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Faith Regional Health System: To thrive, 'focus on the basics'

The Nebraska health system was able to keep financially afloat during the crisis without layoffs or furloughs.

Susan Morse, Managing Editor

Johnathan Wilker, vice president of Finance and CFO for Faith Regional Health Services has delivered a steady hand to the health system's budget in his eight-year tenure at the Norfolk, Nebraska health system.

Johnathan Wilker, vice president of Finance and CFO for Faith Regional Health Services
Johnathan Wilker, VP of Finance and CFO for Faith Regional Health Services

But this year has been unlike any other. In addition to the COVID-19 pandemic that has affected all of healthcare, a cyberattack last month took the new Epic system offline for about a week. There were no reported breaches of data but the system was on manual processes for that week. 

"Thank goodness we didn't need to turn away any patients," Wilker said. "Now we have to go back and make sure the documentation of charting and charging is done."

COVID-19 affected Faith Regional early during the pandemic, since the surrounding area has numerous meat processing plants, including Tyson Foods, which reported a high number of positives. The incident command center for COVID opened in February as the number of cases increased to an average of four to five inpatients at any one time. 

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Smaller area critical access hospitals sent COVID-19 patients to the 128-bed Faith Regional. But most of those who were infected didn't come into the hospital and stayed home, Wilker said. 

After the initial surge, the number of COVID-19 cases settled down, but the hospital is preparing for a second round as reported cases throughout the state of Nebraska have been climbing.

"We're now seeing a surge in COVID-19 cases, as well as increases in other patients. Nurses are feeling stressed out these days," Wilker said. "The state is concerned about capacity and whether to go back to postponing elective surgeries."

But rather than having a statewide mandate, Nebraska is letting each hospital manage the crisis. 

"We're doing well with it," Wilker said.

BUDGET ACHIEVEMENT PLAYBOOK

Faith Regional was able to keep financially afloat during the crisis without layoffs or furloughs, Wilker said. 

"We have a budget achievement playbook," he said. "We made a commitment as an executive team we would not do layoffs unless it was the last thing needed for survival."

The health system went to flex time, in which staff members, who were already cross-trained, were able to fill in as needed in other departments. All departments were held to the same standards of flexing staff, Wilker said. This included executives.

To save on personal protection equipment, the hospital made use of a runner who could get supplies and whatever else was needed for the COVID units without having to enter the rooms and don all of the PPE that clinicians wear inside patient rooms.

"We have COVID units that may need a runner. The runner gets stuff done," Wilker said. "Some members of the executive team filled in as runners as needed."

The executive team reduced staff hours through the use of paid time off. While employees are paid, PTO is expensed as it accrues. Some staff had to take three weeks mandatory PTO by the end of the year.

"It doesn't impact cash," Wilker said. "From an employee engagement and retention standpoint, that approach has been huge for us."

The flex time and PTO policies were already in place. There was no, or there was at least less, scrambling to meet the physical and financial needs of the pandemic. 

"That's always been our approach," Wilker said. "We don't just replace people automatically. We go through a rigorous process. Right now we're trying to put in place higher-staffing plans. We've been able to have new physicians onboard and able to have new clinics. We're feeling really blessed right now."

Deferred merit increases are going out in the next pay period. 

The road to sustainability started before the pandemic began, through a philosophy of recruiting and retaining staff for the long term.

This is important when a move to Norfolk, Nebraska, population 24,000, may not be for everyone. Sometimes a physician is recruited, but after moving to the area, his or her spouse may say the area is too small or the weather too harsh.

Because it is rural, the hospital has to pay higher salaries to get good staff. Most physicians are employed by the hospital, though there is a pocket that remains independent.

Faith Regional is in the northeast corner of Nebraska, about two hours from Omaha and Lincoln, and about an hour-and-a-half from Sioux City, Iowa. 

But the specialists the system has recruited have become their best recruiting tool. Staff turnover is relatively low. There are many specialties offered, as in cancer and cardiovascular programs and a hand and plastic surgeon who attracts patients from other states.

The nursing shortage remains an issue, even with a local community college that has a nursing program.

Wilker himself is a transplant from larger cities and health systems further west. He joined Faith Regional in 2012. 

THE FINANCIALS
 
Wilker is balancing the need to have cash on hand and to manage debt. He is working to get the number of days cash on hand back to pre-COVID levels.

The health system has made steady improvements in the revenue cycle. Accounts receivable days, which were in the 90s, are now in the low 40s. 

"My record is 28, I'm trying to get down that low," Wilker said.

As with most hospitals, the main financial challenge is due to the delay in elective procedures and surgeries. Some patients went elsewhere for care. The payer mix has gotten tough, because there's a higher percentage of self-pay patients due to area layoffs and furloughs. 

Through a statewide petition and a Nebraska Supreme Court ruling, Medicaid expansion is happening in the state, but it hadn't been in place during the first surge in COVID-19 cases.

THE M&A CHALLENGE

As with many smaller hospitals and health systems, Faith Regional has fended off its share of potential buyers. 

"We've been approached informally from time to time," Wilker said. "The board has affirmed we want to remain independent." He said of other systems looking to move in, "They're still kind of watching for us."

The religious, faith-based system is part of the Lutheran Community Hospital Association. Being independent, the system can't look to a corporate office for direction. Strategic planning is done in-house. The responsibility for surviving and thriving is also all in-house. 

"What we have to do to thrive," he said, "is to focus on the basics."

DIGITAL TECH AS A DRIVER FOR INNOVATION

On October 12, Faith Regional announced it had earned the 2020 CHIME Digital Health Most Wired recognition as a certified level 9 from the College of Healthcare Information Management Executives (CHIME). The CHIME Digital Health Most Wired program conducts an annual survey to assess how effectively healthcare organizations apply core and advanced technologies into their clinical and business programs to improve health and care in their communities.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

The Business of Health

This special collection of stories, which will be updated throughout the month, explores how hospitals, health systems and physicians are attempting to not only financially survive, but thrive, under the new normal.