Latest / Becker’s Healthcare Podcast / Diana Richardson, President and CEO of Merrimack Health

Transcript

Diana Richardson, President and CEO of Merrimack Health · Becker’s Healthcare Podcast

0:02
This is where health care leadership comes together.
0:04
Becker's sixteenth annual meeting brings more than 3,500
0:07
hospital and health system executives and nearly 800
0:11
speakers to Chicago, April 13 through the sixteenth.
0:14
This year's event includes keynote conversations with Dallas
0:17
Cowboys legend Troy Aikman and former president George
0:20
w Bush. For the agenda and event details,
0:23
visit beckershospitalreview.com
0:25
and click on the events tab in the
0:27
upper right. We're looking forward to hosting you
0:29
in Chicago.
0:32
This is Alan Condon back with another episode
0:35
of the Becker's Healthcare
0:37
podcast. And today, I'm delighted to be joined
0:40
by Diana Richardson,
0:42
the president and CEO of Merrimack Health, a
0:45
three hospital newly formed health system that launched
0:49
in September and named after a river valley
0:52
that cuts through the organization
0:54
service area in Massachusetts, if I'm not mistaken.
0:58
Diana, a real pleasure to have you on
1:00
the podcast with us today, your debut appearance.
1:03
For those of our listeners who mightn't be
1:05
as familiar with you and Mer Merrimack Health,
1:08
you might give us a little bit more
1:10
information about your role and your background at
1:11
the health system.
1:13
Great. Now thank you so much for having
1:15
me, Alan.
1:16
So I joined the organization here, first in
1:19
the role of interim back in April,
1:22
and was delighted to become the permanent president
1:25
and CEO and really inaugural CEO of Merrimack
1:28
Health in October.
1:31
Our organization
1:33
formed in a very unexpected and rapid fire
1:36
way,
1:37
really in October
1:39
'24
1:41
when the then Lawrence General Hospital, a hospital
1:44
that had been a stand alone community hospital
1:46
for a hundred and fifty years,
1:48
acquired
1:49
two of the,
1:51
steward health care hospitals that were going bankrupt.
1:55
So the Holy Family,
1:56
hospitals in Methuen and Haverhill, Massachusetts,
2:01
Massachusetts, and became an acquirer to keep those
2:03
hospitals from closing and really secure health care
2:06
here in the Merrimack Valley region of Massachusetts.
2:10
Fantastic.
2:11
I think so to your point, I believe
2:13
before we recorded, a lot of health systems
2:15
do indeed have unique stories. I think that
2:18
is specifically
2:19
true for Merrimack Health, your organization.
2:23
Congratulations,
2:23
inaugural
2:24
CEO on October.
2:26
Really interesting backstory. I'm excited to dive right
2:28
in. So, Diana, I think first and foremost,
2:32
what was going through your mind when you
2:34
decided to join the health system at such
2:37
a pivotal such a critical point in its
2:40
integration?
2:41
Yeah. So,
2:42
you know, sometimes life throws you unexpected curveballs.
2:46
And so I have had a long term
2:48
career in health care administration
2:50
and leading hospital operations.
2:53
And in
2:55
2024,
2:57
I had a very unexpected opportunity. I was
2:59
invited by the,
3:01
commissioner for public health in the Commonwealth of
3:04
Massachusetts
3:06
to join an incident command
3:09
response that they were standing up,
3:11
to prepare for what they anticipated
3:14
would happen and did eventually happen, the bankruptcy
3:17
of Steward Healthcare.
3:19
In Massachusetts,
3:20
Steward had nine hospitals.
3:23
We operate here in our state at very
3:26
high capacity levels, so there was really no
3:29
free capacity in our health care system to
3:32
absorb
3:33
the patient care from nine hospitals. And so
3:36
the state stood up in instant command, and
3:38
I got to join that response.
3:41
So through that, I had become very familiar
3:44
with the Lawrence General Hospital
3:47
acquisition
3:47
of the Holy Family Hospitals and and actually
3:50
had the opportunity to assist a little bit
3:52
from the state perspective since that had to
3:55
happen so quickly.
3:57
So when I have the opportunity
3:58
to join, what was going through my mind,
4:01
really multiple things. The first was
4:04
how important
4:05
the success
4:06
of the integration and the new system was
4:09
to health care in this region.
4:11
We are really the only regional health care
4:14
provider in the Merrimack Valley region
4:17
here in our state.
4:19
And so it was critical that this be
4:21
a success.
