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Analysis

Sanford Health Finance Exec on System's Preparations for COVID During Flu Season

By Jack O'Brien  
   October 15, 2020

In the face of continued uncertainty, finance leaders are trying to plan for the worst and yet maximize revenue opportunities to salvage what remains of the bottom line.

Editor's note: This conversation is a transcript from an episode of the HealthLeaders Finance Podcast. Audio of the interview can be found here.

We are in the final quarter of the calendar year and hospital executives around the country are gearing up for what could be a challenging few months due to the potential combination of the COVID-19 pandemic and flu season.

Listen: Nashville Health Care Council President on Preparing for COVID's Second Wave

Provider organizations are taking all of the necessary precautions to protect their patients and employees from infection, but in the face of continued uncertainty, healthcare finance leaders are trying to plan for the worst and yet maximize revenue opportunities to salvage what remains of the bottom line.

In this month's episode of the HealthLeaders Finance Podcast, Kent Lehr, chief of business development at Sanford Health in Sioux Falls, South Dakota, details how the rural health system is preparing for COVID-19 during the upcoming flu season and for the organization's financial health. Lehr started at Sanford Health in August 2020.

This transcript has been lightly edited for brevity and clarity.

HealthLeaders: Kent, I wanted to start off by asking what are your top priorities for Sanford as you take on this new role, especially during a time of crisis? Are there any specific initiatives or projects you're focused on?

Lehr: I think one of the things that has attracted me to this organization for a long time has been their steadfast focus on their strategic direction. One of the things that I'm proud of being part of Sanford now is that we don't panic. While there are definitely unique challenges that 2020 has brought about, and we're expecting 2021 to be much of the same, we're focused on continuing to be a growth company. We're focused on continuing to use our platforms within the organization to expand, grow, and create new and diverse relationships and partnerships that not only can help us through the current COVID crisis, but will have long-term benefits to the patients and the communities that we serve.

Being new to this organization, my goals in this role are just to continue to help Sanford execute on their strategy of being a growth company and ensure that we're a good partner for organizations out there that want to grow and develop new capabilities, solutions, and tools for us and our patients. While COVID challenges are broad and causing a lot of organizations to shrink or to pull back investments, we're very much the opposite. We are trying to figure out how we can use this challenge, and use COVID, as a way to catalyze the growth of our organization so that on the back end of this, we're that much better positioned to take care of the communities and the people that need us the most.

HL: Regarding the COVID-19 pandemic, how should provider organizations approach acute short-term financial issues while also remaining flexible enough to focus on long-term business opportunities?

Lehr: My advice is that you just don't panic. There are always going to be challenges [even] if there wasn't COVID. Go back [through] the last decade and there have been numerous challenges that have impacted the healthcare industry; COVID is just one more example of those things that you can't plan for. I think that the resiliency of the organization is going to be contingent on how you handle challenges and crises.

You immediately look at non-labor efficiencies and so [Sanford's leadership] posed a challenge to the organization: where can we find non-labor efficiencies and cost savings until we have a better understanding of what the impact of COVID is going to be on the organization? The second [strategy] was that we got to use scale to our advantage. Sanford is a large organization that is well integrated in the communities that we're in, but our ability to move supplies and resources, both clinical and nonclinical, across the 26 states that we're in has been a huge benefit. Frankly, this is a benefit that smaller organizations just simply don't have, and so we used scale to our advantage to ensure that our people in our communities were protected. 

The third [strategy] was simple: just stay focused. Being a large organization, we've got a wide breadth of skill sets, diversity of backgrounds, and education amongst our workforce; so how do [leaders] tap into the right people with the right skill set to handle the crisis and stay focused on the other things that are important to our business long term? We've proven an ability to do that while learning from the challenges in the present day.

