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Becker’s Healthcare Podcast
Melinda Hancock on Consumer-Centered Transformation and Financial Leadership at Sentara Health
00:23:54
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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. We're looking forward to hosting you in Chicago.
- [00:32]
B
This is Laura Dardeau with the Beckers Healthcare Podcast. I'm thrilled today to be joined by Melinda Hancock, Executive Vice president and Chief Financial Officer at Sentara Health. Melinda, it's a pleasure to have you on the podcast today.
- [00:43]
C
Thank you, Laura, very much. Looking forward to it.
- [00:46]
B
Absolutely. Now, I'm excited for our conversation because I know Sentara is very much on the forefront of a lot of the big things that are happening in healthcare today, and certainly your perspective on how you're thinking about the future will be valuable for a broader audience. But before we dive in, can you just tell us a little bit more about yourself and Sentara? Sure.
- [01:04]
C
No, happy to. I have been with Sentara for about four and a half years, serving in a variety of leadership roles. I started as the inaugural Chief Administrative Officer and then had the incredible pleasure of becoming the Chief Transformation Officer for over two years as we were launching a very transformational, not to overuse that word, strategy, really putting consumers as our North Star and optimizing our assets as an integrated delivery network. I am very pleased, though, to have taken that experience and now using that, going back to my roots as the Chief Financial officer, since that has been the majority of my roles in the past.
- [01:49]
B
Absolutely. That's fascinating to hear. And you know, I know that transformation that Sentara has been going through is really fascinating and something that a lot of hospitals and health systems I've connected with are trying to do something similar in thinking about the patient as a consumer, trying to find ways that they can improve the experience and access to care. And so along that journey over the last couple of years, is there anything you can share with us that has been particularly helpful or useful during that time and anything you were surprised about as well?
- [02:22]
C
Sure. Let me level set real quick on Sentara. So we are a $14 billion net revenue integrated delivery system. We're based in Hampton Road, Virginia. For those who don't know where that is. We are in the eastern part, but have facilities throughout Virginia and in northeastern North Carolina with 12 hospitals and over 400 sites of care. We care for over 1.5 million patients last year, as well as our 1 million members through a variety of different lines of business. Medicare, Medicaid and commercial. We do all this with 34,000 incredibly dedicated employees, over 2,000 physicians and apps as well. So incredibly proud of the work that we're doing. We designed a purpose statement four years ago that I think really helps drive our work and that's that Sentara exists to be the trusted partner to individuals and community and their journey to health and well being. So as we center ourselves on that purpose, the transformation work feeds that in everything that we do in transformation, we want to make sure that it is somehow creating health care to be more seamless, simple, personal and more affordable. Words that aren't used to describe health care, unfortunately, in our country. So as we've been working through the transformation, some of the best surprises or we have our employees share how they envision a Sentara where all these things I just said are true and the creativity, the imagination, the dedication of our employees who truly want to create a better health care system is incredibly inspiring, in some cases, truly brought tears to many of our eyes. I think that's been surprising. Not that we doubted or for a second thought that our employees weren't 100% engaged in this process, but to hear their vision aligned with our vision and how we can truly make this impact as a system that has care delivery and health plan assets, yet haven't always used them in conjunction and in furtherance of making sure our healthcare is better for our consumers. So that's been a joy. This has not come without challenges as anytime you undertake a significant process change within your organization, change management is critical. The why is never in question. The how. It's hard. It's hard to re, engineer, rethink, reimagine your processes, knowing that you've got workforce challenges, technology challenges, and really want to make sure that you're looking ahead. So there was a. There's a lot in there. But happy to talk further too about some of the specific work we did with our transformation last year, if helpful.
- [05:23]
B
Yeah, absolutely. Let's zero in on that a little bit. I think it's always helpful to bring color to some of those things that you were mentioning because so many organizations are facing those workforce challenges and in trying to do significant change management while also understanding the headwinds. And so when you think about the last year or so, can you talk about initiative or a couple of initiatives that you led that were most impactful, what did you do and what were the results.
