Avera Health's investment focus in 2023 is addressing the mental health of its community.
When speaking to some hospital and health system CFOs you may notice that many of them have one unique thing in common: they didn't initially seek a career in healthcare finance. However, once they entered the field and understood the impact they could have on people's lives, they became passionate about the role.
That was the case for Julie Lautt, the chief financial officer for Avera Health—a Sioux Falls, South Dakota–based healthcare provider with 37 hospitals, over 1,600 beds, and more than $1 billion in total annual revenue. Before beginning her career with Avera, Lautt was in public accounting and worked for PricewaterhouseCoopers. She was an auditor and her role was to connect with companies in different industries to help them with year-end financials, but what she really wanted was to be part of an organization's year-round planning and strategies. That's how she ended up at Avera Health, where she has spent the last 23 years helping the organization secure its financial wellness while providing patients with high-quality care.
Lautt recently connected with HealthLeaders to discuss the ebbs and flows she's seen in healthcare finance throughout her career, how she's helped Avera Health through the financial challenges the pandemic has caused, and actionable solutions her organization has implemented to meet those challenges.
HealthLeaders: What did the pandemic teach your organization about the best strategies to overcome challenges?
Julie Lautt: We have a rural network, and we have a tertiary facility that's based in Sioux Falls. Like never before, we came together as a health system and had to look at our operations and finances from a system perspective rather than focusing on all of our individual regions or hospitals or clinic locations. So, we looked at how we could come together to solve the broader challenges.
We looked at the supply chain issue, which was significant during that time and continues to be an issue today, [and] workforce shortages and how we were dealing with capacity and sharing our patients amongst our system. The lessons that we learned became a springboard for us as we're encountering some of these new challenges like the tight labor market, the increasing labor expenses, the inflation that we're seeing, and quite frankly, some of the pent-up demand that we're seeing in our market related to our services. So, we have been focused on how do we align as a system? How do we address this together?
HL: How has Avera Health made workforce challenges a greater priority?
Lautt: One of the innovative solutions that we had was to create our own travel nursing program to reduce the expense of our external travelers that we have to pay for from agencies. So, we're seeing some success where we can attract certain nurses who want to go into those traveling roles, [and] utilize that as an opportunity to serve as our own Avera footprint, rather than doing that from an external perspective.
We're getting a lot of positive feedback because there are a lot of folks who are interested in the travel opportunity, but they also want the benefit and stability of remaining an Avera employee. So, we see it as a win-win.
HL: What other strategies help Avera Health maintain financial stability and high-level patient care?
Lautt: As soon as we started seeing our trends of costs continue to go higher, we began to focus on a financial stewardship plan at Avera, and our number one focus was maintaining our patient care.
We're doing assessments on right-sizing our administrative tasks and non-patient care. We've also been assessing our non-core services. And the reason that we're doing that is to protect those critical components of patient care.
We're taking a look at some of the short-term levers and discretionary spending, while we also focus on long-term sustainability, optimization, efficiencies, [and] utilizing technology.
HL: As CFO, where would you like to see Avera Health make greater financial investments this year?
Lautt: We're focused right now on opening a new freestanding emergency room and clinic on the east side of our town. We also are invested in mental health, and we've identified that continues to be a growing need. We've been at capacity for some time, so we continue to expand in our Sioux Falls market thanks to a grant we have with one of our partners, [and] we were able to construct a new space and answer the need for 24/7 urgent care and residential addiction services for youth and partial hospitalization for youth.
Amanda Schiavo is the Finance Editor for HealthLeaders.
More hospitals and health systems are realizing that surviving the pandemic means overhauling old operating strategies.
When costs continued to go higher, Avera began to focus on a financial stewardship plan that would maintain high-quality care.