[Finally] the fourth [strategy] is that we've got to invest in our people. I've seen too many headlines where organizations have quickly furloughed, laid off, or cut their workforce. That's the workforce that our communities are relying on to take care of them and to protect them during this time. I'm proud of Sanford's commitment to our team members across the enterprise and the investments in those teams through specific programs meant to help them through this COVID challenge. We're going to deal with other challenges as we go forward, and we want to make sure our workforce is taken care of and does not feel like we left them out as we tried to deal with the challenges at the organizational level.

Related: Sanford CEO Distances Health System from T. Denny Sanford Amid Child Pornography Investigation

HL: As we head into the fall and potentially face a combination of a second wave of coronavirus cases along with the beginning of flu season, what is Sanford doing to prepare for these dual challenges?

Lehr: First, let's ensure and encourage everyone in our communities to get their flu shots and try to mitigate the risk with flu season. We are requiring all of our 50,000 employees to get their flu shots before November 1.

Then you start to go up levels; we look at what things we can learn from when COVID cases began to spike in the spring. There wasn't a lot of information, science, or research at the time—we were learning every day. However, some of the things that we've developed in terms of our staffing plans, our ability to flex facilities in our capacity plans, those are things that shouldn't just collect dust. We're continuing to refine how we performed during that first phase and ensuring that if there is a spike in COVID cases in any of our regions that we're able to learn from how we responded to that first time and make improvements from an operational standpoint.

I think that there's a misconception that if you're in a large scale healthcare organization that you somehow sacrifice local healthcare delivery, and I think that's wrong frankly. This pandemic is a great example of where scale helped enhance our ability to provide excellent local healthcare, and our organization is going to continue to do that.

HL: From your prior experience leading the UnityPoint Ventures investment fund, what advice would you give to hospital and health system executives that might be looking to increase their organization's investment in healthcare innovation? What lessons or warnings would you give them about this new pursuit?

Lehr: First, you've got to be motivated, especially with the ventures work, by more than your financial returns. The ethos at Sanford has been about research and innovation since I've known the organization. And so, at a minimum, you've just got to want to innovate, and you've got to want to be disruptive, even if that disruption is to yourself. As long as that's a core part of your culture and ethos, it's just going to work better in your organization.

As we started the venture work, the success wasn't going to be measured simply by the financial returns. We weren't private equity, venture capital, or angel investing, our goal wasn't venture returns solely. Our goal was around what was going to be the clinical benefit, what was going to be the operational benefit, and what was going to be the benefit of patient experience. As a healthcare organization, that's the critical piece; it's understanding how you measure success. If it's simply just financial returns, there are others out there much better at that, and that was one of the key learnings for us.

I think what's so attractive about Sanford is that if you look at the investment in our research organization, I'd be hard-pressed to find another community health system in the world that has the amount of investment, infrastructure, and research that Sanford has.

There's an underlying culture of curiosity; it's a learning organization, and that's foundational if you want to expand into ventures or create a fund or an incubator. Having that platform is going to be beneficial for any organization. If you're nervous about disruption, then I would say it's probably not for you. But if you're an organization that's steadfast and crystal clear on what success looks like, and you're looking at it more broadly than purely financial returns, then it allows you to partner with the right people from the financial sense: the ecosystem of entrepreneurs that are out there, the startup companies—you bring them all together, you provide a platform, and you've got the culture, and I think you can be successful.

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


KEY TAKEAWAYS

Kent Lehr, chief of business development at Sanford Health in Sioux Falls, South Dakota, who recently joined the organization, says the system is learning from the first wave of COVID-19 and aims to utilize its resources to protect patients during the upcoming flu season.

"I think that there's a misconception that if you're in a large scale healthcare organization that you somehow sacrifice local healthcare delivery, and I think that's wrong frankly," Lehr says. "This pandemic is a great example of where scale helped enhance our ability to provide excellent local healthcare, and our organization is going to continue to do that."

Lehr adds that investing in healthcare innovation can be disruptive and requires a focus on more than just financial returns.


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