Latest / Becker’s Healthcare Podcast / Carlos Bohorquez on UC San Diego Health’s Growth Strategy and Financial Priorities

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Carlos Bohorquez on UC San Diego Health’s Growth Strategy and Financial Priorities · Becker’s Healthcare Podcast

• 0:02
  - There's a small circle of people who truly
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  - understand what it takes to lead a health
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  - system right now. The decisions are enormous.
• 0:08
  - The variables are constantly shifting, and the stakes
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  - of getting a call wrong don't stay contained.
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  - That's not a complaint. It's a structural reality.
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  - And it's why the most effective c suite
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  - leaders are deliberate about where they go to
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  - pressure test their thinking.
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  - Becker's fourteenth annual CEO and CFO roundtable
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  - brings together more than 1,500
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  - executive level attendees
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  - and nearly 400 speakers for four days built
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  - around growth, financial sustainability,
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  - workforce strategy, and the leadership questions that don't
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  - have easy answers.
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  - Join us November second through the fifth in
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  - Chicago.
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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 Madeline with the Becker CFO and
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  - revenue cycle podcast, and I'm so excited today
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  - to be joined by Carlos Bor Borges,
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  - CFO of UC San Diego Health.
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  - Carlos, thanks for being on with me. Thank
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  - you, Madeline. Glad to be here.
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  - Amazing. So, Carlos, before we kick things off,
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  - do you mind sharing with myself and the
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  - audience just a little bit more about your
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  - background in health care and more at your
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  - time at UC San Diego Health?
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  - Thank you, Madeline. Glad glad I do that.
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  - Gosh.
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  - I've been doing this for almost, twenty eight
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  - years now. Yeah. I started I have a
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  - unique,
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  - unique unique background. Started in the for profit
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  - side on tenant. Spent
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  - about fifteen years on the consulting side. I
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  - worked for
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  - GE Healthcare,
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  - Capgemini,
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  - Ernst and Young, and then Kaufman Hall. And
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  - then over the last,
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  - almost ten years, I've been a sitting CFO
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  - for
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  - for health systems. So it's been a it's
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  - been a great journey.
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  - Oh, that's great. Can you share a little
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  - bit more about UC San Diego Health? Just
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  - the background on the system?
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  - We are,
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  - an academic health system based out of, San
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  - Diego, California. We're the only academic,
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  - health system in the community in the
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  - San Diego
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  - County area.
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  - We have three hospitals that are part of
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  - the system. Obviously, we work
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  - very close with our
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  - physician partners on the medical
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  - medical school side,
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  - and, we just recently,
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  - closed a joint powers authority with Palmar Health
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  - in North County,
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  - San Diego. They are a separate organization, separate
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  - management team, separate board,
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  - but through the, JP, we have agreed to
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  - to make some capital commitments towards,
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  - Palomar Health.
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  - On a, high level basis, about a $6,000,000,000
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  - organization from a revenue
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  - size of about 13,000,
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  - great team members.
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  - Incredible. I appreciate you giving that background. So
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  - actually, yeah, let's kick off there, with the
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  - that joint powers authority. So for our listeners
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  - who might not, you know, be up to
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  - tune here,
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  - in early July, UC San Diego Health and
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  - Palomar Health finalized this joint powers authority, and
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  - this created the Palomar UC San Diego Health.
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  - So, basically, I would love to hear any
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  - updates here just in terms of how things
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  - are going and maybe, you know, what has
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  - surprised you most from the finance side of
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  - things.
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  - It's it's going really well, and it's, the
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  - a lot of a lot of the,
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  - incredible work happened before, obviously, the to get
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  - into this place.
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  - What I think I can appreciate about, again,
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  - we're
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  - a month and a half into this,
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  - and what I what I can appreciate is
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  - the fact
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  - that both leadership teams
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  - are absolutely committed to ensuring that
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  - the the best care is provided to the
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  - residents of North County, that the preservation of
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  - services in that community,
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  - and that,
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  - we help, through a
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  - a joint conversation.
