John Mallia, Interim CFO, Methodist Le Bonheur Healthcare

Summary

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Becker’s Healthcare Podcast

Guest: John Mallia, Interim CFO, Methodist Le Bonheur Healthcare

Date: December 20, 2025
Host: Madeline Ashley

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Episode Overview

In this illuminating episode, Madeline Ashley interviews John Mallia, Interim CFO of Methodist Le Bonheur Healthcare (MLH) in Memphis. They discuss the evolving challenges facing healthcare finance leaders, particularly in the context of workforce pressures, reimbursement uncertainties, investment in revenue cycle innovation, and the unique perspective an interim CFO brings to the table. Mallia also details MLH’s transformative technology integrations and reflects on the changing role of CFOs in a volatile healthcare environment.

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Key Discussion Points and Insights

1. Background: System and Personal Experience

[00:23 - 01:20]

• MLH is a six-hospital health system, including a nationally recognized children’s hospital, an academic medical center, four additional hospitals, and numerous outpatient sites in Memphis.
• Annual net revenue: approximately $2 billion.
• Recent system-wide go-lives of EPIC (EHR) and Workday (ERP) have driven significant change.
• John Mallia brings a breadth of interim CFO experience from working in New York, offering valuable national perspective.

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2. Major Industry Challenges: Workforce, Payer Trends, and Reimbursement

[01:44 - 03:25]

• Workforce Pressures: Labor costs remain elevated post-pandemic, impacting both clinical staff and advanced practice providers.
• Payer Mix and Reimbursement Issues:
  • "Medicare Advantage, we're seeing higher administrative burdens, higher denials, and meaningfully lower yield compared with traditional Medicare." — John Mallia [01:56]
  • Reductions in 340B savings and directed payments pose key threats, especially for safety-net systems in non-expansion states like Tennessee.
  • Potential reductions in ACA exchange subsidies could increase bad debt and shift payer mix, with negative financial impacts.
• Long-term strategies center on understanding and mitigating these headwinds.

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3. Responding to the 'One Big Beautiful Bill Act' and Reimbursement Uncertainty

[03:25 - 04:44]

• Finance teams are developing long-term forecasts amid ongoing federal policy changes and uncertainty, with the biggest immediate concern being reduced exchange subsidies.
• "We're trying to model those out, understand what shifts we have to make in our financial strategy going forward to mitigate the impact of losing that reimbursement." — John Mallia [04:17]

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4. CEO/CFO Strategic Partnership

[05:07 - 05:58]

• Mallia emphasizes constant, transparent communication with CEO Michael Ugweki to adjust strategies in light of changing reimbursement streams.
  • "We stay very close in conversation about the potential impacts of these things…how we look at, you know, potential impacts of site neutrality as we look at expansion..." — John Mallia [05:33]
• Importance of keeping the board and external partners aligned and informed.

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5. Modernizing Revenue Cycle: Investments and Partnerships

[06:14 - 07:34]

• EPIC Integration:
  • MLH’s rollout of the EPIC EHR was a “pretty transformational” move, streamlining workflows and boosting automation.
• Strategic Partnering:
  • Collaboration with Ensemble Health Partners to improve collections efficiency, cash flow, and innovation.
  • Locked-in costs to collect incentivize innovation that directly improves yield and patient experience.
• "We really want to reduce the friction for patients and staff...improving the patient financial experience, which can, as you know, be rocky." — John Mallia [07:08]

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6. Technology Transformation: EPIC & Workday Go-Lives

[07:45 - 08:56]

• Timeline: EPIC went live in October 2020, Workday in July 2024—two major changes in rapid succession.
• Automated workflows reduce manual labor, with positive impacts on AR days and coding accuracy.
• "Our AR days are down to less than they were pre–go live, and our coding is improving, so we're hitting our stride on a lot of those key points right now." — John Mallia [08:48]

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7. Evolution of the CFO Role

[09:18 - 10:57]

• The CFO has become less about “crunching numbers” and more about telling a "compelling and true story" to both internal and external stakeholders.
• Need for clear, consistent, and forward-focused communication, especially amid uncertainty.
• "It's our responsibility to outline all of the knowns and give the best guidance we can about the known unknowns… there are always unknown unknowns." — John Mallia [10:14]
• Resilience and steady leadership are vital, especially when unexpected events (e.g., cyberattacks, pandemics) occur.

