Latest / Becker’s Healthcare Podcast / Melinda Hancock on Consumer-Centered Transformation and Financial Leadership at Sentara Health

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Melinda Hancock on Consumer-Centered Transformation and Financial Leadership at Sentara Health · Becker’s Healthcare Podcast

0:02
This is where health care leadership comes together.
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Becker's sixteenth annual meeting brings more than 3,500
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hospital and health system executives and nearly 800
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speakers to Chicago
0:12
April.
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This year's event includes keynote conversations with Dallas
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Cowboys legend Troy Aikman and former president George
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w Bush. For the agenda and event details,
0:22
visit beckershospitalreview.com
0:25
and click on the events tab in the
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upper right. We're looking forward to hosting you
0:29
in Chicago.
0:31
This is Laura Dierdo with the Becker's Healthcare
0:34
podcast. I'm thrilled today to be joined by
0:36
Melinda Hancock, executive vice president and chief financial
0:39
officer at Sentara Health. Melinda, it's a pleasure
0:41
to have you on the podcast today.
0:43
Thank you, Laura. Very much looking forward to
0:45
it.
0:46
Absolutely. Now I'm excited for our conversation because
0:49
I know Sentara is very much on the
0:50
forefront of a lot of the big things
0:52
that are happening in health care today, and
0:54
certainly your perspective on how you're thinking about
0:56
the future will be valuable for a broader
0:58
audience. But before we dive in, can you
1:00
just tell us a little bit more about
1:01
yourself and Sentara Health?
1:03
Sure. No. Happy to.
1:05
I have been with Sentara for about four
1:07
and a half years,
1:09
serving in a variety of leadership roles. I
1:12
started as the inaugural chief administrative
1:14
officer and then had the incredible pleasure of
1:18
becoming the chief transformation officer for over two
1:20
years
1:21
as we were,
1:23
launching a a very transformational,
1:25
not to overuse that word, strategy,
1:28
really putting consumers as our North Star and
1:31
optimizing our assets as an integrated,
1:34
delivery network.
1:36
I am very pleased though to have taken
1:38
that experience
1:40
and now using that, going back to my
1:42
roots
1:43
as the chief financial officer since that has
1:45
been the majority of my roles in the
1:47
past.
1:49
Absolutely. That's fascinating to hear. And, you know,
1:51
I know that transformation
1:53
that Sentara has been going through,
1:56
is really fascinating and something that a lot
1:58
of hospitals and health systems I've connected with,
2:01
you know, are are trying to do something
2:02
similar and thinking about the patient as a
2:04
consumer, trying to find ways that they can
2:07
improve the experience and access to care. And
2:09
so
2:10
along that journey over the last couple of
2:12
years, is there anything you can share with
2:14
us that has been,
2:15
you know, particularly
2:17
helpful or useful during that time and anything
2:19
you were surprised about as well?
2:21
Sure.
2:23
Let me level set real quick on Sentara.
2:25
So we are a $14,000,000,000
2:28
net revenue integrated delivery system. We're based in
2:31
Hampton Roads,
2:32
Virginia, for those who don't know where that
2:34
is. And we are on the Eastern part,
2:36
but have facilities throughout
2:38
Virginia and in North Northeastern North Carolina with
2:41
12 hospitals and over 400 sites of care.
2:44
We cared for over 1,500,000
2:46
patients last year, as well as our 1,000,000
2:50
members,
2:51
through a variety of different lines of business,
2:53
Medicare, Medicaid, and commercial. Do all this with
2:57
34,000
2:59
incredibly dedicated employees,
3:01
over 2,000 physicians and ATPs
3:04
as well. So incredibly proud of the work
3:06
that we're doing.
3:07
We
3:09
designed a purpose statement four years ago that
3:12
I think really helps drive our work, and
3:15
that's that Sentara exists to be the trusted
3:18
partner to individuals and community in their journey
3:21
to health and well-being.
3:22
So as we center ourselves on that purpose,
3:25
the transformation
3:26
work
3:27
feeds that.