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  - We provide some level of expertise to their
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  - their management team,
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  - where possible
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  - to further,
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  - enhance the clinical services,
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  - to provide,
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  - stability from the financial standpoint.
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  - And, obviously, as I mentioned before,
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  - we've made a capital commitment in this group
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  - by by the regions of University of California
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  - last year
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  - to tune about a $160,000,000.
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  - This is the intent here is to ensure
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  - that
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  - certain key programs,
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  - are expanding that community.
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  - And, again, patients do not have to travel
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  - out of the community to seek
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  - higher level services. So,
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  - it's going very well and a lot of
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  - hard work ahead of us, you know, focused
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  - on
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  - on ensuring that we develop a good process,
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  - good plan moving forward,
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  - and that,
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  - at the end of the day, that community
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  - benefits from this, JPA.
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  - Yeah. For sure. Where do you hope to
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  - see this joint power authority
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  - in the next year even?
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  - I think the most important item would be
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  - to identify the
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  - the most important programs
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  - that need to be expanded, solidified,
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  - ensure that our resources,
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  - both from a, you know, a dollar standpoint,
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  - but also from a
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  - human standpoint, they get the most amount of
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  - attention over the next year. And that we
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  - start moving the needle
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  - across the board, whether it's quality, whether it's
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  - expansion of services,
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  - financial stability
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  - of the the enterprise,
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  - and,
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  - I'd say that would be the goal over
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  - the next twelve months.
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  - And could you share just to kind of
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  - piggyback off of that, you know, as you
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  - look at the system as a whole, how
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  - would you say
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  - the growth strategy at UC San Diego Health
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  - has evolved over even the last, you know,
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  - year or two?
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  - I've only been here about eight months. So,
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  - you know, I wanna make sure I don't,
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  - you know, speak out of turn. But Of
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  - course. What the the the most important item
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  - is, you know, in in the organization has
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  - grown
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  - tremendously over the last five, seven, ten years
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  - under Patty Patty Mancic's leadership, our our CEO.
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  - Right. It is, I would say, not a
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  - pivot away from what's worked.
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  - I would say it is
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  - ensuring that we
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  - we maximize
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  - the the assets that we've acquired. We acquired
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  - a what used to be we now call
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  - East Campus.
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  - This was a
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  - a hospital that was owned by by Prime
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  - Health about two and a half years ago.
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  - Now the JPA, which is, again, a separate
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  - organization,
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  - I would say the focus would be as
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  - far as the growth strategy that we maximize
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  - the pieces that we're adding to the
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  - the system, whether it's direct East Campus or
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  - sort of the indirect JPA with with Palmar
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  - Health. Mhmm. And, the focus is to to
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  - ensure that
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  - we have capacity for for all the services
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  - that are that are seeking within the system
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  - and ensuring that,
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  - we understand whether whether there's capacity across
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  - all the all the hospitals
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  - and ensuring that the services are
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  - are directed to one of those capacities so
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  - that no point
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  - we have patients that are not able to
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  - access the the great care our positions are
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  - able to offer. Right. So important there. And
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  - as you noted, you've been with the system
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  - for about eight months. So
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  - what has
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  - this whole, you know, Palomar Health,
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  - situation kind of taught you as a CFO?
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  - How have you learned from this? Because you
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  - jumped right in.
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  - Yes.
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  - Right right into a deep end. You know,
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  - I think the
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  - the biggest, I would say,
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  - of coming to a bigger organization from where
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  - I was before is, first of all,
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  - the issues are not that dramatically different
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  - here versus, say, let's say, $2,000,000,000 organization.
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  - We all struggle with things that that we
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  - know. Workforce shortages, position charges,
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  - inflation on expenses.
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  - But obviously, the magnitude, the complexity,
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  - it's higher, as you have a lot more
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  - the enterprise is larger.
