Latest / Becker’s Healthcare Podcast / Expanding Neighborhood Hospitals to Improve Access and Affordability in Healthcare with Vic Schmerbeck

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Expanding Neighborhood Hospitals to Improve Access and Affordability in Healthcare with Vic Schmerbeck · Becker’s Healthcare Podcast

• 0:02
  Every year, Becker's annual meeting brings health care
• 0:04
  leaders together to unpack the most pressing issues
• 0:07
  facing the industry.
• 0:08
  And every year, those conversations shift in profound
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  and unexpected ways.
• 0:13
  This April, more than 3,500
• 0:15
  healthcare executives will return to Chicago
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  for Becker's sixteenth annual meeting.
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  Seven ninety five elite speakers will offer new
• 0:23
  lessons, new case studies, and predictions about what
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  comes next. Join us April 13 through the
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  sixteenth.
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  For the agenda and event details,
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  visit beckershospitalreview.com
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  and click on the events tab in the
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  upper right.
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  This is Scott Becker with the Beckers health
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  care podcast.
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  I'm I'm thrilled today to be joined by
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  a a leader, a CEO, Vic Schmerback.
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  And Vic and Emerus Health, Emerus Holdings
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  have helped to solve one of the most
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  critical problems in health care, and they've had
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  this tremendous growth trajectory over the last decade
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  or so. We're gonna talk to Vic about
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  how they've done that, what they do,
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  where they see themselves fitting into the health
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  care ecosystem,
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  and and why the market's been so responsive
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  to what they do and how well it's
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  going. Vic, can you take a moment and
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  introduce yourself and tell us a little bit
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  about Emerus?
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  Sure. Thanks for having me, Scott. It's great
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  to be here today.
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  So as Scott said, I'm CEO of Emerus.
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  Emerus partners with leading health systems,
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  around the country to co own, manage, and
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  operate
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  small format health care facilities. We like to
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  call them neighborhood hospitals.
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  They're typically located in underserved
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  kinda suburban community settings.
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  And in the vast majority of the cases,
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  when we partner with our health systems,
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  we're bringing a broader suite of services from
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  an ambulatory standpoint as well. So think primary
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  care, specialty care, pediatrics,
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  women's services,
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  outpatient
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  rehab,
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  PTOT clinics.
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  And more recently,
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  our partners are looking at adding ambulatory surgery
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  centers and,
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  even cancer focused services, getting those
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  those care settings closer to communities and where
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  people, as we say, kinda work, live, and
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  play.
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  The original business was founded by a handful
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  of physicians really with a a pretty simple
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  task, which was looking for a better care
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  environment, not only for patients but caregivers.
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  And as you alluded to over just about
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  a decade ago, we really started partnering with
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  health systems and
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  really isolating into
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  access and affordability
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  as we think about care settings. Just to
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  give you a couple of context,
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  look. We've been really blessed to have great
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  partners
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  like Baylor Scott and White, Common Spirit, Ascension,
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  Baptist Health,
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  Hospitals of Providence.
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  We are kinda all throughout Pennsylvania now with
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  ChristianaCare,
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  WellSpan Health,
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  Allegheny Health Network, and the like.
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  But to give you a couple of points
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  of reference, on average, people in The US
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  travel thirty minutes for care.
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  In our setting, it's eight minutes
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  on average.
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  And when they walk into our building, they're
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  seen they're seen by a physician
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  in a room, not a waiting room, inside
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  of fifteen minutes.
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  And so it's bringing care closer to home.
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  It's providing
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  access
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  and we believe driving affordability
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  as well.
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  And and and, Vic, at a time where
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  average wait times in ERs
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  have moved from you know, they were advertising
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  thirty minutes a decade ago on billboards, get
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  into every year in thirty minutes. Now the
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  average wait time in a health system ER
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  might be three hours, you know, in in
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  many places become the access point for so
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  many people.
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  You're also seeing throughout the country, so many
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  small and mid sized hospitals in smaller communities
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  really struggle financially. We're at a spot where
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  60% of health systems have some margin,
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  40%
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  are are not making any margin at all.
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  Talk about how critical it is, what Emerus
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  does,
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  and how it fills that sort of gap
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  in the ER market and plus the neighborhood
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  hospital market. I mean, how important is it
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  that what you do?