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8. The Interim CFO Perspective

[11:01 - 12:42]

• Mallia describes the unique challenges and advantages of interim leadership—bringing an outsider’s, often national view, and operating amidst uncertainty.
• Emphasis on bringing consistency, purpose, and independent insight during periods of transition.
• "I'd like to think that in an interim capacity, we bring kind of a national perspective on things. Sometimes organizations need that outsider kind of view, independent view, and, you know, that's what we bring to the table." — John Mallia [12:27]

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Notable Quotes & Memorable Moments

• "Medicare Advantage, we're seeing higher administrative burdens, higher denials, and meaningfully lower yield compared with traditional Medicare." — John Mallia [01:56]
• "It's so much less about numbers now in the CFO role, and more about telling a compelling story. I mean, the story has to be a true story…" — John Mallia [09:25]
• "Communicating simply and consistently, keeping the focus forward, interpreting uncertainty… and then just really leading with steadiness even when those variables change." — John Mallia [10:51]

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Key Timestamps

• 00:23 – Introduction of John Mallia and MLH background
• 01:44 – Current financial challenges in U.S. healthcare
• 03:25 – Approaching policy uncertainty and the 'One Big Beautiful Bill Act'
• 05:07 – CEO/CFO collaboration and maintaining strategic alignment
• 06:14 – Revenue cycle innovation and partnering with Ensemble Health
• 07:45 – EPIC and Workday implementation experience
• 09:18 – Evolving nature of CFO leadership
• 11:01 – Mallia’s interim CFO experience and perspective

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Tone & Final Thoughts

John Mallia brings a measured, candid tone, balancing pragmatism with optimism. His leadership philosophy centers on clarity, adaptability, and steady guidance through ongoing change—a necessity in today's turbulent healthcare landscape. Whether permanent or interim, the modern CFO must be a communicator, strategist, and partner in organizational transformation.

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Transcript

[A]

This is Madeline Ashley with the Becker CFO and Revenue Cycle podcast. And I'm excited to be joined today by John Melia, Interim CFO of Methodist Levonor Healthcare. John, thanks for joining me.

[B]

Thanks for having me.

[A]

So I'm so excited to dive into our conversation. Before we kick things off, do you mind sharing just a little bit about yourself, your background, and more about your organization?

[B]

Sure. You know, as I mentioned, I'm interim CFO at Methodist Labonor in Memphis. We're a six hospital system generating about 2 billion in net revenue annually. We have a nationally recognized children's hospital, of course, in Le Bonner. We have a academic medical center here and four other great hospital facilities, as well as many fantastic outpatient sites in and around Greater Memphis. We recently went live with EPIC and Workday just last year. So that obviously has been a major transformational change for us across the system. As far as myself, before coming to Memphis here, I served as an interim capacity in New York, both upstate and in Brooklyn. So I've seen a wide range of markets and environments, payer environments. But now I'm proud to serve mlh, Midwestern accent and all, and alongside a very dedicated team here in Memphis.

[A]

Wonderful. Thanks so much for sharing. I too have the Midwestern accent. So. Well, just to kick us off and as you mentioned, you've served in different areas, different markets. I would be curious to hear maybe some of the broader challenges that you are following closely right now in the healthcare industry from a financial perspective and why these challenges. Are these industry pain points?

