Latest / Becker’s Healthcare Podcast / Mandy Eaton, PhD, President and CEO of Memorial Health

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Mandy Eaton, PhD, President and CEO of Memorial Health · Becker’s Healthcare Podcast

• 0:01
  - The payer provider relationship has never been simple,
• 0:04
  - but what's happening now is something different.
• 0:07
  - Value based models are maturing unevenly,
• 0:10
  - prior authorization
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  - reform is reshaping workflows on both sides, and
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  - affordability pressure is intensifying.
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  - The organizations that figure out how to collaborate
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  - genuinely, not just contractually,
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  - are the ones that will set the terms
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  - for what comes next.
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  - Becker's fifth annual fall payer issues round table
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  - brings together more than 500 executive level attendees
• 0:30
  - and 70 plus speakers for two days of
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  - focused senior level conversation
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  - on benefit design, network strategy, transparency,
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  - and the financial and regulatory dynamics that are
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  - redefining how care gets paid for. Join us
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  - November second and third at the Swiss Hotel
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  - Chicago.
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  - For the agenda and event details, visit beckerspayer.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 Kristen Kuchno with the Becker's Healthcare
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  - podcast.
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  - And today, I'm joined by doctor Mandy Eaton,
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  - president and CEO of Memorial Health. Doctor Eaton,
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  - thank you so much for being here.
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  - Thanks, Kristen. It's it's it's a delight to
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  - be chatting with you today.
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  - Could you introduce yourself and share a bit
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  - about your career journey and how it led
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  - you to become CEO of Memorial Health? Yeah.
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  - Sure. Sure thing. So so I'm Mandy Eaton,
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  - president and CEO of Memorial Health, as you
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  - said.
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  - We're an almost $2,000,000,000 health system headquartered in
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  - Springfield, Illinois.
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  - I've been with Memorial for about a year
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  - and a half now. This is my first
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  - role as a CEO.
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  - I guess as it relates to my career
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  - journey,
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  - I probably took a less traditional path to
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  - becoming a health system CEO than you would
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  - typically see.
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  - My career started in human resources for a
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  - regional health system in North Carolina,
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  - but I didn't start in human resources because
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  - of my background and training.
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  - I actually trained in public health and health
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  - policy in college and and studied health care
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  - administration.
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  - But I landed in human resources with that
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  - health care organization
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  - because I was fascinated
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  - by the people side of the business,
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  - the teams,
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  - the relationships,
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  - and really what makes organizations
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  - successful.
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  - And over time, I had opportunities to take
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  - on broader responsibilities
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  - across
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  - operational roles,
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  - strategy,
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  - projects, leadership development,
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  - and ultimately spend a lot of time on,
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  - culture.
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  - And each role taught me that great health
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  - care organizations
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  - succeed
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  - when they align people
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  - to purpose and purpose to performance, and that's
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  - ultimately what makes a really strong culture.
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  - I'd say what drew me to health care
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  - was the mission. You know, every decision we
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  - make ultimately impacts a patient,
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  - a family member, or community, and and that's
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  - incredibly meaningful work. And so when I joined
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  - Memorial Health, I saw an organization
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  - with a really strong legacy.
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  - We had exceptional caregivers here and tremendous potential.
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  - So today, as the CEO,
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  - my role is to help create the conditions
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  - for our people to do their best work
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  - while ensuring that we remain financially strong and
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  - capable
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  - and positioned to serve our communities, not just
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  - for today, but for generations to come. So,
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  - you know, I often tell people that my
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  - journey, Kristen, was never to be a CEO
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  - or really to have any of the roles
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  - I found myself in. It was about saying
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  - yes to opportunities to learn and grow and
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  - and lead in different ways.
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  - There were all there was always someone around
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  - me who saw something in me that I
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  - didn't see in myself, and and those people
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  - push me to take on bigger things. And
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  - I'm so grateful to all of those people
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  - because those experiences ultimately prepared me for the
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  - role I'm in today.
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  - I appreciate you sharing that. And I know
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  - it's been over a year now since you
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  - became CEO.
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  - Reflecting on your journey, how does your HR
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  - background really shape how you lead today as
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  - CEO?
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  - Gosh. That's a great question.
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  - When I stop and think about it, my
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  - HR background, or I I call it people
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  - and culture because, really, I think that's the
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  - more modern
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  - reference for it. It influences almost everything I
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  - do as a leader, Kristen. I, you know,
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  - I think it taught me that organizations
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  - don't achieve great results, but their people do.