3:28
In everything that we do in transformation,
3:30
we wanna make sure that it is somehow
3:33
creating health care to be more seamless,
3:36
simple,
3:37
personal, and more affordable. Words that aren't used
3:40
to describe health care, unfortunately,
3:43
in our country.
3:44
So as we've been working through the transformation,
3:48
some of the best surprises
3:51
are we have,
3:52
our employees
3:54
share how they envision
3:56
a Sentara where
3:58
all these things I just said are true.
4:01
And the creativity,
4:03
the imagination,
4:04
the dedication
4:05
of our employees
4:07
who truly want to create a better health
4:09
care system
4:10
is incredibly inspiring and some cases truly brought
4:13
tears to many of our eyes.
4:16
I think that's been surprising.
4:18
Not that we doubted or for a second
4:20
thought that our employees weren't a 100% engaged
4:23
in this process,
4:24
but to hear their vision aligned with our
4:28
vision
4:29
and how we can truly make this impact
4:32
as a system that has care delivery
4:34
and health plan assets,
4:36
yet haven't always used them in conjunction and
4:39
in furtherance of making sure
4:42
our health care is better for our consumers.
4:44
So that's been that's been a a joy.
4:47
This has not come without challenges
4:50
as anytime you undertake a significant,
4:54
process change within your organization,
4:57
change management is critical. The why is never
5:00
in question.
5:01
The how,
5:02
it's hard. It's hard to reengineer, rethink, reimagine
5:06
your processes
5:07
knowing that you've got workforce challenges, technology challenges,
5:11
and really want to make sure that you're
5:13
looking ahead. So there was a there's a
5:15
a lot in there, but, happy to talk
5:17
further too about some of the specific work
5:19
we did with our transformation last year helpful.
5:22
Yeah. Absolutely. Let's zero in on that a
5:24
little bit. I think it's always,
5:26
helpful to bring color to some of those
5:28
things that you were mentioning because, you know,
5:31
so many organizations are facing those workforce challenges
5:34
and in trying to do significant change management
5:37
while also,
5:38
understanding the headwinds. And so when you think
5:40
about the last year or so, can you
5:42
talk about an initiative or a couple of
5:44
initiatives that you led that were most impactful?
5:46
What did you do and what were the
5:48
results?
5:49
Well, as I mentioned, our key focus is
5:52
our consumers.
5:52
So as we seek to provide better services
5:55
for our consumers,
5:58
we started this transformation work in 2023,
6:01
again, with the guiding north star of our
6:03
consumers and optimization of our status as an
6:05
IDN.
6:07
We are approximately fifty fifty care delivery and
6:10
health plan, which is unique.
6:12
And
6:13
we wanna make sure again that we're using
6:15
our unique assets to enable that.
6:18
So we also have to be aware of
6:20
these headwinds
6:21
that are coming and in some cases already
6:23
here as we had a very challenging year
6:25
here at Sentara in 2024,
6:28
as well as that shift to ambulatory.
6:30
So a lot of our work is focused
6:32
on how do we actually bring our work
6:35
together
6:35
with care delivery and health plan. So here's
6:38
a good example.
6:39
When you are discharged from a hospital, any
6:42
hospital,
6:43
chances are you might get a couple of
6:45
phone calls.
6:46
One from a care manager with the health
6:48
plan that you are a member of, one
6:51
from the hospital,
6:52
from where you were discharged from to help
6:54
ensure
6:55
that you have a continuation of services post
6:58
discharge to ensure success.
7:01
You might also get one from an ambulatory
7:04
type of of health care delivery,
7:07
because, again, to facilitate that ambulatory
7:10
network,
7:11
and the different diagnoses, of course, that you
7:13
may have have received.
7:15
So here at Sentara, we said, wait a
7:17
minute. Wait a minute. Wait a minute. Let's
7:18
stop and pause and say, is that the
7:20
best thing for our consumer?
7:22
So in the case if I'm a health
7:24
care member and patient of Sentara, I might
7:27
get free phone calls, minimally,
7:29
to help manage my care, all with the
7:31
absolute best intent,
7:33
but not
7:35
not
7:36
coordinated.
