← Becker’s Healthcare Podcast
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- [00:00]
A
This is Madeline Ashley with the Becker CFO and Revenue Cycle podcast. And I'm excited to be joined today by Robin Damschrotter, Executive Vice President, President of Value Based Enterprise and CFO of Henry Ford Health. Robin, thanks so much for joining me again. It's a pleasure to connect.
- [00:16]
B
Yeah, my pleasure as well. It's nice to see you again.
- [00:19]
A
So, Robin, for our listeners who maybe haven't heard our previous podcast together, could you share just a little bit about yourself and Henry Ford Health?
- [00:27]
B
Sure. You know, Henry Ford Health is an integrated delivery system located in Michigan and we serve southeast and central Michigan. We have 13 hospitals and over 550 sites of care. We have 7,000 plus physicians that are employed or affiliated with us, over 50,000 employees and currently we're projected to be about 13 billion in revenue by the end of the year.
- [00:56]
A
Wonderful. Thank you so much for sharing that. So diving right in here, Henry Ford Health saw a major leap in operating income in 2024, up from 294.2 million from 80.5 million in 2023. I hope my math is correct there, but correct me if I'm wrong, but could you share maybe some of the key drivers behind this improvement and how you plan to keep this, you know, sustained level of performance throughout the rest of 2025?
- [01:25]
B
Sure. Several key drivers. First and foremost, we had some early wins in our joint venture with the Ascension Michigan facilities. Those benefits came early. They were things from changing our group purchasing organization. So we got some rate wins on our contracts. For example, for almost 35 million, we had a wide variety of system wide transformation and improvement portfolio projects that first boost quality, safety experience and often come with positive financial outcomes. Because we're focused on a lean process of improvement and driving out waste in the system and abrasion that the customers, you know, our patients and members feel across the health system. We also were very, very fortunate. Unlike many health plans around the country, we had a $50 million turnaround at Health Alliance Plan, which is our insurance plan and we achieved that through member growth. HAP grew by almost 40,000 members. They had a great MA Medicare Advantage growth annual enrollment season. We also had 17,000 employees from the former Legacy Ascension join HAP. In addition, we had some great cost control on the administrative side as well as we have what we call quality and affordability initiatives which are really directed at trying to contain the medical cost growth. And again, working within our value based enterprise that I'll talk about a little bit later, we really try to get our arms around the total cost of care. I will also mention a few other key things. We continue to have strong growth, particularly in the outpatient and pharmacy home care. All of those things outside the hospital. But in addition we had higher acuity we also saw on the inpatient side as well. I couldn't end the year without mentioning the fact that we did have a Medicaid rate increase and inclusive of that is about $42 million that related to 2023. So all in all a good year. But as I mentioned, that rate increase, maybe we'll talk closer to the end about the federal Medicaid cuts that are going to be looming for 2028-2032.
- [03:48]
A
Yeah, that's definitely top of mind for a lot of leaders right now, so we can dive into that for sure. I do want to kind of switch gears. I believe we we've talked about this a few times, but you're now several months into the joint venture with Ascension Michigan, so do you mind just giving a little summary about that joint venture again for listeners and then just maybe sharing how progress is going there and anything you'd like to share from a financial standpoint?
- [04:13]
B
Sure. I mean, we had the opportunity to welcome the Ascension Southeast Michigan sites into Henry Ford on the 1st of October 2024. And you know, collectively we are working on about 250 million what we call tier one synergies. And a large part of that from Focus is a conversion from five legacy EMR platforms into the Henry Ford platform, which is all the way from front end of scheduling to the clinical EMR to the back end of revenue cycle. Within that, collectively, like I said, We're 50,000 team members strong and 550 sites of care. We have worked through, integrating and getting to our shared governance set up. And a lot of our focus originally, and I think I mentioned this in our last podcast talk, has really been around cultural alignment. How can we gain quick operational efficiencies together and really getting some of those quick wins while we work on this larger technology transformation. And we're super excited to say that we've got some key milestones coming up here in November with our ambulatory going first in wave one and then our acute care hospitals will be coming on in wave two in mid-2026. So we continue to work that game plan as we forge ahead with clinical planning and other optimization strategies that we have for the care delivery system.
- [05:49]
A
And you've kind of touched on it just in terms of goals for Henry Ford Health, but could you maybe share a little bit further on just how you're thinking about the rest of 20, 25 for the system, maybe even into 20 and how you plan to achieve some of these goals.
