Virtua Health CFO Robert Segin details how the New Jersey-based health system endured the most recent COVID-19 surge and how the organization continues to provide care and resources to its communities.
Like many provider organizations, the winter surge of COVID-19 cases presented Virtua Health with some of the most challenging circumstances since the pandemic began last spring.
Virtua, a five-hospital health system based in Marlton, New Jersey, saw "dramatic" spikes in infections and inpatient hospitalizations following Thanksgiving and Christmas, according to Robert Segin, the organization's CFO.
Despite the operational changes related to the virus, Segin said the current situation highlights how well Virtua and other provider organizations have adapted to working through the pandemic.
Months removed from having to contact non-traditional vendors and face record-high prices to secure PPE in a moment of crisis, Segin said Virtua is back to negotiating with its primary and secondary supply chain contacts.
Additionally, the system has been operating one of New Jersey’s four vaccination mega-sites at the location of a former Lord & Taylor store in the Moorestown Mall in Burlington County. Segin said Virtua is distributing almost 2,000 vaccines per day at the location, which is being run by existing staff within the organization.
Speaking with HealthLeaders earlier this month, as the inpatient volume of COVID-19 cases at Virtua decreased, Segin detailed how the New Jersey-based health system endured the most recent COVID-19 surge this winter as well as how it continues to provide care and resources to its communities.
System status update
Coming off an arduous 2020, Segin said Virtua leadership was trying to map out a realistic path for the organization in 2021.
An unexpected bright side to the pandemic is that Virtua, like many hospitals, is not seeing as many flu cases this year, a trend Segin attributed to social distancing measures and mask-wearing.
Still, Segin said it was difficult to budget for 2021 given that the pandemic was so unprecedented in its nature.
"Basically, we took where our volumes stood at around the September time point and we said that was probably when we were most stable in the organization. [It was] not quite getting back the 2020 budgeted levels but getting more towards 90% to 95% of budgeted levels. We felt that that would be an appropriate volume marker to establish our volumes projecting up to 2021," Segin said. "From an expense standpoint, we implemented what was called ‘Lights on Incorporated.’ Basically, what expenses do [departments] need to cut to keep the lights on and keep the organization functioning, without any additional amenities? We were looking at significant corporate reductions across the board, of which, fortunately, all the leaders stepped up and achieved."
Segin said Virtua’s corporate and operations departments did their parts, working to reduce length of stay metrics, as well as reconfiguring staffing and overtime. He mentioned that Virtua is now projecting a breakeven operating budget for 2021.
This is a welcome dynamic shift from last spring when Segin said the only thing he was thinking about was Virtua’s "survival."
Virtua experienced financial stresses related to the outbreak and subsequent suspension of elective procedures, a main revenue generator for provider organizations. Segin said Virtua did not have control of its profit and loss statement (P&L), expenses fluctuated for both staffing and PPE considerations, and the cost of treating a patient infected with COVID-19 remained unknown.
Segin said that while there were several financial factors out of his control, having strong liquidity allowed Virtua to navigate the market volatility even before the federal government passed the CARES Act.
As hospitals and health systems emerge from the pandemic, there is a growing expectation that there will be increased consolidation across the provider community. While Segin said that there could be an uptick, he added that the south New Jersey market is "somewhat stable" and that he doesn't expect significant M&A moves.
Thoughts on the vaccine rollout
According to Segin, Virtua is hosting a vaccination mega-site at the request of the state government, which means the organization is not guaranteed reimbursement for its services.
However, Segin noted Virtua has reached out to its payers to request reimbursement at the Medicare vaccination rate, a request which has been accepted by most insurers.
Segin said the organization’s primary mission is still to vaccinate as many New Jersey residents as possible but added that even if Virtua faces a shortfall related to vaccination reimbursement, the system could recover 75% of its shortfall through FEMA.
Looking at the broader vaccination effort, Segin said Virtua had vaccinated more than 50,000 residents by mid-February, though he noted that there is "always the need for more vaccines."
The logistics for establishing a vaccination mega-site also required Virtua to overcome some unexpected obstacles.
Segin stated that Virtua had to establish a scheduling system for its patients through Epic, which doesn’t have a ‘Ticketmaster-style’ scheduling function. He said the organization’s IT department worked with the EMR provider to create an efficient registration operation.
Anticipating a stimulus and investing in SDOH
While another COVID-19 relief stimulus package is being debated in Washington, D.C., Segin said Virtua would welcome additional financial assistance, but isn’t counting on it and hasn’t budgeted for additional federal funding.
"The other issue that's up in the air is the discussion about [health] systems that have received Medicare advance payments through the CARES Act, and the possibility of that being permanently given as revenue," Segin said. "That hasn't been resolved yet, but there's been some talk at the congressional level about that, and if it happens, it would be wonderful, but if it doesn’t, it won’t materially harm Virtua."
Outside of the organization’s continuing response to the pandemic, Virtua has focused on addressing the social determinants of health (SDOH) through its food access programs, including the Eat Well Mobile Grocery Store, which was announced in October and launched this winter.
Segin said that the organization was analyzing how to invest in its community even prior to the pandemic, which exposed significant racial health disparities in cities across the country. He also noted that Camden, New Jersey, a city with more than 70,000 residents, does not a have a supermarket or grocery store, effectively making it a food desert.
When Virtua CEO Dennis Pullin, FACHE presented the concept to the Virtua Foundation, Segin said donors stepped up to cover the capital expenses, which included a $1 million renovation of the mobile grocery bus donated from New Jersey Transit.
"Operationally, we have a department that takes care of food insecurities, not only through the bus, but through a local grocery store, and pantries within our hospitals," Segin said. "With the partners that we purchased the food from, we don't mark that food up, we sell it at that purchase price. It's a model that in the end, we'll probably lose some money on, but it's not going to be materially significant. It's our way of giving back to the community."
“From an expense standpoint, we implemented what was called ‘Lights on Incorporated.’ Basically, what expenses do [departments] need to cut to keep the lights on and keep the organization functioning, without any additional amenities? We were looking at significant corporate reductions across the board, of which, fortunately, all the leaders stepped up and achieved.”
Robert Segin, CFO of Virtua Health
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Segin said after an arduous 2020, Virtua is now projecting a breakeven operating budget for 2021.
While another COVID-19 relief stimulus package is being debated in Washington, D.C., Segin said Virtua would welcome additional financial assistance, but isn’t counting on it and hasn’t budgeted for additional federal funding
Additionally, Virtua is distributing almost 2,000 vaccines per day at its Burlington County vaccination mega-site.