7:37
So we have brought our care management together
7:40
in a unique
7:41
opportunity
7:42
we feel as an IDN
7:44
to ensure that we are looking at our
7:46
our patients and members very holistically
7:49
and how we make sure that they are
7:50
not only having great follow-up,
7:52
but also active
7:54
preferably out of the hospital
7:56
care
7:57
for perhaps their comorbidities
7:59
or different conditions,
8:01
and how do we make sure that we
8:02
are doing that in the best interest of
8:04
these consumers.
8:05
So that's a a very large undertaking that,
8:08
we started and is still in process because
8:11
we also wanna make sure that we are
8:12
engaging technology
8:14
to enable this work, not the other way
8:16
around. We don't start with technology. We start
8:18
with what are we trying to solve and
8:20
then what is the technology
8:21
that enables that important work.
8:24
Another large focus this year was increasing the
8:27
financial acumen of our leaders.
8:30
This increased it could includes increased transparency,
8:33
financial accountability,
8:35
as well as operating excellence.
8:37
Given our seven year forecast and those of
8:40
many health systems probably across the country,
8:43
it's imperative that all leaders not only be
8:46
financially astute for their areas of responsibility,
8:50
but also they need to understand
8:52
all the businesses of Sentara.
8:55
If if I grew up in care delivery,
8:57
I need to make sure I understand how
8:58
the health plan works if I'm going to
9:01
do
9:02
initiatives
9:03
and and push forward opportunities for us to
9:05
care better for our consumers.
9:08
And so it's been a very dedicated emphasis
9:10
that we are continuing into 2026
9:13
to ensure that our financial leaders are well
9:16
equipped for the dynamics ahead.
9:19
Absolutely. That makes a lot of sense. You
9:21
know, it's a fascinating opportunity
9:23
for both the clinical side as well as
9:25
the health plan side to work together more
9:27
holistically
9:28
and make a difference.
9:30
And to your point, you know, when you
9:32
are working with leaders who have really an
9:34
understanding of one side or the other, what
9:36
do you do in order to bring them
9:38
together and and create more of that understanding,
9:41
between the two? How can you,
9:43
kind of get those folks up to speed
9:45
more or less, in a significant way so
9:47
that you can continue along this journey?
9:50
Great question.
9:52
We are still looking for those opportunities in
9:54
all in all fairness, Laura, but some of
9:56
the very concrete ways we've done it in
9:58
the last year is one,
10:00
just outright education.
10:02
So we have done,
10:04
recorded tutorials
10:05
of the basics of care delivery and the
10:08
basics of health plan.
10:10
So for example, in the health plan, what
10:12
are our lines of business?
10:13
When do we get rate increases and how
10:15
do how are those rate increases determined?
10:18
What is cost of care? How do we
10:20
spend that premium dollar? What's the difference between
10:23
our medical loss ratio and our administrative loss
10:26
ratio and what goes into that?
10:29
On the care delivery side, we did the
10:31
same thing. How is how are hospitals
10:33
and our ambulatory business
10:36
reimbursed?
10:37
Why is that important? How much quality is
10:39
engaged with that? What are the levers? How
10:42
much is labor versus non labor? How do
10:44
we measure our quality and also how do
10:47
we get paid?
10:49
Very important,
10:50
because health plan and care delivery are structurally
10:53
very different from a financial perspective. Care delivery
10:57
is very labor dependent.
10:59
Health plans are more technology dependent.
11:02
And so our ability to make sure that
11:04
we are talking the same language
11:07
as we're trying to solve the same problem
11:09
is so important.
11:11
But also one very great,
11:13
fantastic example is we did create a turnaround
11:16
room for our health plan.
11:18
As I'm sure many people noticed, we had,
11:21
one of our first losses ever in Sentara
11:23
in 2024,
11:25
primarily due to Medicaid redetermination
11:27
because we have a large
11:30
Medicaid business on our health plan and in
11:32
care delivery in service to those important,
11:35
consumers.