4:22
So it was a a no fail option
4:25
kinda scenario. So that was certainly going through
4:27
my mind. But the other piece that was
4:30
going through my mind was the opportunity.
4:33
In the work with the state, I really
4:36
got a chance to see the commitment to
4:38
the community
4:39
from
4:40
both of the,
4:42
hospitals that were coming together, so both the
4:44
Holy Family Hospitals and the Lawrence General Hospital,
4:47
really, the commitment to community and patient care
4:50
was unbelievably
4:52
strong. We are a safety net facility.
4:55
We take care of
4:57
very sick patients,
4:59
who often don't have
5:01
resources
5:02
and
5:03
really easy ways to access the health care
5:06
system.
5:07
So it is critical that we survive, but
5:10
it's also
5:11
just amazing the commitment of our teams to
5:14
that care.
5:15
So the second thing going through my mind
5:17
was really
5:19
supporting this team in continuing
5:21
those efforts.
5:23
And the third thing that was going through
5:25
my mind was we have got to figure
5:27
out a way to be financially sustainable to
5:30
make sure that we continue to provide that
5:32
care for the next hundred and fifty plus
5:35
years.
5:35
So a lot of big challenges, but also
5:38
a lot of big opportunities here in our
5:40
region.
5:41
Yeah. And the the in terms of that
5:43
scenario, the no fail scenario option going through
5:46
your mind initially. Certainly no pressure there, Diana.
5:49
But, certainly, you and your team, doing a
5:52
fantastic job right out of the gate so
5:54
far under such unique
5:56
and challenging circumstances.
5:58
I would love to hear maybe one bit
6:00
more on the financial sustainability piece and kind
6:02
of goals, objectives there. But before I do,
6:05
we often
6:06
hear, the hard work and and somebody's this
6:09
is not exactly a traditional
6:11
transaction acquisition because of we all know that
6:13
the challenges are in Massachusetts with Stewart Healthcare
6:16
and whatnot. But
6:17
post integration, we often hear how challenging it
6:20
is in terms of integration to different cultures,
6:23
facilities, hospitals, staff. Can you talk us through
6:26
maybe the biggest challenges you faced in unifying
6:29
these hospitals, what maybe distinct cultures and histories?
6:33
Yeah. So,
6:34
you know, you actually have to start with
6:36
the speed,
6:37
that the system came together. So I have
6:39
had the opportunity in my career
6:42
to participate
6:43
in either the forming or the integration or
6:46
the expansion of systems in multiple organizations.
6:50
And, usually, what happens is you start having
6:53
conversations for a variety of reasons. Sometimes it's
6:56
financial, sometimes it's operational, but you have conversations.
7:00
You talk about strategy.
7:02
You talk about what it's gonna look like.
7:04
You have lots and lots and lots of
7:06
people meeting for many, many, many months, and
7:09
then you finally come together, and then you
7:12
begin to
7:13
pull off all of that work that you
7:15
sketched out in that kind of preparation period.
7:18
In our scenario,
7:20
in May
7:21
'24,
7:23
there was
7:24
no even glimmer of a thought of these
7:27
organizations
7:28
coming together. And on October 1, they came
7:31
together. It was that rapid.
7:33
So there really was no opportunity to do
7:36
any of that planning work,
7:38
any of that let's talk about strategy and
7:41
culture and how are we gonna start operationally
7:43
coming together.
7:45
None of that happened. So we're doing the
7:47
work in a kind of a reverse fashion
7:50
to what the standard process is. We came
7:52
together 10/01/2024,
7:55
and then we started thinking through, okay, what
7:57
do we have to integrate first? So first
8:00
and most important was our medical record. So
8:02
when you talk about challenges,
8:05
doing a rapid fire medical record integration.
8:09
Again, that's something you usually do in twelve
8:11
to eighteen months.
8:12
We had to do it in about six,
8:15
without any preparation ahead of time and without
8:18
any ability for the teams to talk to
8:20
each other ahead of time. So coming together
8:23
in that sense, coming together as one medical
8:26
staff to make sure that we have the
8:27
same
8:29
quality metrics, the same policies, the same processes,
8:32
that if you were seen anywhere in our
8:34
system, you were going to get the same
8:36
high quality care.
8:38
And even things as simple
8:40
as making sure the phones worked.
8:43
The hospitals that we acquired were pretty
8:48
decrepit, I guess, is the word I might
8:49
use, and really had not been invested
8:54
basics just didn't work.