- [05:50]
C
Well, as I mentioned, our key focus is our consumers. So as we seek to provide better services for our consumers, we started this transformation work in 2023, again with a guiding North Star of our consumers and optimization of our status as an IDN. We are approximately 50, 50 care delivery and health plan, which is unique. And we want to make sure again that we're using our unique assets to enable that. So we also have to be aware of these headwinds that are coming and in some cases already here, as we had a very challenging year here at Sentara in 2024, as well as that shift to ambulatory. So a lot of our work is focused on how do we actually bring our work together with care delivery and health plan. So here's a good example. When you are discharged from a hospital, any hospital, chances are you might get a couple of phone calls, one from a care manager with the health plan that you are a member of, one from the hospital from where you were discharged from, to help ensure that you have a continuation of services post discharge to ensure success. You might also get one from an ambulatory type of healthcare delivery because again, to facilitate that ambulatory network and the different diagnoses, of course, that you may have received. So here at Sentara, we said, wait a minute, wait a minute, wait a minute, let's stop and pause and say, is that the best thing for our consumer? So in the case if I'm a healthcare member and patient of Sentara, I might get three phone calls minimally to help manage my care, all with the absolute best intent, but not coordinated. So we have brought our care management together in a unique opportunity. We feel as an idn, to ensure that we are looking at our patients and members very holistically in how we make sure that they are not only having great follow up, but also active, preferably out of the hospital care for perhaps their comorbidities or different conditions. And how do we make sure that we are doing that in the best interest of these consumers? So that's a very large undertaking that we started and is still in process because we also want to make sure that we are engaging technology to enable this work, not the other way around. We don't start with technology. We start with what are we trying to solve and then what is the technology that enables that important work. Another large focus this year was increasing the financial acumen of our leaders. This increased includes increased transparency, financial accountability as well as operating excellence. Given our seven year forecast and those of many health systems, probably across the country. It's imperative that all leaders not only be financially astute for their areas of responsibility, but also they need to understand all the businesses of Sentara. If I grew up in care delivery, I need to make sure I understand how the health plan works if I'm going to do initiatives and push forward opportunities for us to care better for our consumers. It's been a very dedicated emphasis that we are continuing into 2026 to ensure that our financial leaders are well equipped for the dynamics ahead.
- [09:20]
B
Absolutely. That makes a lot of sense. It's a fascinating opportunity for both the clinical side as well as the health plan to work together more holistically and make a difference. And to your point, you know, when you are working with leaders who have really an understanding of one side or the other, what do you do in order to bring them together and create more of that understanding between the two? How can you kind of get those folks up to speed, more or less in a significant way so that you can continue along this journey?
- [09:51]
C
Great question. We are still looking for those opportunities in all. In all fairness, Laura, but some of the very concrete ways we've done it in the last year is one just outright education. So we have done recorded tutorials of the basics of care delivery and the basics of health plan. So, for example, in the health plan, what are our lines of business? When do we get rate increases and how do. How are those rate increases determined? What is cost of care? How do we spend that premium dollar? What's the difference between our medical loss ratio and our administrative loss ratio? And what goes into that? On the care delivery side, we did the same thing. How are hospitals and our ambulatory business reimbursed? Why is that important? How much quality is engaged with that? What are the levers? How much is labor versus non labor? How do we measure our quality? And also how do we get paid? Very important, because a health plan and a care delivery are structurally very different from a financial perspective. Care delivery is very labor dependent. Health plans are more technology dependent. And so our ability to make sure that we are talking the same language as we're trying to solve the same problem is so important. But also one very great, fantastic example is we did create a turnaround room for our health plan. As I'm sure many people noticed. We had one of our first losses ever in Sentara in 2024, primarily due to Medicaid redetermination because we have a large Medicaid business on our health plan and in care delivery, in service to those important consumers. And so When Medicaid redetermined came through, not only did we experience the negative impact, but so did nearly every health plan that had a significant Medicaid line of business. And so we started a turnaround room this, this year or in 2025 that was led by the health plan, but engaged care delivery leaders as well. So if we see an issue that perhaps we have members being discharged from the hospital without a pcp, well, wait a minute, how do we work with our medical group to align that need? So very simple issues like that. If we are trying to serve some of our ambulatory members with their eye exams, the health plan actually came up with a mobile eye exam that would actually go to our members houses to ensure, especially for our diabetic members, that we are getting their eye exam done and any consequential treatment that's needed. And so the ability to bring those problems and then create issues and plans together has been a really good learning and something that we're going to continue to encourage and really require because that is how we are going to best serve our consumers. Got it.