[B]

Sure. Yep, there's a bunch. As you know, just off the top of my head, workforce pressures really have not gone all the way down, you know, since coming out of the, the, the pandemic. Some of them have shifted around a little bit, but labor costs continue to be elevated. Allocating market increases is, is critically important for recruitment and retention. And this is true with staff and physicians and, and increasingly apps, in fact, advanced practice providers. That's becoming, you know, continues to be a tough spot for us. Medicare Advantage, we're seeing higher administrative burdens, higher denials, and meaningfully lower yield compared with traditional Medicare. And that, that continues as we look ahead. We're looking at potential reductions in our 340B savings. That's a big deal for us. That's a big deal for any safety net. And then of course, Obba, OB3, I've heard it referred to a number of different ways. Possible reduction of the ACA exchange subsidies, the eliminations that'll put more people, more people may Lose coverage which increases bad debt and ships payer mix. So that's, that's a challenge that we're looking at. And then just long term pressure on directed payments specifically for safety nets that has become, you know, a pretty integral part of our reimbursement and our strategy going forward. So understanding the impacts of that in future years and any potential mitigation strategies that might come is important to us.

[A]

Yeah, and I want to circle back a little bit to the, the one big beautiful bill Act. You know, that's something that we've heavily covered here at Becker's and something that we're, you know, seeing a lot of attention drawn to from, from finance leaders. With so much unknown around that right now, how are you just kind of keeping a quote maybe like a pulse on this and working with your finance team to be ready for, you know, the unknowns?

[B]

Yeah. So we're putting together long term financial forecast and as we head into this budget year, year one is really going to be our budget for next year. So I think the, the most, the closest things that we have to look out for is how those exchange plans are going to impact us. The, the reduction in the subsidies. So that's the nearest term thing as we look out to the future. It does appear that there will be some reduction in our directed payments in Tennessee here. We are a non expansion state. So the floor on the reduction right now as it stands is 110% of Medicare, which is still better than our Medicaid rates, but also much less than we're currently getting. So we're trying to model those out, understand what shifts we have to make in our financial strategy going forward to mitigate the, the impact of losing that reimbursement.

[A]

And one final question for you here. You know, some CFOs that I've talked to have just honed in on the importance of working with your, with your CEO to really develop strategy and sometimes have those tough conversations. Can you kind of talk a little bit about that working relationship that you have and, and just kind of, you know, how you guys have maybe even grown together during this time?

[B]

Absolutely, yeah. And there's a lot of things to talk about. So Michael Ugweki, our CEO here and I, you know, have a lot of these conversations about how to plan because a lot of our strategy is currently driven around the fact that we do get these reimbursement streams and you know, 340B in particular is a key area for us for growth, just pharmacy in general. So we stay, you know, very close in conversation about the potential impacts of these things, how it changes our strategy, how we look at, you know, potential impacts of site neutrality as we look at expansion for our hospital outpatient departments. So yeah, that constant communication, staying in touch with the story, both together with our external partners and our board, is really important.

[A]

Yeah, definitely the key there. I want to shift just the discussion a little bit and, and see if you could share with myself and the listeners a little bit about how you are deciding right now where to invest in the revenue cycle. If you could just share some thoughts there as well.

[B]

Sure. You know, as I mentioned, we went live with epic, which is pretty transformational for us, but we've also locked in our non EPIC cost of collections and are accelerating the full revenue cycle performance with our partnership with Ensemble Health Partners, which just started this year. So other than increasing yield and accelerating cash flow, which, you know, the primary goals of the relationship also include treating them as a co innovation partner. You know, as I mentioned, we've locked in the cost to collect so, you know, benefits that the R and D that they put into automation, we want to make sure that it truly improves cash and yield. That benefits both sides of the partnership, obviously, but we really want to reduce the friction for patients and staff as part of the evaluation of these innovations and the investments and of course improving the patient financial experience, which can, as you know, be rocky. And we're trying to mitigate as much friction as possible on that. And really when we're talking about automation, other than improving the patient financial experience and reducing that friction, we really want to make sure it just stays focused where really improves the yield and the cash.

[A]

Can you share with us a little bit about everything that went into this EPIC integration, you know, how long this took and kind of what things are looking like right now?