8:56
So you talk about some of the biggest
8:57
challenges. That was really the first challenge, trying
9:00
to do all this work as quickly as
9:03
possible, but also doing it the right way,
9:06
respectfully,
9:07
and, again, that financially responsible way.
9:10
From a cultural standpoint,
9:12
it it's
9:14
really interesting. I've been part of many integrations
9:17
where there is a culture clash, that two
9:20
organizations do things very differently, have very different
9:23
identities,
9:24
and
9:25
much of the hard work is getting the
9:28
teams to think and approach work the same
9:31
way.
9:32
Here,
9:33
there was such similarity
9:35
of cultures in the commitment to community.
9:39
Two of the hospitals are less than two
9:41
miles apart.
9:42
Many people who, when they were kind of
9:45
scared by what was happening at Stewart, looked
9:47
for other employment opportunities, came came across to
9:50
the other hospital two miles away.
9:52
So many faces were the same. People know
9:55
each other. People were neighbors.
9:57
People knew the patients. Patients tended to move,
10:00
between the organizations because they're physically so close.
10:04
And so some of the usual hurdles of
10:07
making sure that everybody has the same cultural
10:09
norms, we just didn't have. We had amazing
10:12
teams who cared about each other and cared
10:14
about the community from day one. So
10:17
what often is a challenge,
10:20
was not so much for us.
10:21
Really, the challenges were much more on that
10:24
operational side, restoring
10:27
facilities, restoring infrastructure, and restoring the confidence of
10:31
the
10:32
patients in our community in
10:35
the acquired organizations.
10:38
Fantastic. So I certainly it'd be better in
10:40
your cap on the operational side of things
10:42
integration wise. I think in terms of that
10:44
rapid fire medical record integration in six months,
10:47
I believe you'd said, coming together as one
10:49
medical staff under the same quality metrics, strategy,
10:52
processes,
10:53
is still in such
10:55
a an early an early,
10:57
antithesis of this of this health system a
10:59
couple months since its birth.
11:01
Diane, I wanted to go back to something
11:03
you'd mentioned just to just in your your
11:06
most recent answer in terms of the financially
11:08
financial sustainability piece. Obviously, so so key for
11:12
hospitals across the country at the moment.
11:14
I believe the latest from Kaufman Hall, nonprofit
11:17
hospitals around about 35%
11:19
are still operating in the red, trying to
11:22
march their margins back up to a breakeven
11:24
standpoint or even back into the black.
11:26
It's unfortunate when we think about next year
11:28
for safety net providers, some more cuts coming
11:31
down the pipeline on the Medicaid side of
11:33
things. Doesn't seem to be much respite. But
11:35
for for you now as CEO of Merrimack
11:38
Health, in terms of the financial sustainability
11:40
piece,
11:41
where are you focusing? How are you making
11:43
keeping this, top of mind going into 2026?
11:47
Yeah. So the you know, I I will
11:49
say that one of the things that helped
11:52
us last year, really, in our first year
11:54
of coming together
11:55
was we had amazing
11:57
partnership from the leadership in our state, and
11:59
the state really
12:00
invested in us
12:02
to allow us to do this. As a
12:04
safety net, stand alone community hospital,
12:07
there was no way we could have done
12:09
this or pull this off on our own
12:12
without that state investment.
12:14
Having said that, we're all looking
12:17
down the face of some really, really grim
12:20
challenges over the next few years.
12:23
And it is our responsibility
12:24
to figure out how to make
12:27
our organization
12:28
be financially sustainable
12:31
both before we head into those, but certainly
12:33
to prepare us for that scenario. And, you
12:36
know, so you think about, okay. What are
12:38
what are the areas that we can and
12:41
do need to control now?
12:43
The first is now that we actually have
12:45
a system,
12:46
in the past,
12:48
these hospitals all competed against each other. And
12:51
we would often define our services
12:54
both in terms of offering, but also size
12:56
and scale by what our colleagues across town
13:00
were doing. So somebody another hospital was offering
13:02
it, we had to do it.
13:04
We actually have an opportunity now to step
13:07
back and say, based on our community, based
13:10
on our population, based on our patient needs,
13:13
what's the right service mix to have, and
13:16
how big should it be, and where should
13:18
it be? So certain things make sense to
13:21
be in all three hospitals. It's important that
13:23
we have emergency services in our communities,
13:27
easy to access. So all of our hospitals
13:29
will and do continue to provide emergency services.