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  I'm biased, obviously,
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  but I think I think it's really important.
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  I think action often speaks louder than words,
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  Scott. And so and really every market we're
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  in
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  with the partners I named,
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  we're adding locations today.
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  So the part the health systems are really
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  seeing the value. And I do wanna distinguish
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  one thing for anybody that's listening. Every facility
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  that we co own and operate with our
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  partner is branded our hot our health system
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  partners. Branded Baylor Scott and White. It's branded
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  WellSpan Health.
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  And we're integrated on EMR from a patient
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  record
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  perspective.
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  But in the our our ultimate goal is
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  to get the right care to the right
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  place at the right time. And so many
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  of those people that are waiting three hours
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  in an ER in a downtown
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  facility don't need to be at that level
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  one trauma center. If they do need to
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  be there, we can capture them in their
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  community.
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  We can treat the vast majority of their
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  services.
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  If they need a super high end oncological
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  cardiac
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  neuro, you know, something more significant,
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  we directly admit them to our partner. It's
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  a unified EMR. It's a direct admission.
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  So you're capturing more in the community,
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  and we're leveraging technology heavily to do that
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  for on the affordability side.
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  And so there's there's a decompression aspect to
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  to the wait times you're talking about by
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  providing better access.
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  Let me ask you this question. When Emerus
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  really got started and you mentioned the sort
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  of the origin story of a few physicians
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  trying to work with this, it was sort
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  of an out of the box concept of
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  sort of freestanding
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  ERs, freestanding small hospitals.
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  Then I remember several years ago me being
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  on the phone with some health care system
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  leaders in, I believe it was West Virginia,
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  partnering with, I thought, you folks to to
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  build some short stay out of hospitals. And
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  and I was it was really eye opening
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  to me how much what you had started
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  with has evolved to be something that Celsius
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  was viewed as a really important
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  positive
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  impact. Are you ever
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  surprised
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  at the amount of growth that you've seen
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  in in the market reception to what you've
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  done?
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  I'd
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  look. I I think we provide an incredible
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  service,
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  and it's not to say that big health
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  systems can't do this on their own. I
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  think what they find in partnering with us
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  is that they have a turnkey
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  solution, someone that's gonna deploy capital with them,
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  someone that understands how to operate, manage, someone
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  who understands where to, you know, locate facilities
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  for the right reasons.
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  But there's a lot of opportunities for
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  health systems, and I think is I think
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  we're gonna talk about trends here in a
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  minute potentially. But,
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  know, this whole notion of access and affordability
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  is very, very real.
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  And you mentioned, you know, profitable or unprofitable
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  from a health system standpoint.
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  We as a as a, I think, health
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  care community have to figure out how to
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  drive better access
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  and lower cost.
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  And so I think
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  we have a very without going into a
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  ton of details, we have a very team
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  oriented approach inside of our building.
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  It's a very you know, it's a 16
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  to 22,000 square foot facility. It's very efficient.
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  And so I think it's it's driving
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  patient experience to a higher level. It's driving
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  readmission rates lower. It's driving better clinical outcomes.
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  But most importantly, it's getting the patient to
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  where they can and should be served
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  instead of where they don't necessarily need to
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  be.
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  Right. To where they would default to otherwise
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  if they can't get into the regular doctor's
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  office and they end up in the ER.
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  And so instead of that, you're at this
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  middle point where they're really effectively and efficiently
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  sort of taken care
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  of. Talk for a second about trends that
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  you're watching. As we talk about the AAA
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  often,
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  cost, quality, access in in many part of
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  the countries, that is just going in the
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  wrong direction on all three. It used to
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  be common knowledge or common wisdom, I should
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  say, not knowledge, that you could do really
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  well in two out of the three, but
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  you track to verify something. Now it feels
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  like costs are going up throughout the country,
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  access is getting worse, quality becomes more challenging
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  as access points are limited and were limited
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  on doctors and and physicians.
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  What trends are you watching, and and how
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  does this start help offset some of those
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  trends that are so challenging?
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  I think broadly, everyone understands we need to
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  transform the health care landscape.
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  And you're seeing a big move to outpatient.
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  We've been on this path for a couple
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  of years. How do we get care closer
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  to home?
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  It's been central to everything we've done for
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  the last decade in terms of creating access
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  points.
