Latest / Becker’s Healthcare Podcast / Strengthening Community Health Through Strategic Growth

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Strengthening Community Health Through Strategic Growth · 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
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  hospital and health system executives and nearly 800
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  speakers to Chicago April.
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  This series 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,
• 0:23
  visit beckershospitalreview.com
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  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.
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  This is Laura Dierda with the Becker's Healthcare
• 0:34
  Podcast. I'm thrilled today to be joined by
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  Peter Banco, president and CEO of Baystate Health.
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  Peter, it's a pleasure to have you on
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  the podcast today.
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  Thanks, Laura. Thanks for, having me today.
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  Absolutely. I know we've,
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  spoken in the past. You're, you know, a
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  great regular contributor here for us at Becker's,
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  and so, it's always a pleasure. But for
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  those who maybe are just joining the podcast
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  or just have just subscribed,
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  can you tell us a little bit more
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  about yourself and, Baystate Health?
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  Yeah. Peter Banco, CEO of Baystate Health. I've
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  been here a little over
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  eighteen months. Only the fourth CEO in the
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  organization's
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  history.
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  I think I'm entering my
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  fourth decade in in health care
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  and and third decade as a CEO.
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  Baystate's
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  true integrated delivery system
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  in Western Mass. We're headquartered in Springfield, the
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  home of the Basketball Hall of Fame.
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  We're about 3 and a half billion in
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  revenue,
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  13,000
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  incredible team members,
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  four hospitals, plus in
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  one of our academic medical center has a
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  children's hospital,
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  a health plan, and in an unrivaled provider
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  network of 1,300
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  physicians and APPs that are employed.
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  We've been rooted here
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  for a hundred forty years
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  formed by a pioneering merger, one of the
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  first ones, before m and a was a
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  real thing in the seventies, and we've served
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  here consistently as a safety net system helping
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  generations thrive here.
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  You are our brand is really about making
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  our communities health, our mission,
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  delivering compassion, equality,
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  and accessible care for all.
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  That's amazing to hear. And, you know, such
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  an important mission in in place that, you're
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  in and what history you've gotten to, you
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  know, with the community still involved,
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  with their hospitals and system.
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  Now I'm curious. In thinking about the last
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  year or so, what is the initiative that,
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  you're most proud of? What did you do,
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  and what what were the results?
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  Yeah. I think our big biggest
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  success in my first year was a tremendous
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  work in a short period of time to
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  stabilize our financial performance. And
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  we've really gotten ourselves on a hockey stick
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  trajectory moving forward. So we finished, the year
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  with a positive our operating margin for the
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  first time in several years,
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  exceeded budget,
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  for the first time in six years.
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  S and P affirmed our a rating with
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  a stable outlook.
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  And,
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  but I'm most proud of it. You know,
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  getting back to a profitable
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  place. It's it's afforded us to reinvest,
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  back into the organization
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  this next year. So
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  we really invest 75%
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  or seventy six five cents on the dollar
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  back into the organization, and then the other
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  25¢ are used to pay off our debt
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  and rebuild our cash in the bank. But,
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  you know, it's a unsafe world these days,
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  so we've we're making major security enhancements for
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  our staff. We're starting the planning for a
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  new electronic medical record and ERP system.
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  We're investing in some some of our gross
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  service lines as part of a new strategic
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  plan.
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  We're planning a, starting the planning already for
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  a new ER at our base state Noble
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  campus.
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  We're building a new community health center for
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  for Medicaid and uninsured in Springfield, the partnership
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  with MassMutual.
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  And
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  we're developing a
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  primary care and convenient care clinic in a
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  community where we had closed the hospital almost
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  ten years ago.
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  So
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  health care desert were going back after ten
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  years and investing back in the community, and
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  that's exciting.
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  That is great to hear. And, you know,
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  it's so, incredible, especially
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  at a time when many other hospitals and
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  systems are, you you know, thinking about contracting
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  services in one way or another. Having those
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  service line growths and then reopening a hospital,
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  is really encouraging.
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  What's that process been like? How have you,
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  really navigated,
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  from the leadership executive side as well as
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  just kind of continuing to, inject that type
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  of energy and enthusiasm with the broader teams,
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  throughout the organization.
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  Yeah. Our you know, we used our strategic
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  planning process last year over the course of
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  about six months to
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  look at ourselves, what's worked, what what's been
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  our historical success formula, where do we wanna
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  go, what predictions we're making about the future.
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  And our our you know, we had three
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  quarters of our physicians
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  over almost 2,000, three quarters of them showed
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  up for at least a four hour
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  session once in a strategic plan, which is
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  rare. So our board, our physicians, our leadership,
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  you know, set some stakes in the ground.