13:33
But certain other things,
13:35
it may not make sense for us to
13:37
have two or three of kind of physical
13:40
locations.
13:41
And by consolidating into one, we can have
13:44
the same access and sometimes even better access
13:47
and better quality by coming
13:49
together, but also reduce cost. So we have
13:51
some opportunities
13:52
in that sense.
13:54
And we also have the opportunity by doing
13:56
that to offer services that have never been
13:59
offered in our community. There are certain things
14:01
that our facilities don't provide that a community
14:04
hospital can and should provide for our community.
14:07
So we can begin to offer new services
14:09
as well, which helps, from a financial sustainability
14:13
side.
14:14
So a lot of work in that sense,
14:16
and certainly the bread and butter work that
14:18
all of my health care colleagues
14:20
know and do every day around
14:23
looking at every penny that we spend,
14:26
and making sure that it really is the
14:28
right investment and the best
14:31
and most effective way that we can do
14:34
anything we do, to drive costs out of
14:37
the system. So it is that operational rigor,
14:40
but, really, we have some new opportunities that
14:42
we have as a system that didn't exist
14:44
before.
14:46
Yeah. So a lot of change, of course.
14:48
But to your point, opportunity for somewhat of
14:51
a reset in terms of some of the
14:53
services being provided that some of the hospitals
14:55
at Merrimack held.
14:58
Diana, so recently, it's been a couple months
15:00
since you stepped into that permanent
15:02
president and CEO role.
15:05
How has your leadership style evolved during this
15:08
time of rapid change? It sounds like a
15:10
it's a a big challenge, but it sounds
15:12
like a challenge you're no doubt relishing and
15:13
and it's and and overcoming quite a bit.
15:16
Yeah. Well well well, I will say it
15:18
helps to have a good healthy sense of
15:20
humor, if we go through some of these
15:22
challenging times. And,
15:24
so I am I'm fortunate to be surrounded
15:27
by a team that can approach these,
15:30
like, you know, challenges, opportunities, whatever you wanna
15:33
call them, with energy and with a good
15:36
sense of humor and reality and support of
15:38
the team as well.
15:40
In terms of leadership style,
15:42
I think it's like any significant change. During
15:46
change,
15:47
the most important things you can do are
15:50
listen to the team,
15:51
get the team's input, listen to what they're
15:53
telling you,
15:55
and make sure that we are responding and
15:57
supporting the teams doing the work. We have
16:01
just amazing people that work across all sectors
16:03
of health care. And if we can support
16:06
them in that,
16:08
and find ways to really listen to their
16:10
input,
16:12
you know, leadership becomes a lot easier. We
16:15
have amazing teams if we can just support
16:17
them and get out of the way while
16:18
they do the great work.
16:20
It it makes my job much easier, but,
16:23
really, it provides much better care for the
16:25
patients as well. So, you know, it's a
16:28
sense of humor for sure,
16:29
and really listening and supporting our teams through
16:32
change.
16:33
Absolutely. I love that.
16:36
Diana, so you've touched on this a little
16:37
bit already, but but I'd love to hear
16:39
maybe one bit deeper in terms of,
16:42
looking ahead, your biggest priorities over the next
16:45
twelve to eighteen months or so. What are
16:47
two or three biggest priorities that you're focused
16:49
on over that time period?
16:51
Yeah. So we have to continue our work
16:52
on integration.
16:54
We did the clinical systems upfront because those
16:57
were the most critical for
17:00
just ensuring safe quality care. Now we have
17:03
to do a lot of the administrative
17:05
processes and systems. So things like our human
17:08
resource system and our accounting systems, we need
17:11
to bring those together
17:13
and make sure that they are integrated into
17:15
one system. So we still have integration
17:18
to do on that front. Despite all the
17:20
work we've done over the past year, there's
17:22
a lot still to do. So that's one
17:24
challenge.
17:25
But, certainly, the biggest challenge that we are
17:28
facing
17:29
is the threat to the
17:32
care and coverage of the patients in our
17:35
region.
17:36
We are a safety net provider.
17:38
We have over,
17:40
75%
17:41
of our patients are supported by some sort
17:45
of government
17:46
payer. And of that, the majority are covered
17:49
by a Medicaid program. And so our patients
17:51
are in a particularly fragile situation.
17:54
We also have a very high immigrant population
17:58
in our area.
17:59
And, you know, for example, in one of
18:01
our primary cities, Lawrence, Massachusetts,
18:04
over 40%
18:05
of the population
18:07
are foreign born,
18:08
and over 80%
18:10
are Latino.
