← Becker’s Healthcare Podcast
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- [00:02]
A
This is where healthcare leadership comes together. Becker's 16th annual meeting brings more than 3,500 hospital and health system executives and nearly 800 speakers to Chicago, April 13th through the 16th. This year's event includes keynote conversations with Dallas Cowboys legend Troy Aikman and former President George W. Bush. For the agenda and event details, visit Beckershospitalreview.com and click on the Events tab in the upper right. Looking forward to hosting you in Chicago. This is Alan Condon, back with another episode of the Becker's Healthcare Podcast. And today I'm delighted to be joined by Diana Richardson, the president and CEO of Merrimack Health, a three hospital newly formed health system that launched in September and named after the river Valley that cuts through the organization service area in Massachusetts, if I'm not mistaken. Diana, a real pleasure to have you on the podcast with us today, your debut appearance. For those of our listeners who mightn't be as familiar with you and Merrimack help, do you mind giving us a little bit more information about your role and your background at the health system?
- [01:13]
B
Great. Thank you so much for having me, Alan. So I joined the organization here first in the role of interim back in April and was delighted to become the permanent president and CEO and really inaugural CEO of Merrimack Health in October. Organization formed in a very unexpected and rapid fire way really in October of 24 when the then Lawrence General Hospital, a hospital that had been a standalone community hospital for 150 years, acquired two of the steward healthcare hospitals that were going bankrupt. So the Holy Family hospitals in Methuen and Haverhill, Massachusetts and became an acquirer to keep those hospitals from CLOs and really secure health care here in the Merrimack Valley region of Massachusetts.
- [02:11]
A
Fantastic. I think. So to your point, I believe before we record it, a lot of health systems do indeed have unique stories. I think that is specifically true for Merrimack Health, your organization. Congratulations, Inaugural CEO on October. Really interesting backstory and excited to dive right in. So Diana, I think first and foremost, what was going through your mind when you decided to join the health system at such a pivotal, such a critical point in its integration?
- [02:42]
B
Yeah, so you know, sometimes life throws you unexpected curveballs. And so I have had a long term career in health care administration and leading hospital operations. And in spring of 2024, I had a very unexpected opportunity. I was invited by the Commissioner for Public Health in the Commonwealth of Massachusetts to join an incident command response that they were standing up to prepare for what they anticipated would happen and did eventually happen the bankruptcy of stored health care in Massachusetts. Steward had nine hospitals. We operate here in our state at very capacity levels. So there was really no free capacity in our healthcare system to absorb the patient care from nine hospitals. And so the state stood up in incident command and I got to join that response. So through that I had become very familiar with the Lawrence General Hospital acquisition of the Holy Family Hospitals and actually had the opportunity to assist a little bit from the state perspective since that had to happen so quickly. So when I had the opportunity to join, what was going through my mind really multiple things. The first was how important the success of the integration and the new system was to healthcare in this region. We are really the only regional healthcare provider in the Meramec Valley region here in our state. And so it was critical that this be a success. So it was a no fail option kind of scenario. So that was certainly going through my mind. But the other piece that was going through my mind was the opportunity in the work with the state. I really got a chance to see the commitment to the community from both of the hospitals that were coming together. So both the Holy Family Hospitals and the Lawrence General Hospital, really the commitment to community and patient care was unbelievably strong. We are a safety net facility. We take care of very sick patients who often don't have resources and really easy ways to access the health care system. So it is critical that we survive. But it's also just amazing the commitment of our teams to that care. The second thing going through my mind was really supporting this team in continuing those efforts. The third thing that was going through my mind was we have got to figure out a way to be financially sustainable to make sure that we continue to provide that care for the next 150 plus years. So a lot of big challenges, but also a lot of big opportunities here in our region.
- [05:42]
A
Yeah. In terms of that scenario, the no fail scenario option going through your mind initially. Certainly no pressure there, Diana, but certainly you and your team doing a fantastic job right out of the gate so far under such unique and challenging circumstances. I would love to hear maybe one bit more on the financial sustainability piece and kind of goals objectives there. But before I do, we often hear the hard work and somebody's this is not exactly a traditional transaction acquisition because of we all know that the challenges are in Massachusetts with Stewart Healthcare and whatnot. But post integration we often hear how challenging it is in terms of integration to different cultures, facilities, hospitals, staff. Can you talk us through maybe the biggest challenges you faced in unifying These hospitals, what may be distinct cultures and histories.
