower cost of care. If we can prove that there are certain clinical modalities best suited for virtual care, it's going to be a lower cost of care. I think a lot of [telemedicine] is here to stay. We probably advanced ourselves three years forward just through this pandemic.

Correction: An earlier version of this story indicated that Greg Feirn served as CFO of LCMC Health. He served as CFO of the organization's Children's Hospital. This article has been updated to reflect that.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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