11:37
And so when Medicaid we determined came through,
11:39
not only, you know, did we experience the
11:41
negative impact
11:43
that, but so did nearly every health plan
11:45
that had a a significant Medicaid line of
11:48
business.
11:49
And so we started a turnaround room this
11:51
this year, or in 2025
11:55
that was led by the health plan,
11:57
but engaged care delivery leaders as well.
12:01
So if we see an issue that perhaps
12:02
we have members being discharged from the hospital
12:05
without a PCP,
12:06
well, wait a minute. How do we work
12:07
with our medical group
12:09
to align that need?
12:11
So very simple issues like that,
12:14
if we are trying to serve some of
12:15
our ambulatory members with their eye exams,
12:18
the health plan actually came up with a
12:20
mobile
12:21
eye exam that would actually go to our
12:22
members houses to ensure, especially for our diabetic
12:26
members,
12:27
that we are getting their eye exam done
12:29
and any consequential
12:31
treatment that's needed. And so the ability to
12:34
bring those,
12:36
problems and then create issues and and plans
12:39
together
12:40
has been has been a really good learning
12:42
and something that we're gonna continue to encourage
12:45
and and and really require,
12:47
because that is how we're going to best
12:50
serve our consumers.
12:52
Got it. That makes a lot of sense.
12:53
You know, it's really fascinating to hear. I
12:55
think that those Medicaid redetermined change in excuse
12:59
me, Medicaid redetermination changes, truly,
13:02
you know, have an impact across the board.
13:04
And so to hear more about how you
13:06
navigated that,
13:08
is just really helpful in understanding how you're
13:11
thinking about things and continue to stay nimble
13:13
so you can provide those solutions.
13:15
Now looking ahead for 2026, what are some
13:17
of your big priorities and headwinds that you're
13:19
focused on?
13:21
Great question. And so let's take the more
13:24
challenging part of that question first, the headwinds.
13:27
So first, preparation for HR one.
13:30
Obviously, every state is going to experience this
13:32
differently and depending on their relationship with Medicare
13:35
and Medicaid,
13:36
is going to be reacting perhaps in a
13:39
in a different way across each state
13:42
given the variability in Medicare payments and in
13:44
Medicaid payments.
13:46
We are also very focused on-site neutrality.
13:48
We saw an incremental,
13:50
change for 2026
13:52
with the outpatient rule, but expect that to
13:55
continue,
13:57
and not, decrease.
13:59
We also wanna address the increased affordability challenges
14:02
with the expired tax credits
14:04
and the redetermination
14:05
that where people lost coverage
14:08
and weren't necessarily able to afford coverage on
14:11
the exchange.
14:12
But I also wanna point out the workforce.
14:16
Actually put out a good report on the
14:18
workforce
14:19
looking at six different forces that are actually
14:22
reshaping our workforce. So just real quick in
14:24
summary,
14:25
first of all, there's a tremendous amount of
14:27
financial stress, whether it's rising labor cost,
14:31
supply cost, pharmaceutical
14:33
cost,
14:34
interest rates.
14:35
It really does,
14:36
have an impact on the ability to continue
14:39
to get the efficiencies
14:41
that hospitals need.
14:43
There's also tremendous demographic shifts. I recently saw
14:46
a very good visual
14:49
of how in 1960,
14:51
our demographics from an age perspective
14:54
was a pyramid.
14:55
And now with our aging nation, it's more
14:58
of a skyscraper.
14:59
So that's really accelerating the need for for
15:02
longer
15:03
and,
15:04
more
15:05
acute, post acute, and home based care for
15:08
our aging population.
15:11
And again, with all the same workforce that's
15:13
not necessarily
15:14
growing.
15:16
We talk a lot about changing worker expectations
15:19
with the different generations that we have and
15:22
ensuring
15:22
flexibility and growth and meaningful work, but also
15:27
taking care of the whole person and supporting
15:29
that well-being
15:30
aspect is gonna be so important.
15:33
We always have to be looking at new
15:34
pipelines.
15:35
We announced, I believe about a year ago,
15:37
that we were doubling our residency slots.