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  - As far as the learnings,
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  - related to the JPA, it's a fine balance
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  - as far as,
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  - providing support to them
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  - and working with them, but also ensuring that,
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  - there's a very clear line between
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  - both organizations. They have they have a separate
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  - set of employees,
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  - separate leadership team, separate board.
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  - So we are absolutely,
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  - incredibly careful to ensure that we we respect
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  - that,
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  - the separation of both enterprises, but provide Right.
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  - Support,
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  - you know, guidance where possible and and any
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  - additional,
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  - I would say, thought leadership.
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  - Mhmm. No. For sure. Definitely a a good
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  - learning curve,
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  - but it sounds like you're handling it incredibly
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  - well.
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  - Where would you say are some of the
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  - biggest financial challenges that you are focused on
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  - just in the industry right now? As we
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  - touched on before the podcast, we were just
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  - chatting, and we were talking about how the
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  - industry has seen, you know, a lot. It's
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  - always changing. There's so much going on. So
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  - what are you most focused on, and what
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  - are you doing to try to combat some
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  - of these challenges?
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  - Well, and how how much time do you
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  - have? It's,
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  - there there is
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  - there is
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  - no no shortage of list. I mean, the
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  - the list is pretty extensive.
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  - I think the the most important items that
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  - are really
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  - top of mind for myself and and other,
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  - CFOs today that I speak with are
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  - the prospects of cuts for programs that have
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  - traditionally supported health systems that Right. Have provided
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  - care to indigent
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  - Medicaid population. Again, it's,
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  - the implementation of HR one Yeah. The the
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  - anticipated cuts to three forty b program
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  - to dish,
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  - the potential implementation
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  - of site neutral payments,
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  - those are things that, you know, I believe
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  - could be, you know, devastating to organizations like
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  - like our like like us and and others
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  - others across California
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  - and and the and the nation.
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  - What would you say are some things that
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  - your system is doing to kinda combat, you
• 10:06
  - know, the effects of HR one? I know
• 10:08
  - I actually spoke with Corwell Health CFO,
• 10:11
  - earlier,
• 10:13
  - today, actually, and mentioned similar,
• 10:15
  - you know, concerns to you just in terms
• 10:17
  - of HR one.
• 10:19
  - You know, of course, and he said they
• 10:20
  - have a plan in place, and, obviously, we're
• 10:22
  - gonna see the majority of of the pain
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  - from this, next year. But what what are
• 10:27
  - your thoughts there just in terms of how
• 10:28
  - you're trying to combat it ahead of time,
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  - essentially?
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  - It is,
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  - first of all, very careful planning, and it's
• 10:36
  - you know, and I apply this to both
• 10:37
  - HR one and three forty b and some
• 10:39
  - of the other items I mentioned.
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  - Planning as far as,
• 10:43
  - understanding the exact impact in terms of dollars,
• 10:46
  - in terms of potential margin loss.
• 10:49
  - So,
• 10:50
  - and and not only for fiscal year twenty
• 10:52
  - eight, we're we're right now in fiscal year
• 10:54
  - twenty seven, but for the next five to
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  - ten years. So planning as far as the
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  - overall impact
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  - by potential cut or or adjustment.
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  - And if that's and where we don't know,
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  - we're looking at we're doing, ranges.
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  - And then it's it is,
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  - incorporating those assumptions into our
• 11:13
  - our five, seven, ten year financial capital plan.
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  - Understanding
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  - what's the impact,
• 11:19
  - what are the
• 11:21
  - the needed resources throughout the enterprise as far
• 11:23
  - as capital, as far as,
• 11:25
  - you know, ongoing operating operation support,
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  - and understanding what
• 11:30
  - what that does. Can we afford the the
• 11:33
  - ask, obviously,
• 11:34
  - with these changes?
• 11:37
  - And then,
• 11:38
  - focus, execution, data. And I say focus is
• 11:41
  - understanding
• 11:42
  - what's the most meaningful
• 11:44
  - level we can pull on operations or
• 11:47
  - or capital or strategy.