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  We're leaning further into expanding our clinical capabilities
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  with technology
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  and,
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  care solutions that we think can drive more
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  not not I don't mean more utilization
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  in the wrong way,
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  but
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  taking care of patients in a lower cost
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  setting with a better outcome and experience,
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  closer
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  to to home.
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  It's been interesting to me. I've been at
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  a number of, you know, CEO councils, forums,
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  JPMorgan, what have you. You can't really get
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  five minutes into a discussion without AI, and
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  then it quickly kinda goes to access and
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  affordability.
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  And on the cost side, you know, I
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  think there's a prevailing wisdom that
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  we can take cost out of the system
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  with technology
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  and and AI.
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  Most of it today is kind of the
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  back end. It's you know, eventually, it will
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  come,
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  I I believe, in the clinical
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  setting. But just efficiency of care, we've been
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  able to drive
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  lower length of stay. CMS reports something that
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  get too far in the weeds called geometrically
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  mean length of stay, meaning the same patient
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  set. And we're seeing 35, 40% reductions in
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  length of stay
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  in our observation and inpatient side. That drives
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  lower cost.
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  Just remarkable. And and take a second, Vic.
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  When you look at this coming year, I
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  we're gonna talk for a second about where
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  you're most focused and also about leadership. You
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  spend a lot of time
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  talking and thinking about
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  how to be an effective leader and what
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  what you do as an effective leader. Let's
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  start there for a second.
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  When you talk to emerging leaders,
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  what advice would you give to emerging leaders
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  about being effective leaders?
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  I'm a pretty keep it simple stupid kinda
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  guy, Scott,
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  as you probably know. But
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  I think the number one thing for evolving
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  leaders, whether it's your middle managers,
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  your senior leadership team, your executive leadership team,
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  or someone that's try you know, stepping into
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  a CEO role,
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  is you've gotta build your team with smarter
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  people than you. And then you have to
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  invest in them from a coaching and leadership
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  development standpoint.
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  I think it's really imperative that you set
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  very clear strategic direction and don't bounce around,
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  and then you go let them fly.
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  Right? And so I'm a firm believer
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  that the number one job of a CEO
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  or a leader is to find and nurture
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  talent.
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  Take a second, Vik. You said something I
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  think is so important.
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  You talked about
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  setting clear direction and not constantly bouncing around,
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  and you see so many leaders that are
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  constantly chasing the next opportunity, the next this,
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  the next that.
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  How disruptive is that for a team in
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  leadership when there's not clarity about here's what
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  we're trying to do. Here are the three
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  big goals this year, whatever the numbers they
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  are. How important is that not to be
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  bouncing around and constantly pivoting?
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  I I believe it's probably the I mean,
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  it is critical.
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  Using a football analogy,
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  if you constantly move the end zone, nobody
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  knows where to run a play.
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  And so
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  you have to set a clear direction,
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  and you have to be my at least
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  in my opinion, you have to be myopically
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  focused on making sure you're not chasing squirrels
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  in the middle of the game.
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  No. I I think that's right on. And
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  and take one more moment, Vic. We're so
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  thrilled for you to be with us today.
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  I've loved watching the growth of Emeritus. Just
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  remarkable.
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  Take a second on what are you most
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  focused on and excited about for the rest
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  of this year for 2026?
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  I think there's a number look. The
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  I'm most proud of our leadership team and
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  and what we've built over the last handful
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  of years. We've had a lot of growth
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  significant growth. I refer to it as good
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  growth internally.
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  Not all growth is good growth,
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  if that makes sense.
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  And so we've really focused on team orientations.
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  Our teams take a great pride
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  in serving their neighbors, and we kinda often
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  use this our mission statement is providing the
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  care patients need
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  in the neighborhoods they live by teams they
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  trust.
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  We all we oftentimes narrow that down to
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  neighbors
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  treating neighbors,
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  if you think about a community based setting.
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  And so we've taken a lot of pride
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  in growing our team and our leadership team
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  to accomplish those goals. Now
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  that's affected itself in the sense that we've
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  more than doubled the business over the last
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  three or four years, you know, on almost
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  any metric you wanna look at.
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  So that's what I'm most proud of.