- [06:04]
B
Yeah, I think as we, we've been, I'll say lucky in the sense that we were able to be already working and looking and touching almost every aspect of our organization before the most recent federal budget cuts were upon us. There are probably three main sustainability strategies. One, making sure our integration continues to stay on schedule. That is an accelerant for us as we add their scale to our platform. And again, I think we've tested around the affordability of that platform for all of us is going to be important. Digital transformation is high on the list. We have been busy as we've been working on integration, continuing to automate Henry Ford's base platform. So when you think about scheduling and other touches where it involves a lot of paper and humans, how best can we continue to grow, take on more work and again take out that abrasion that we feel. I often mention that we're striving to catch up with the banking and the airline industry and sort of that digital aspect of operations, clinical operations and member operations, customer operations. And we do that in an effort so that we can have ease, transparency and again, hopefully drive some affordability and costs out of the system that we're going to need. Finally, you know, with my other title as the president of the value based Enterprise, we are focused very much on expanding value based care. And we like to talk about that internally as high value care. And what do I mean by that? We want the right case, right place. So again, we're really trying to work on getting our readmission rates down, having people seen before their condition exacerbates, making sure we have access available in the community, whether that's with a primary care physician via a digital appointment or a physical appointment, whether it's home care and ensuring that we have options out there, again that meet consumer expectations but also are driving folks to the right site of care and again hopefully driving greater affordability for all.
- [08:33]
A
I want to circle back quickly to, you know, the, the one big beautiful bill passage and potential Medicaid cuts here. Well, the cuts that we will be seeing. Could you share just a little bit of insights into how you had been monitoring this throughout the entire time and then now with the passage, what the go plan might be a little bit just to dive a little deeper there?
- [08:54]
B
Sure. I think we did a lot of scenario planning. Like everyone else, we scored each and every initiative that came out. We've looked at different scenarios and combinations. So we came to a minimum, the midpoint and a maximum. And I think overall when we look at it, the implications are a bit above the median of what we could have expected, but certainly not the worst case scenario that was out there. I do believe the one point that we have in front of us is related to implementation, that some of these regulations, particularly when it comes to eligibility, work requirements, redetermination, the states are going to decide on sort of the final implementation rules. So Michigan might experience something different than in Indiana or California or a Texas. So we anticipate we might see some of those in 26 and 27. But the major, major cuts are expected to happen 28 to 32. So when you talk about the go plan, in addition to scenario planning around what the dollar amounts might be, of course we're looking at what can we accelerate in that sustainability strategy that I just mentioned to you, how can we accelerate integration initiatives that we've had on board? We have digital transformation, as I said in the queue, and we're looking at how to bring those forward. And then ultimately we have been building out that value based care toolkit and capability so that again we can get right place and drive affordability in that perspective in an effort to get at that cost of care that's concerning to the Medicaid program.
- [10:47]
A
Now some good insights there. And I'm sure, like yourself, a lot of financial leaders, just healthcare leaders in general, are keeping their eyes on this. So thank you for sharing. Final question for you here, Robin. I know this is kind of like a one that you might have had to sit and think, you know, over the years, but could you share maybe the most valuable lesson that you've learned, maybe even in your early career in healthcare, and how maybe it's influenced your leadership approach and the way you do things now in your current role?
- [11:16]
B
Sure. And I guess I'll take this one from my CFO role. But when, you know, we're sitting in these times and thinking about the impact of the federal cuts and how you have to go make decisions and this is not the first time we've had to do this right. There's the Balanced Budget act of 1997 for those of us who are old enough. We did COVID 19, we did the 2008 financial recession and obviously we've had the labor shortage challenge. So we're a very resilient industry and a very resilient group of leaders. So when I think about that, when we are making our best financial decisions at this time, we have to be closest to the people and be thinking about our purpose because we still have one mission, right? It's serving our communities. So when I think about that on my impact leadership approach, there's three things that come to mind. It's about transparency and collaboration. You got to prioritize open communication and cross functional teamwork at this time, followed by strategic investment. Even as we're looking at cuts, we're going to have to make key investments in order to get at the savings that we're going to need to reduce our cost structures. And then finally we've got to adapt, right? We've got to adapt our structures. And sometimes it's times like this when you look at a crisis and see all the challenges, it really brings you opportunities that you haven't been able to push past. If we can think about that, I think we have the opportunity from a leadership perspective to step up. Then finally for me, these have been important approaches in my leadership styles. As we've made decisions during the pandemic, as we've been working, our Value Based Care enterprise, the joint venture with Ascension, and Of course our $3 billion project for the future of Health. They are just tenets on how I my work.
- [13:15]
A
Some wonderful lessons and insights there. Robin. Always a pleasure getting to chat with you. I really appreciate you taking the time and I'm excited to chat with you again, hopefully in the near future.
- [13:25]
B
Thank you so much for having me.