18:12
So it is a population that is really
18:14
at risk of having solid health care coverage,
18:16
but it is also a population that desperately
18:19
needs access to high quality care. So our
18:22
challenges for the next twelve to eighteen months
18:25
is to figure out
18:27
how we can be as financially sustainable
18:30
internally
18:31
as we can so we can prepare for
18:33
those patients who may not have coverage and
18:35
may not have access to care
18:38
in 2627.
18:40
And I will say we continue to partner
18:42
with really all of the
18:45
legislative partners in our area, in our region,
18:48
in our state
18:49
to figure out how we're going to navigate
18:52
a time when many of our patients will
18:54
no longer have coverage, and we'll have to
18:56
avoid
18:57
routine and preventive care.
18:59
That will certainly have impacts on our emergency
19:02
rooms, and that will have impact to the
19:04
access to care for all the patients in
19:06
our region. So we've got some really daunting
19:09
times ahead of us, and our job for
19:11
the next twelve to eighteen months is do
19:13
everything we can and everything we can control
19:18
to provide the best scenario as we head
19:20
into those rocky days.
19:22
Mhmm. Yeah. No. I think, for safety net
19:25
providers, really, across the board next year, it's
19:27
such a challenging time period. But so greatly
19:30
respect and so greatly appreciate
19:32
the work that that you, that your teams,
19:34
or safety net providers do, for the community
19:37
so much.
19:38
Diana,
19:39
last question I have for you before I
19:42
let you go. I think,
19:44
particularly, it seems like 2025,
19:46
we've certainly seen a little bit of a
19:48
rebound in terms of hospital acquisitions,
19:51
mergers,
19:52
somewhat born out of financial challenges, somewhat born
19:54
out of maybe larger health systems growth and
19:56
whatnot. But for for other
19:59
health system or hospital leaders like yourself,
20:02
what advice would you give to them in
20:03
terms of navigating
20:05
consolidation,
20:06
rebranding, or or a health system integration today?
20:09
Obviously, your situation is quite unique. I'm actually
20:11
still learning quite a lot, but any kind
20:13
of advice for other health system leaders who
20:15
might be listening to this podcast going through
20:17
similar process?
20:19
Sure. So, you know, I would say at
20:21
Merrimack Health, couple lessons that we have learned.
20:24
The first, I'll go back to your question
20:26
about supporting the teams and and how we
20:29
do leadership.
20:30
Listen. Listen. Listen. Listen.
20:32
It becomes
20:33
ever more critical in the times that we're
20:36
in to be listening to our patients, to
20:38
our staff, to our physicians.
20:40
They are the ones who will help us
20:42
navigate this. So listen is the first. And
20:45
the second is don't be afraid to move
20:49
fast.
20:50
If you're listening to the teams and you
20:52
are
20:53
reacting to their
20:54
input and their perspective on things, even if
20:58
you sometimes stumble while you're doing things quickly,
21:02
they have your back, and we'll help you
21:04
get through it. So have we done some
21:05
things that were a little clunky? Absolutely.
21:08
Did the teams help us get through it?
21:10
They did.
21:11
And we're stronger because we did things faster
21:14
in the long run. So I guess my
21:16
second, don't be afraid of that
21:18
part. And the third is really look for
21:21
those partnerships.
21:23
In our case, it was really partnership with
21:25
the state,
21:26
but also partnerships with, you know, many of
21:29
the other health systems in our area to
21:32
help us provide clinical care and stability,
21:35
for the programs that we might offer.
21:37
So really looking for how you can partner
21:40
in any scenario. Partnerships looked different. You know,
21:43
we use the word kind of big p,
21:45
little p,
21:46
in terms of partnerships. But, really, however it
21:50
looks, it's
21:51
going to be a rocky time for all
21:53
of health care. So the more we can
21:55
do it together,
21:56
the more successful that we'll be.
21:59
So listen and indeed trust your team. Don't
22:02
be afraid to move fast and look for
22:05
those strategic partnerships that make sense for your
22:07
own organization. I think fantastic
22:10
key takeaways and food for thought there. Diana,
22:13
really, really enjoyed this podcast. It's been an
22:15
absolute pleasure speaking to you, getting to know
22:17
you, and learning a little bit more about
22:18
Merrimack Health. I'd certainly love to catch up
22:20
with you again down the line. Thank you
22:21
so much.
22:22
Great. Thank you so much for having me.