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  - Because at the end of the day,
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  - my experience has been that, you know, we're
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  - working we're all working with mostly the same
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  - infrastructure in health care. We have mostly the
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  - same technology.
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  - We have processes. We have consumer expectations.
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  - We have governmental constraints. All of us kind
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  - of have similar,
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  - challenges and structures. But what really differentiates one
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  - organization from the next, it's not those things.
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  - It's actually the caliber of its people. So,
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  - in my experience, when financial performance improves and
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  - quality
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  - improves or patient experience improves, it's because people
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  - changed behaviors,
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  - because we adopted new ways of working,
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  - we solve problems differently, and we committed
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  - ourselves to making things better. So because of
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  - that, I tend to view decisions through both
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  - the business lens and the people lens, and
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  - I think you really need to do both.
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  - I care deeply
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  - about accountability
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  - and performance, but I also understand that engagement
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  - and trust and communication and culture
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  - are really what makes sustained performance possible.
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  - I think, you know, one of my strongest
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  - beliefs is that colleague engagement is not a
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  - soft metric.
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  - It's a business strategy. And when our colleagues
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  - are engaged,
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  - patients have a better experience,
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  - quality improves,
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  - turnover declines,
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  - and financial results follow.
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  - Definitely. That's a great point. I also know
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  - that Memorial Health has several hospital CEOs who
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  - came up through nontraditional paths as well, including
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  - former physical therapist and a former RN. What
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  - do you think it is about your system
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  - that has opened the door to leaders with
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  - these backgrounds?
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  - Yeah. So one of the things I appreciate
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  - most about Memorial Health is that we value
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  - leadership capability
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  - more than a specific career path.
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  - Health care is so complex, and we need
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  - leaders who understand operations
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  - and relationships
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  - and strategy,
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  - quality, patient care, workforce challenges, and community needs.
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  - I don't think there's a single path that
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  - develops all of those capabilities.
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  - Some of our leaders came from nursing, as
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  - you mentioned, and some came from rehabilitation
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  - services. And I think what those leaders have
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  - in common
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  - isn't their original profession,
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  - maybe not even that they are clinically oriented.
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  - It's that they have an ability to learn
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  - and adapt and that they know how to
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  - build teams and they know how to help
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  - people succeed.
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  - I am proud of Memorial for that, and
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  - I think this organization has created an environment
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  - where talented people are given opportunities to grow.
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  - And when you do that consistently,
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  - you end up with leadership teams that bring
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  - different perspectives and experiences and strengths to the
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  - table, which ultimately makes the organization stronger.
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  - Absolutely.
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  - Looking ahead to next year, what's the one
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  - financial metric or number you're watching most closely
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  - as you plan for 2027,
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  - and how has that changed compared to last
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  - year?
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  - Okay. So the number I think about most
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  - is actually the gap between where we are
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  - and where we need to be.
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  - Health care has become comfortable
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  - celebrating very small margins. The the reality is,
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  - though,
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  - that one to 2% operating margins really aren't
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  - enough to fund the future.
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  - And if we're going to replace aging facilities,
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  - invest in technology,
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  - expand access,
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  - recruit top talent, and remain independent,
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  - these are all things that are important to
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  - Memorial and important to a lot of health
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  - systems, I think, out there. We need to
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  - generate significantly more capital than many of us
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  - have become accustomed to. So last year,
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  - I was focused on creating transparency
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  - and building trust as a new CEO.
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  - This year, I'm focused on driving performance to
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  - create enough financial strength and capability to make
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  - the investments our communities
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  - deserve. That's a very different conversation.
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  - Most people expect me probably to say operating
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  - margin is the number one thing I'm focused
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  - on, but the number I'm actually watching most
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  - closely is our operating EBITDA.
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  - And that's because I feel like our margin
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  - tells us how we're performing today,
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  - which is important, but EBITDA tells us whether
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  - we can afford tomorrow. And so across health
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  - care, many organizations
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  - like mine have delayed facility upgrades.