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  Like, we're we're the safety net hospital. We're
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  an academic system. We're integrated. We're gonna keep
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  our health plan.
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  We're not gonna cut services. You know? So
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  as others are looking at behavioral health and
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  women's services
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  and trauma and all those pediatrics,
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  you know, if if we don't do it
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  in the community, no one else will. So
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  we really grounded ourselves in mission and values
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  and
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  a sense of community.
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  You know, so many.
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  My assistant had her her mother worked here.
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  Her kids work here. There's just gen we
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  we care for generations here. And so using
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  those as touchstones has really been able to
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  elevate what we're doing both this past year
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  and then going forward.
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  That's helpful to understand. Thank you for digging
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  a little bit deeper there. Now looking ahead,
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  what are some of the big priorities and
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  headwinds on your mind for 2026?
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  Yeah. Our headwinds are here are largely structural.
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  In Western Mass, we've got little to no
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  population growth like most of the Northeast in
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  New England.
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  More than 70%
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  government pay. So we're 48%
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  Medicare,
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  22%
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  Medicaid at the moment,
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  with bad debt and charity care growing by
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  about 8% a year. So, you know, sitting
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  still, our revenue will grow by two to
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  3% while our expenses are going to six
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  to seven. So
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  not a great recipe for success.
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  So we've got four strategic priorities, but two
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  are really key to talk about here. One
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  is actually this morning,
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  I helped launch our high reliability
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  organization, HRO journey.
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  We had
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  about 40 people. Our design team come together
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  for the first time to
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  I call it the design the Bay State
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  way to impact quality, safety, experience of our
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  patient care,
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  and our start our journey to zero harm.
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  And that's why we're here after all. That's
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  what our family, friends, and neighbors expect when
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  they get care here.
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  And then at the same time, we're accelerating
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  our cost transformation. So this year, we're talking
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  about a 130,000,000
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  in bottom line improvement.
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  We're literally turning over every stone. So
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  we've got ongoing work with management span control
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  and corporate overhead. We're doing significant work in
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  rev cycles, supply chain, pharmacy,
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  external spend. We're looking hard at our physician
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  academic and community physician enterprise,
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  doing a lot of work in care management,
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  hospital throughput,
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  and lots of work in nursing, really. One,
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  primarily to better support our nurses, but then
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  be more efficient at the same time. So
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  we're piloting a fight our first set of
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  well,
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  we had virtual nursing.
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  It didn't go so well before I came,
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  so we're repiloting
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  two different
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  two distinct pilots, one in our community hospital,
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  one in our academic senate center later in
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  the, this year. So
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  just some exciting stuff around both costs and
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  then impacting patient care.
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  That's helpful to understand. And, you know, that,
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  balance or or that challenge of,
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  expenses rising faster than than revenues in many
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  ways,
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  is mirrored throughout the country. And so it
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  was helpful to look and hear how you
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  really are refocusing the team,
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  in thinking about growth
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  in in in continuing to evolve and develop
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  access points in the future. What do you
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  think the hardest thing that you'll have to
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  do in the coming year will be? Oh,
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  yeah. I think like everybody else preparing for
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  the impact of the one big beautiful bill
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  to both us and the community.
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  You know, we've worked so hard since the
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  sixties to expand coverage and and and Massachusetts
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  governor
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  Mitt Romney led the work here to cover
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  so many people.
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  And,
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  really, we've been thinking as how of health
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  care as a right, and I think one
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  big beautiful bill for me undoes all that
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  work.
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  It's the single largest impact to health care
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  in our lifetimes.
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  And we're talking 1,000,000,000,000 to our industry
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  with a t.
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  More than 150,000,000
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  to Baystate health alone.
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  Our state budget starting next October has a
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  4 to $5,000,000,000
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  impact.
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  So they were asking the court working with
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  state leaders and our peers like how do
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  states and health systems
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  close the gap? Right? We're gonna see,
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  impact from uninsured from Medicaid and ACA,
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  decrease in funding with provider taxes and wave
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  waivers, cost sharing for Medicaid
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  as if the poor and vulnerable need to
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  contribute more. And I think the piece that
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  bothers me the most is,
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  and and I've said it in some community
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  forums the last couple weeks. Like, how do
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  we look our neighbors in the eye with
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  a straight face and tell them that, you
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  know, 25%
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  or more of you aren't gonna have coverage
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  anymore?
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  So you're pregnant, but you're not gonna have
• 10:06
  you're not gonna have insurance when you deliver.
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  Or you're in the middle of cancer treatment
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  that's gotta stop because you can't pay for
• 10:12
  it anymore. Or
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  you're working through mental health issues, and you're
• 10:16
  not gonna have
• 10:17
  coverage to be able to do it. And
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  and then just say good luck. Like, you
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  can't that's that community piece.
