After more than a decade working in South Miami in various financial leadership positions within Baptist Health, Arsenault is ready to serve as CFO.
Since joining Baptist Health South Florida in 2006, Matthew Arsenault has grown alongside the system.
Baptist Health has expanded to encompass eight hospitals and more than 50 outpatient and urgent care facilities in the Miami-Fort Lauderdale area. Arsenault credits the addition of an employed physician base with transforming the system and paving the way for the Miami Cancer Institute, a new cancer treatment center.
Now, following 12 years working in various positions of financial leadership at Baptist Health, including most recently as corporate vice president of finance, Matthew Arsenault has assumed the role as executive vice president and CFO of the system.
Arsenault replaced longtime CFO Ralph Lawson, who retired after 30 years at the system in September.
In an interview with HealthLeaders, Arsenault said Lawson has prepared him over the past few months to take over the new position, which has made him feel ready to take on the next level of financial leadership.
The following transcript has been lightly edited.
HL: Can you give me some color on the biggest challenges and opportunities for Baptist Health within your own provider market?
Arsenault: I think one of the biggest challenges is that South Florida is an extremely competitive market for healthcare. We have to make sure that we're on our game as our patients rightfully demand the best care possible. We've invested significantly in our centers of excellence, like the [Miami] Cancer Institute. Now, we want to make sure that we are the go-to provider when it comes to quality. We've invested in technology, and have what we believe are the best physicians to get that access [to the best care possible]. Competitive pressure is a big challenge, in addition to the pressures that every system in the country is facing just to control costs.
We believe that one of the things that separates us from others is that the patient is going to come in and we will treat the patient using the appropriate technology for their disease and their condition. That's something we think is important to set us apart and is best for the patient; however, the technology is costly to do that.
We're rolling out even more of our care through an on-demand platform and we're excited about it. We think that's one of the ways also to reduce the cost of care to get patients, if they need a virtual visit, through care on-demand. They can stay at home or they can come to our physical locations, and through those options we assume that they're receiving the quality as expected.
HL: When you're deciding to cut costs, how do you make those decisions?
Arsenault: One of our key strategies has been leveraging economies of scale as we grow and bring on new facilities. We think we are able to add a significant amount of benefit to the economies of scale with our centralized operations and there a lot of things that we do to help them be even more efficient as they grow. A lot of this has to do with prioritization, because as a system, we provide a lot to the community.
HL: In conversations I've had with CFOs from Florida, a big component that always comes up is the payer mix. What does that look like for Baptist Health, and what are some strategies that you'll put into place?
Arsenault: Well, we're in Palm Beach County, [and] we have [a] significant outpatient footprint in Broward County, and then in Miami-Dade. Our payer mix for most of our facilities varies. In deep south Dade, at Homestead Hospital, there is not a favorable payer mix and that facility continues to operate at a loss. I think one of the challenges is the state of Florida did not expand Medicaid, so there are continuing pressures on reimbursement of care and especially increase challenges for Homestead, where we provide a significant amount of charity care. We're a mission-driven organization, and we commit to provide care in the communities we serve and we're continuing to do so. But the pressure, especially from the government reimbursement side, definitely does [have an] impact.
HL: How is Baptist positioned to meet the needs of both millennial and baby boomer patients in the years to come?
Arsenault: I think that's the overarching theme that we are trying to push: you have to make it an efficient, seamless, and positive patient experience from beginning to end. That goes for the time [patients] want to schedule, to when they are in your facility, to when they have to pay the bill at the end. We have an overarching initiative to look at every part of that process to make sure that we're doing everything we can and leveraging technology as well, to do that. I think our care on-demand mobile app is something that we're looking to. We believe that is going to be something that the younger generations are going to look at even more, not only for their own care, but if they're helping out their families with care, it is going to be critical for that, too. At the same time, healthcare is local, and people need to trust that they're getting the best quality care. So technology will only get you so far, because at the end of the day when people are in our facilities, we believe strongly that we have to have caregivers that treat the patient well and deliver quality outcomes.
HL: Can you give me some insight on the project you led last year to refinance about $800 million in tax-exempt debt?
Arsenault: We had plans to refinance all our debt as well as refinance all the debt from Bethesda. And we were in the middle of the process, originally targeting to do that refinancing in January or February of 2018. And then the House tax bill came out, where they were going to remove the tax exemption for private activity bonds. Our team said, 'Well, we need to get [the refinancing] done by the end of the year.' Even though that changed, and they wound up not passing [that amendment], it was a team effort to get that done.
We know that there were some other organizations around the country that attempted to get [refinancing] done by the end of the year, but just couldn't pull it together. It was a pretty big effort to get the whole team to do that and achieve the savings that we did. We're a conservative organization when it comes to our debt structure—[we focus on the fixed-rate debt for a long period of time— so something like [the refinancing] is what we hope will benefit the organization for a long time, especially now that rates have gone up since that time. We're happy with that project and how that turned out.
Jack O'Brien is the finance editor at HealthLeaders.