[B]

Sure. You know, I could spend a whole podcast on that as well. You know, we went through the journey like a lot of other organizations. We went live in October, So just about 14 months ago.

[A]

October of 2020. 24.

[B]

Yep. October of 2020, actually. Yep. And we, we doubled down, we went live on workday in, in, in July of 2024. So there was a lot of change very quickly. And the organization now, I think is really getting its legs underneath us, understanding the. All the benefits that were able to get from it, all the, the, the things we're able to see that we hadn't been able to see before. The reduction in the amount of, I would say, manual work and manual interfaces, having people just take information out of one system and putting into another. A lot of that's automated now, and we're just really starting to hit our stride. You know, our AR days are down to less than they were pre go live. And, you know, our coding is improving, so we're hitting our stride on a lot of those key points right now.

[A]

Thank you for diving a little bit deeper there. Final question I have for you here. You know, as the. The industry continues to evolve, ebb and flow, you know, like we talked about, some of the uncertainties we're seeing. Can you share how the CFO role has been maybe forced to evolve beyond just. Just crunching numbers, just the finance side of things, and maybe some of the most important leadership skills you're seeing in this role right now?

[B]

Yeah, you know, it's. That's a good question. And. And as I think about, really the latter part of my career, how it's evolved, it's so much less about numbers now in the CFO role and more about telling a compelling story. I mean, the story has to be a true story, and you have to be able to influence it in a positive way as much as possible, but being able to tell it in a clear, consistent manner internally and externally, that folks can easily understand, and that resonates. And really, it has to stay focused on the future. You know, we spend a lot of time telling our. Our boards and external stakeholders about what happened historically. But I think it's really important to say, hey, this is what we're anticipating going forward. These are the headwinds that we're facing. It's. It's our responsibility to outline all of the knowns and give the best guidance we can about the. The known unknowns.

[A]

Yeah.

[B]

And then we also have to acknowledge the fact that there are always unknown unknowns. I think is. Is Donald Rubsfeld put it, you know, recent history, from the change, health care cyber incident to the pandemic, stuff happens. And while we can't really be prepared for things like that, we have to keep in mind that they do happen. So I would say, you know, communicating simply and consistently, keeping the focus forward, interpreting uncertainty, which we've talked a lot about already today, without creating anxiety, and then just really leading with steadiness even when those variables change.

[A]

And could you share, too, how long have you been in your interim role?

[B]

Yep, I've been at MLH since July of this year. And then previous to that, as I mentioned, I was working in two different facilities and interim capacities in New York since 2019.

[A]

What does the. And this might be maybe an obvious question, but what does that interim period, that interim role kind of bring to the table that might be different from, you know, a regular CFO role? Maybe what are some things that you've learned during this time?

[B]

Sure. So my background is in consulting, and it kind of morphed into interim management later in my career, which I'm really enjoying. But, you know, interim CFOs are a little bit different in that they come during a time of uncertainty, transition. Sometimes it's as simple as keeping the seat warm in between former CFO and the known CFO that will be coming in at a certain date. Other times they're kind of date uncertain. So, you know, that's part of the challenge, is to make sure that while you have that interim tag, you also lead with purpose and some semblance of consistencies, because there can be some worry about the lack of tenure and consistency along with that. But I guess to circle back on what we bring to the table, I'd like to think that in an interim capacity, we bring kind of a national perspective on things. Sometimes organizations need that outsider kind of view, independent view, and, you know, that's what we bring to the table.

[A]

Yeah. And it still holds true to exactly what you were talking about. Just as the, you know, the, the permanent CFO role, how that's evolving. Interim CFOs, interim roles, they evolve too, you know.

[B]

Absolutely.

[A]

Yeah. Well, wonderful. John, it has truly been such a pleasure getting to connect with you, learn a little bit more about you personally and Methodist Levonor Healthcare. So I, I appreciate you hopping on the podcast with me, and I look forward to connecting again soon.

[B]

Absolutely. My pleasure. Madeline, thanks for having me.