15:40
We understand
15:41
we have to be part of the solution
15:44
And so we are actively working on creating
15:46
additional residency programs.
15:48
To date, we have 267
15:50
residents and really feel the need that that
15:52
needs to double,
15:53
and have aligned with some great partners to
15:56
do that.
15:57
We also have to be very mindful.
15:59
We are in a a period of rapid
16:01
techno technological
16:03
transformation.
16:04
And again, back to my comments earlier, we
16:07
here at Sentara wanna make sure that we
16:09
understand what we're solving for and what is
16:11
the technology that enables that.
16:14
But as we also know, this is changing
16:16
rapidly.
16:17
So whether it's your AI enabled workflows or
16:20
machine learning, telehealth, the different digital opportunities,
16:24
it's so important to get all of that
16:26
aligned
16:28
as well as you're trying to upscale your
16:29
workforce.
16:31
And then, I am very concerned about the
16:34
ongoing geographic disparities.
16:37
Access is such a key component
16:39
to that.
16:40
We stood up Centerra Cares clinics
16:43
that were statistically
16:45
chosen to be in areas
16:47
of greatest need for access.
16:50
And so, really ensuring that our members have
16:52
access to care
16:54
is so important.
16:55
That is just one example and that will
16:57
not solve all the issues. So, our ability
17:00
to be more flexible, think differently about how
17:03
different models work, we just got a new
17:06
mammo
17:07
van to ensure that,
17:10
our female members have access to this important
17:12
test.
17:13
And so, again, driving in the areas of
17:16
greatest need and concern.
17:19
And so, you know, as we think about
17:21
our priorities for '26,
17:23
we have to think of these as
17:26
things to manage and perhaps optimize
17:29
and an opportunity to rethink our business.
17:32
So I mentioned a couple examples already.
17:36
I do wanna talk about the technology for
17:38
a minute.
17:39
We are
17:40
undertaking
17:41
a redesign of our rev cycle.
17:44
Revenue cycle is usually the last touch point
17:47
our patients have with a system with our
17:49
system, any system.
17:51
And that's also sometimes the greatest amount
17:54
of financial
17:55
stress
17:56
and administrative stress and concern. So how do
17:59
we make sure that we are eliminating that
18:01
and designing
18:02
a a revenue cycle
18:04
that meets the needs of our consumers,
18:07
but also
18:08
optimizes
18:09
the technology they've come to expect
18:12
in other transactions in their daily life.
18:15
So we are actually designing a touchless revenue
18:17
cycle,
18:19
but we are also ensuring
18:21
that where our patients
18:23
need and want
18:25
a live interaction,
18:27
we have that readily available.
18:29
Back to our purpose, about meeting
18:31
our community and our individuals where they are
18:33
on their journey.
18:35
And that's clinically and administratively.
18:38
And so that's been a key a key
18:40
focus for us this year, and hopefully, we'll
18:43
have great success to share here in the
18:45
future as we are actively
18:47
redesigning
18:48
our work.
18:49
That makes a lot of sense. And, you
18:51
know, it is just,
18:52
so critical to have that type of focus,
18:54
but also understanding,
18:55
you know, when you're doing some of those
18:58
redesign work,
18:59
having that mission in mind and and just
19:01
having that central to everything,
19:04
that you're doing. And so I think you've
19:05
tied everything together really nicely here when you
19:07
talk about making changes even to the revenue
19:10
cycle and administrative
19:11
aspects of it, knowing that the patient needs
19:14
and and community access is front and center,
19:17
is so critical.
19:19
I'm curious. Before we wrap up here,
19:21
what do you think the hardest thing you'll
19:22
have to do in the coming year will
19:24
be?
19:25
Well, I'm gonna go back to the education.
19:27
I think internally, I know I've talked,
19:30
in in our conversation about the need to
19:34
continue to
19:35
educate our internal
19:37
workforce,
19:39
and how we optimize ourselves as an IDN
19:41
and and in service to our consumers.
19:45
Our leadership must be equipped and knowledgeable about
19:47
the financial opportunities for before them in order
19:50
to reshape
19:51
how we provide our services to our consumers.