• 11:49
  - We we need to make sure that,
• 11:51
  - the limited resource that all of us have
• 11:53
  - are are deployed to the
• 11:55
  - the most meaningful and most important
• 11:57
  - initiative or initiatives.
• 11:59
  - We're laser focused on execution.
• 12:01
  - Having a lot of meetings without results is
• 12:04
  - is basically
• 12:05
  - waste of time, so
• 12:07
  - we measure what's working, we measure what's not
• 12:09
  - working,
• 12:10
  - we, provide support for for programs or initiatives
• 12:14
  - or individuals that
• 12:16
  - are falling a little bit behind on initiatives.
• 12:18
  - And then at the end of the day,
• 12:20
  - we need to make sure that we make
• 12:22
  - decisions based on data.
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  - That we're nimble, even though we're a very
• 12:25
  - large organization.
• 12:26
  - We're nimble as far as, making decisions, but
• 12:29
  - obviously these decisions are bay are based on
• 12:31
  - data
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  - and, thorough analysis.
• 12:35
  - Yeah. No. Well, again, it sounds like your
• 12:36
  - planning is is quite thorough, and it's it's
• 12:39
  - honestly the right way to do things right
• 12:40
  - now, you know? Just plan ahead as much
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  - as you possibly can.
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  - Expect the unexpected, you know.
• 12:46
  - Thank you. Yeah. And and,
• 12:48
  - and do a lot of sensitivities on it
• 12:49
  - and understand what what's the magnitude of, you
• 12:52
  - know, the high, low, medium.
• 12:54
  - For sure. And then I guess on the
• 12:56
  - flip side, what are some areas that, you
• 12:58
  - know, you're most excited about? Or where are
• 13:00
  - you placing some of your biggest bets in
• 13:02
  - this year and maybe even into next year?
• 13:05
  - It is our people. And we, you know,
• 13:06
  - we we talk about
• 13:08
  - the challenges, but,
• 13:10
  - we always say this in the organization. We
• 13:13
  - can't,
• 13:14
  - forget the the incredible
• 13:16
  - services that our physicians provide, that our clinicians
• 13:19
  - provide, that our that our people within the
• 13:21
  - organization.
• 13:23
  - So I would say focusing on our people,
• 13:26
  - the terrific care, quality, and everything that we
• 13:28
  - provide at I don't know if you just
• 13:30
  - saw The
• 13:31
  - US and World News release just released their
• 13:33
  - their annual rankings of of hospitals.
• 13:36
  - We're tied for the number one
• 13:39
  - place in California, obviously, with
• 13:41
  - with four other amazing organizations.
• 13:44
  - We're sixteenth in the nation, and,
• 13:47
  - this is, really a tribute to the leadership
• 13:50
  - of of this organization, Patty, as I said,
• 13:52
  - our chancellor,
• 13:54
  - and the many, many
• 13:55
  - incredible physicians, and now it's the sports staff
• 13:57
  - that
• 13:58
  - goes along with that. So
• 14:00
  - we need to, and we are placing our
• 14:02
  - bets on the great services we provide to
• 14:04
  - this community. And even
• 14:06
  - far beyond the community, we
• 14:09
  - individuals that travel from out of state, out
• 14:11
  - of county, and in many cases, out of
• 14:13
  - the country
• 14:14
  - to seek the care of our physicians. And,
• 14:17
  - we just need to do more of that,
• 14:19
  - ensure that we support them
• 14:22
  - in the best way possible, and,
• 14:24
  - take advantage of of what we have.
• 14:27
  - Yeah. Well, again, I really appreciate you, doing
• 14:31
  - this podcast with me, Carlos. It's been such
• 14:33
  - a pleasure getting to speak with you, learn
• 14:35
  - more about UC San Diego Health and all
• 14:37
  - the exciting things going on there. And,
• 14:39
  - I know you've been in your role for
• 14:41
  - about eight months, but congratulations again on the
• 14:43
  - role and, excited to connect again down the
• 14:45
  - line.
• 14:46
  - Thank you, Madeline.
• 14:47
  - Amazing. Thank you.