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  When I look ahead, we continue to invest
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  heavily, Scott, in expanding clinical capabilities and leveraging
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  technology, be it virtual nurse support for admission
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  and discharge,
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  be it bringing incremental specialist into the setting
• 13:38
  to provide better, more efficient timely care. But
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  our goal at the end of the day
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  is we want our bedside caregivers to spend
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  90% of their time on taking care of
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  a patient, not 50% of their time on
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  administrative
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  tasks.
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  And what does it look like? You mentioned
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  neighborhood care, neighbors taking care of neighbors, being
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  in the communities.
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  How hard is recruitment today of physicians? And
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  and is that a bottleneck, or are you
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  how are you managing that?
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  Look. Recruitment,
• 14:09
  we focus a lot on retention. I mean,
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  you have to focus on recruitment to, you
• 14:13
  know, get people in the door.
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  We've done a lot of things, God, given
• 14:17
  our format is a little bit different that
• 14:19
  we won't hire someone, like a nurse, for
• 14:22
  example, if they don't shadow shift first. We'll
• 14:24
  pay for them to shadow shift, but we
• 14:26
  want them to experience the environment,
• 14:28
  the team orientation, how we do cross training
• 14:31
  so that they have we have eyes wide
• 14:34
  open, they have eyes wide open as it
• 14:35
  relates to working in kind of the environment
• 14:38
  that's a little different than a bigger hospital.
• 14:41
  And I think what you'll find is whether
• 14:43
  it's physicians or nurses or techs or go
• 14:46
  down the list of allied staff,
• 14:49
  it works really well for many. If you
• 14:51
  wanna be you know, if you're inclinated to
• 14:54
  be an ICU trauma nurse only and that
• 14:56
  you wanna do it every day or you
• 14:58
  wanna read MRI every day,
• 15:01
  it may not be the right place. But
• 15:02
  that's what we have to figure out together
• 15:05
  on the front end.
• 15:06
  And then ultimately, you invest in them from
• 15:09
  a clinical development. You invest in them from
• 15:11
  a career development. You find out who wants
• 15:13
  to be a leader, who's happy where they
• 15:14
  are, then you develop plans for them,
• 15:18
  to stay with the organization,
• 15:20
  such that we're not
• 15:22
  recruitment becomes a function of not retaining. And
• 15:25
  so we'd we have to do a better
• 15:27
  job of retaining
• 15:30
  to ensure that recruitment doesn't become your your
• 15:33
  headwind.
• 15:34
  A 100%. If you could do a much
• 15:37
  better job, everybody, not you, but in general
• 15:39
  on retention,
• 15:40
  then you're not constantly on this flywheel of
• 15:42
  trying to recruit. And and and like you
• 15:45
  talked about, constantly being at that. So you're
• 15:47
  always recruiting,
• 15:48
  but but, hopefully, you you make it a
• 15:50
  little bit more
• 15:52
  easy to work through and and to keep
• 15:54
  stability and so forth by by really focusing
• 15:56
  on great retention and great hiring. The the
• 15:58
  one thing I would add to that on
• 16:00
  the technology front, I didn't get into it
• 16:03
  specifically, but we've invested heavily in making our
• 16:06
  our rooms smart rooms
• 16:08
  so that we can leverage techno you know,
• 16:10
  if we need a cardiology consult, if we
• 16:12
  need an infectious disease consult, we need a
• 16:14
  critical care consult,
• 16:15
  we can bring those physicians in
• 16:19
  via the smart room
• 16:21
  with the care team that's on-site
• 16:23
  to make that assessment from both the timeliness
• 16:26
  and and, clinical outcome standpoint to better that
• 16:30
  care,
• 16:31
  which also allows you, frankly, to bring in
• 16:34
  a family member that may be in Florida
• 16:35
  with somebody who's being treated in Dallas, and
• 16:38
  they can be part of that care setting
• 16:40
  even though they're not in the room.
• 16:42
  It's phenomenal. It's a it's a I it's
• 16:44
  been amazing to me to watch the growth
• 16:46
  of Emerus and what you've done in terms
• 16:48
  of leadership, Vivek. I I wanna thank you
• 16:50
  for taking a few minutes with us to
• 16:51
  say on the Becker's Healthcare podcast.
• 16:54
  It's a remarkable story and remarkable you're really
• 16:56
  filling a critical gap in healthcare. So so
• 16:59
  thank you so much for what you do
• 17:00
  and for joining us today. Absolutely. Always good
• 17:03
  to see you, Scott.