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  And broader than that, I've been trying to
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  tell folks everybody is impacted, not just the
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  most poor and vulnerable. So
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  overcrowding already crowded ERs,
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  delays in care until it's your
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  your condition's too serious. You know, I talked
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  about our board leadership has drawn the line.
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  We won't do it, but I think we'll
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  see service closures of nonprofitable
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  services in in some parts of the country,
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  facility close closures. And I and, you know,
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  we own a health plan. We're telling
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  we're telling the business community, if you have
• 10:54
  commercial insurance, you're gonna you should expect double
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  digit increases in your premiums each of the
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  next five years as a result.
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  You know, for us at Baystate, that one
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  forty five is really the work we did
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  last year to improve our financial performance. And
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  this year, it wipes it out in
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  one fell swoop, and we have to start
• 11:11
  all over again to make sure we've got
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  the money to
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  to do what we need to do going
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  forward. So
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  we're we spend a lot of our time
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  as a senior team and board thinking about
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  how do we prepare for what's coming.
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  Absolutely. And I I think you wouldn't be
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  alone. I mean, there's just so much,
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  so many of those factors converging, and I
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  know it seems like in many cases,
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  the patient groups that need the most care
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  continue to grow, and the demand for care
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  continues to grow.
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  So
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  it's helpful to think about all those issues
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  and all the things that are, coming together
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  and, you know, make a a big impact.
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  I know we've talked in the past about,
• 11:53
  the health plan, the Bay State owns and,
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  you know, how that,
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  is taking
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  a a different level of position, and of
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  importance within your broader strategy.
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  How do you see, you know, growth and
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  development over the next year,
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  occurring from the system side and in broader
• 12:09
  organization?
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  And, you know, I got you brought up
• 12:13
  the health plan. We we see one of
• 12:14
  our growth engines is our health New England
• 12:16
  health plan in Baystate operating as one system,
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  one way of doing things, and our health
• 12:22
  plan and our providers working more closely together,
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  which is which is started. You know, our
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  physicians are really excited about,
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  hey. How do we
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  how do we double down on value based
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  care and puppy population health? How do we
• 12:36
  accelerate access for our members? How do we
• 12:39
  reduce friction between providers,
• 12:41
  members, and the health plan? How do we
• 12:43
  grow Medicare Advantage and commercial membership?
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  I think that also gets to on the
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  provider side, our
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  top three issues are access, access, and access.
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  So like so many systems, it's difficult to
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  access our providers.
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  And, unfortunately, as we're doing our strategic plan,
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  we use we lose a lot of people
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  in Western Mass
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  to to Boston because it's, if you can
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  get in in three months versus six, you're
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  gonna go there. So we're really focused in
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  on improving access to our physicians and advanced
• 13:15
  practice providers.
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  Like everyone, we don't have enough providers and
• 13:19
  can't recruit fast enough. So
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  we're looking at leveraging better processes and systems,
• 13:25
  digital, virtual AI.
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  And I would say the last well, we're
• 13:30
  doing a lot of work in hospital throughput
• 13:31
  in the ER, surgery, length of stay.
• 13:34
  We're trying to decant volume from our 800
• 13:37
  bed academic medical center to our community hospitals,
• 13:40
  decant traditional things that have been done in
• 13:44
  the in the big box to ambulatory care
• 13:46
  settings. And I would say the last piece,
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  like a lot of other systems, we also
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  think mergers, acquisitions, partnerships
• 13:53
  are a major opportunity for us moving forward,
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  health plan, acute care, ambulatory, or physician groups.
• 14:01
  So I'd say if you're out there listening
• 14:02
  and thinking the same thing and your values
• 14:05
  align,
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  let's talk because,
• 14:09
  scale and scalability are gonna become really far
• 14:12
  more important than they have been in the
• 14:13
  past.
• 14:15
  I love that. Peter, thank you so much
• 14:16
  for joining us on the podcast today. This
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  has been such a
• 14:20
  fantastic conversation, and I'm looking forward to seeing
• 14:22
  you in person at our annual meeting as
• 14:24
  well in April. I know you'll be speaking
• 14:26
  there, and it's always great to to see
• 14:27
  you and hear from you. And, stay tuned.
• 14:30
  I've got a book coming out in May,
• 14:31
  so we can talk about that in the
• 14:32
  next couple months.
• 14:34
  Oh, wonderful. Absolutely. Yes. I'll be looking forward
• 14:36
  to is it on preorder now?
• 14:38
  It starts on preorder, I think, March 1.
• 14:41
  Yeah. May 12, it'll hit the streets.
• 14:44
  Fantastic. Well, congratulations on the book, and be
• 14:47
  very much looking forward to seeing you then.
• 14:49
  Thanks, Laura.