19:54
So this work will continue.
19:57
It's hard,
19:58
but very valuable work.
20:00
But then let's look externally.
20:03
Our industry is funded through decades of of
20:06
imperfect
20:07
financing mechanisms
20:09
that have been put in place for a
20:10
variety of reasons, whether it's to control cost,
20:14
fight fraud, waste, and abuse,
20:16
or provide reimbursement for underfunded lines of business,
20:20
and also quality.
20:22
However, the underlying
20:24
premise
20:25
is that the majority of our patients are
20:28
financed
20:29
by a minority
20:30
of our patients.
20:32
And so if you start to pull on
20:34
the very threads
20:36
of the areas that are providing margins to
20:38
the hospital that enable them to care for
20:40
their community and invest in technology and their
20:43
workforce,
20:44
then the entire fabric starts to weaken
20:47
to support the whole.
20:49
And that is what we're seeing.
20:51
So therefore, education
20:53
to the decision makers
20:55
on what meaningful health care
20:57
refinancing reform
20:59
is required so that we can ensure that
21:01
all stakeholders are at the table.
21:04
And what that path to success looks like
21:06
to continue to ensure our community's health.
21:10
I see this as a
21:12
large critical task.
21:15
Everybody is trying to do the right thing.
21:17
I don't doubt intent
21:19
in how to redesign the health care financing
21:23
program.
21:24
However, I think we we must educate
21:27
and we must make sure the right people
21:28
are at the table while we do it.
21:31
Absolutely. That makes a lot of sense. I
21:33
mean, the complexities of health care and how
21:35
everything is so interwoven and interdependent,
21:38
you know, is truly
21:40
fascinating,
21:41
right now. And it is things are changing
21:43
so quickly. Having that type of education and
21:45
making sure decision makers
21:47
understand truly the impact of the decisions they're
21:49
making is critical.
21:51
Now
21:52
how are you thinking about growth as well
21:54
over the next couple of years? What are
21:56
some of the best opportunities that you're seeing
21:57
coming down the pipe?
21:59
Well, I think when we look at growth,
22:02
I think and given the headwinds that we've
22:03
talked about and where we are, I think
22:06
gaining efficiencies is gonna be critical. So any
22:09
growth needs to make sure we're optimizing the
22:12
assets we have,
22:13
as well as how are we ensuring
22:16
that we are are scaling
22:18
the investments,
22:20
scaling
22:20
our capabilities,
22:22
upskilling
22:24
our our colleagues.
22:26
And so therefore, growth becomes
22:29
not only
22:31
for top side revenue, but for
22:33
capabilities
22:35
and new ways of delivering care, as well
22:38
as
22:38
an efficient
22:40
administrate an administration
22:42
to support them.
22:44
The overhead of today has to be very
22:46
different
22:47
tomorrow
22:48
and so ensuring that
22:50
we are
22:52
investing in the technology to enable that,
22:55
but also looking for scale for the investments
22:58
that all of us are now making
23:00
in technology is really important.
23:02
But that also that capability component,
23:05
growing for another capability, sometimes we can't do
23:08
that ourselves. So so the best option is
23:11
to partner
23:12
and and really get into that buy or
23:14
build,
23:15
conversation.
23:16
So lots I think a lots of opportunities
23:18
as we look across,
23:19
where we need to be and how we
23:21
need to grow.
23:22
I love that. Melinda, thank you so much
23:24
for joining us on the podcast today. This
23:25
has been such a a fun and informative
23:27
conversation. I I really, you know, I could
23:30
dig into a great many of things that
23:32
you talked about today and hope to do
23:34
so as well at our annual meeting. I
23:35
know you'll be speaking there, and, it's just
23:38
always a pleasure to see you and inform
23:40
you. So thank you so much, Morna. I'm
23:41
looking forward to seeing you in April.
23:43
Thanks so much, Laura. Yes. I'm very much
23:45
looking forward to April. Always a fun event
23:47
and really appreciate,
23:48
spending this time with you today.