- [06:33]
B
Yeah. So, you know, you actually have to start with the speed that the system came together. So I have had the opportunity in my career to participate in either the forming or the integration or the expansion of systems in multiple organizations. And usually what happens is you start having conversations for a variety of reasons. Sometimes it's financial, sometimes it's operational, but you have conversations. You talk about strategy, you talk about what it's going to look like. You have lots and lots and lots of people meeting for many, many, many months, and then you finally come together and then you begin to pull off all of that work that you sketched out in that kind of preparation period. In our scenario In May of 24, there was no even glimmer of a thought of these organizations coming together. And on octo they came together, it was that rapid. So there really was no opportunity to do any of that planning work, any of that. Let's talk about strategy and culture and how are we going to start operationally coming together. None of that happened. So we're doing the work in a kind of a reverse fashion to what the standard process is. We came together 10-1-24 and then we started thinking through, okay, what do we have to integrate first? So first and most important was our medical record. When you talk about challenges doing a rapid fire medical record integration, again, that's something you usually do in 12 to 18 months. We had to do it in about six, without any preparation ahead of time, and without any ability for the teams to talk to each other ahead of time. So coming together in that sense, coming together as one medical staff to make sure that we have the same quality metrics, the same policies, the same processes that if you were seen anywhere in our our system, you were going to get the same high quality care and even things as simple as making sure the phones worked. The hospitals that we acquired were pretty decrepit, I guess is the word I might use, and really had not been invested in for many years. So some of the basics just didn't work. So you talk about some of the biggest challenges. That was really the first challenge. Trying to do all this work as quickly as possible, but also doing it the right way, respectfully and again, that financially responsible way from a cultural standpoint, it's really interesting. I've been part of many integrations where there is a culture clash that two organizations do things very differently, have very different identities, and much of the hard work is getting the teams to think and approach work the same way. Here there was Such similarity of cultures in the commitment to community. Two of the hospitals are less than two miles apart. Many people who when they were scared by what was happening at Steward, looked for other employment opportunities, came across to the other hospital two miles away. Many faces were the same. People know each other, people were neighbors, people knew the patients. Patients tended to move between the organizations because they're physically so close. And so some of the usual hurdles of making sure that everybody has the same cultural norms we just didn't have. We had amazing teams who cared about each other and cared about the community from day one. So what often is a challenge was not so much for us really. The challenges were much more on that operational side, restoring facilities, restoring infrastructure and restoring the confidence of the patients in our community in the acquired organizations.
- [10:38]
A
Fantastic. So I certainly a big feather in your cap on the operational side of things, integration wise, I think in terms of that rapid fire medical record integration in six months, I believe you said coming together as one medical staff under the same quality metrics, strategy processes still in such an early antithesis of this health system a couple months since its birth. Diana, I wanted to go back to something you'd mentioned just in your most recent answer. In terms of the financial sustainability piece, obviously so, so key for hospitals across the country at the moment, I believe the latest from Kaufman hall nonprofit hospitals, around about 35% are still operating in the red, trying to march their margins back up to a break even standpoint or even back into the black. It's unfortunate when we think about next year for safety net providers, some more cuts coming down the pipeline on the Medicaid side of things doesn't seem to be much respite. But for you now as CEO of Merrimack Health, in terms of the financial sustainability piece, where are you focusing? How are you keeping this top of mind going into 2026?
- [11:47]
B
Yeah. So I will say that one of the things that helped us last year really in our first year of coming together was we had amazing partnership from the leadership in our state and the state really invested in us to allow us to do this as a safety net standalone community hospital. There no way we could have done this or pulled this off on our own without that state investment. Having said that, we're all looking down the face of some really, really grim challenges over the next few years. And it is our responsibility to figure out how to make our organization be financially sustainable both before we head into those, but certainly to prepare us for that scenario. And you know, so you think about, okay, what are, what are the that we can and do need to control. Now, the first is now that we actually have a system. In the past, these hospitals all competed against each other. And we would often define our services both in terms of offering, but also size and scale by what our colleagues across town were doing. So somebody, another hospital was offering it, we had to do it. We actually have an opportunity now to step back and say, based on our community, based on our population, population, based on our patient needs, what's the right service mix to have and how big should it be and where should it be? So certain things make sense to be in all three hospitals. It's important that we have emergency services in our communities, easy to access. So all of our hospitals will and do continue to provide emergency services. But certain other things, it may not make sense for us to have two or three of them of kind of physical locations. And by consolidating into one, we can have the same access and sometimes even better access and better quality by coming together, but also reduce costs. So we have some opportunities in that sense, and we also have the opportunity by doing that to offer services that have never been offered in our community. There are certain things that our facilities don't provide that a community hospital can and should provide for our community. So we can begin to offer new services as well, which help helps from a financial sustainability side. So a lot of work in that sense, and certainly the bread and butter work that all of my healthcare colleagues know and do every day around looking at every penny that we spend and making sure that it really is the right investment and the best and most effective way that we can do anything we do to drive costs out of the system. So it is that operational rigor, but really we have some new opportun that we have as a system that didn't exist before. Yeah.
- [14:46]
A
So a lot of change, of course, but to your point, opportunity for somewhat of a reset in terms of some of the services being provided that some of the hospitals at Merrimack held. Diana, so recently it's been a couple months since you stepped into that permanent president and CEO role. How has your leadership style evolved during this time of rapid change? It sounds like a big challenge, but it sounds like a challenge you're no doubt relishing and overcoming quite a bit.