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  - We're making substantial technology investments today. You've you've
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  - heard, Kristen, infrastructure improvements
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  - while navigating the pandemic and its aftermath, and
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  - and we're no different. We have significant capital
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  - needs ahead of us
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  - from epic, workday to facility modernization and growth
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  - investments, and I think health systems at large
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  - are all kind of struggling with this. So
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  - the question I ask isn't just are we
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  - making money, it's are we generating enough cash
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  - flow to reinvest in the future.
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  - So last year, our focus was kind of
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  - on survival and stabilization.
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  - And as we look towards 2027,
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  - Kristen, the focus is really creating the financial
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  - capacity
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  - to build the health system our communities are
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  - gonna need ten years from now.
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  - Definitely. I appreciate you sharing that. I'm also
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  - curious beyond just finances.
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  - What are your two to three top priorities
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  - for Memorial Health before the end of the
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  - year to set the organization up for success
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  - in 2027?
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  - Yeah. So the first priority
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  - for,
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  - preparing for 2027 is executing our major transformation
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  - initiatives successfully,
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  - particularly Epic and Workday. We go live on
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  - Workday
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  - in just a just a few weeks,
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  - the end of September,
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  - and then we go live on Epic on
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  - 02/27/2027.
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  - These investments are really important to us because
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  - they're gonna modernize how we operate and create
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  - a stronger foundation
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  - for decision making
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  - for our leaders and caregivers. They're also going
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  - to enhance
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  - our the delivery of patient care.
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  - Second, we have to continue improving our operating
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  - performance
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  - because strong finances aren't the goal themselves, but
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  - they are what enables investment in,
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  - technology,
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  - people, and access facilities and growth.
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  - And then I would say, third, we're focused
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  - on accelerating access and growth. We want Memorial
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  - to be the easiest health system
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  - in every community that we serve to access,
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  - whether that's through primary care or specialty care,
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  - partnerships or new service models. So those are
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  - my top three priorities, but I would also
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  - say underneath all of those priorities is culture
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  - because none of this works without engaged colleagues
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  - who understand where we're going and why it
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  - matters. So I don't think I fully got
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  - all my priorities into three, but because culture
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  - is probably the fourth and and one of
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  - the most important.
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  - Great. Lots of exciting projects and focuses there.
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  - Lastly, I wanted to ask you what's one
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  - industry wide trend or pressure you think health
• 11:03
  - system CEOs aren't talking about enough right now?
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  - So
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  - that's a good question because,
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  - there's a lot of pressures that CEOs are
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  - facing right now, present self included.
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  - I think we're not talking enough about execution
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  - capacity,
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  - Kristen.
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  - You know, most health system leaders understand the
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  - industry's challenges. We understand reimbursement pressures. We understand
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  - workforce shortages and rising costs, technology,
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  - investments and constraints,
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  - and increasing consumer
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  - expectations.
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  - But what's less discussed is that health systems
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  - are trying to solve all of those challenges
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  - simultaneously
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  - while continuing to care for patients every day.
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  - And I think that the organizations that succeed
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  - over the next decade won't necessarily be the
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  - ones with the best strategy.
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  - They'll be the ones that can consistently
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  - execute.
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  - They'll know how to prioritize.
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  - They'll know how to align resources. They'll know
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  - how to manage change.
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  - They'll be masters at managing change, and they'll
• 12:02
  - help people adopt new ways of working.
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  - And for me, that's probably one of the
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  - biggest lessons of leadership. I think vision is
• 12:09
  - so essential,
• 12:10
  - strategy is so important, but execution
• 12:12
  - is really what turns vision into results.
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  - That's a great point because it seems like
• 12:17
  - the changes and the evolution across the industry
• 12:20
  - are not slowing down anytime soon. So just
• 12:23
  - being able to execute is so key.
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  - Yep. And, you know, I think let's say
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  - in closing for you, Kristen, if there's one
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  - thing I've learned throughout my career that ties
• 12:31
  - to that, it's that health care is ultimately
• 12:33
  - a people business. Right? Technology
• 12:35
  - matters
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  - and strategy matters, finances matter. But when you
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  - invest in people and you build trust and
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  - you stay focused on your mission,
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  - amazing things can happen. I know it. I've
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  - seen it, and and that's what gives me
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  - great confidence about Memorial Health's future.
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  - Absolutely.
• 12:52
  - Doctor Eaton, thank you again for joining us.
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  - We appreciate your time and look forward to
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  - following the great work you're doing at Memorial
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  - Health. Thanks, Kristen. Hope you have a great
• 13:00
  - day.