- [15:17]
B
Well, I will say it helps to have a good, healthy sense of humor if we go through some of these challenging times. And so I am fortunate to be surrounded by a team that can approach these challenges, opportunities, whatever you want to call them, with energy and with a good Sense of humor and reality and support of the team as well. In terms of leadership style, I think it's like any significant change during change, the most important things you can do are listen to the team, get the team's input, listen to what they're telling you, and make sure that we are responding and supporting the teams doing the work. We have just amazing people that work across all sectors of healthcare. And if we can support them in that and find ways to really listen to their input, leadership becomes a lot easier. We have amazing teams if we can just support them and get out of the way while they do the great work. It makes my job much easier, but really it provides much better care for the patients as well. So it's a sense of humor for sure. And really listening and supporting our teams through change.
- [16:34]
A
Absolutely. I love that. Diana. So you've touched on this a little bit already, but I'd love to hear maybe one bit deeper in terms of, of looking ahead. Your biggest priorities over the next 12 to 18 months or so. What are two or three biggest priorities that you're focusing on over that time period?
- [16:51]
B
Yeah, so we have to continue our work on integration. We did the clinical systems up front because those were the most critical for just ensuring safe, quality care. Now we have to do a lot of the administrative processes and systems. So things like our human resource system and our accounting systems, we need to bring those together, make sure that they are integrated into one system. So we still have integration to do on that front. Despite all the work we've done over the past year, there's a lot still to do. So that's one challenge. But certainly the biggest challenge that we are facing is the threat to the care and coverage of the patients in our region. We are a safety net provider. We have of over 75% of our patients are supported by some sort of government payer. And of that, the majority are covered by a Medicaid program. And so our patients are in a particularly fragile situation. We also have a very high immigrant population in our area. And you know, for example, in one of our primary cities, Lawrence, Massachusetts, over 40% of the population are foreign born and over 80% are Latino. So it is a population that is really at risk of having solid healthcare coverage, but it is also a population that desperately needs access to high quality care. So our challenges for the next 12 to 18 months is to figure out how we can be as financially sustainable internally as we can so we can prepare for those patients who may not have coverage and may not have access to care. In 26, 27. And I will say we continue to partner with really all of the legislative partners in our area and our region and our state to figure out how we're going to navigate a time when many of our patients will no longer have coverage and we'll have to avoid routine and preventive care. That will certainly have impacts on our emergency rooms and that will have impact to the access to care for all the patients in our region. So we've got some really daunting times ahead of us and our job for the next 12 to 18 months is, is do everything we can and everything we can control to provide the best scenario as we head into those rocky days.
- [19:23]
A
Yeah, no, I think for safety net providers really across the board next year, it's such a challenging time period, but so greatly respect and so greatly appreciate the work that you, that your teams, other safety net providers do for the community so much. Diana, last question I have for you before I let you go. I think particularly it seems like 2025, we've certainly seen a little bit of a rebound in terms of hospital acquisitions, mergers, somewhat born out of financial challenges, somewhat born out of maybe larger health systems growth and whatnot. But for other health system or hospital leaders like yourself, what advice would you give to them in terms of navigating consolidation, rebranding or a health system integration today? Obviously your situation is quite unique. I might as well learn quite a lot. But, but any kind of advice for other health system leaders who might be listening for this podcast, going through a similar process?
- [20:19]
B
Sure. So I would say Merrimack Health, couple of lessons that we have learned. The first, I'll go back to your question about supporting the teams and how we do leadership. Listen, listen, listen, listen. It becomes ever more critical in the times that we're in to be listening to our patients, to our staff, to our physicians. They are the ones who will help us navigate this. So listen is the first and the second is don't be afraid to move fast. If you're listening to the teams and you are reacting to their input and their perspective on things, even if you sometimes stumble while you're doing things, quickly, they have your back and we'll help you get through it. So have we done some things that were a little clunky? Absolutely. Did the teams help us get through it? They did. And we're strong. Stronger because we did things faster in the long run. So I guess my second don't be afraid of that part. And the third is really look for those partnerships. In our case, it was really partnership with the state but also partnerships with many of the other health systems in our area to help us provide clinical care and stability for the programs that we might offer. So really looking for how you can partner in any scenario. Partnerships like look different. You know we use the word kind of big P, little P in terms of partnerships but really, however it looks, it's going to be a rocky time for all of healthcare. So the more we can do it together, the more successful that we'll be.
- [22:00]
A
Listen and indeed trust your team. Don't be afraid to move fast and look for those strategic partnerships that make sense for your own organization. I think Fantastic key takeaways and food for thought there. Diana really, really enjoyed this podcast. It's been an absolute pleasure speaking to you, getting to know you and learning a little bit more about Merrimack Health and certainly love to catch up with you again down the line. Thank you so much.
- [22:23]
B
Great. Thank you so much for having.