- [12:53]
B
That makes a lot of sense. You know, it was really fascinating to hear. I think that those Medicaid redetermined changes, excuse me, Medicaid redetermination changes truly, you know, have an impact across the board. And so to hear more about how you navigated that is just really helpful in understanding how you're thinking about things and continue to stay nimble so you can provide those solutions. Now, looking ahead for 2026, what are some of your big priorities and headwinds that you're focused on?
- [13:21]
C
Great question. And so let's take the more challenging part of that question. First, the headwinds. So first, preparation for HR1. Obviously every state's going to experience this differently and depending on their relationship with Medicare and Medicaid is going to be reacting perhaps in a, in a different way across each state, given the variability in Medicare payments and in Medicaid payments. We are also very focused on site neutrality. We saw an incremental change for 2026 with the outpatient rule, but expect that to continue and not decrease. We also want to address the increased affordability challenges with the expired tax credits and the redetermination that where people lost coverage and weren't necessarily able to afford coverage on the exchange. But I also want to point out the workforce. Aha. Actually put out a good report on the workforce, looking at six different forces that are actually reshaping our workforce. So just real quick, in summary, first of all, there's a tremendous amount of financial stress. Whether it's rising labor cost, supply cost, pharmaceutical cost, interest rates, it really does have an impact on the ability to continue to get the efficiencies that hospitals need. There's also tremendous demographic shifts. I recently saw a very good visual of how in 1960 our demographics from an age perspective was a pyramid. And now with our aging nation, it's more of a skyscraper. So that's really accelerating the need for longer and more acute post acute and home based care for our aging population. And again, with all the same workforce that's not necessarily growing. We talk a lot about changing worker expectations with the different generations that we have and ensuring flexibility and growth and meaningful work, but also taking care of the whole person and supporting that well being aspect is going to be so important. We always have to be looking at new pipelines. We announced, I believe about a year ago that we were doubling our residency slots. We understand we have to be part of the solution and so we are actively working on creating additional residency programs. To date we have 267 residents and really feel the need that that needs to double and have aligned with some great partners to do that. We also have to be very mindful we are in a period of rapid technological transformation. And again, back to my comments earlier. We here at Sentara want to make sure that we understand what we're solving for and what is the technology that enables that. But as we also know, this is changing rapidly. So whether it's your AI enabled workflows or machine learning, telehealth, the different digital opportunities, it's so important to get all of that aligned as well as you're trying to upskill your workforce. And then I am very concerned about the ongoing geographic disparities. Access is such a key component to that we stood up Sentara Cares clinics that were statistically chosen to be in areas of greatest need for access. And so really ensuring that our members have access to care is so important. That is just one example and that will not solve all the issues. So our ability to be more flexible, think differently about how different models work. We just got a new mammo van to ensure that our female members have access to this important test. And so again, driving in the areas of greatest need and concern. And so, you know, as we think about our priorities for 26, we have to think of these as things to manage and perhaps optimize and an opportunity to rethink our business. So I mentioned a couple examples already. I do want to talk about the technology for A minute. We are undertaking a redesign of our rev cycle. Revenue cycle is usually the last touch point our patients have with a system, with our system, any system. And that's also sometimes the greatest amount of financial stress and administrative stress and concern. So how do we make sure that we are eliminating that and designing a revenue cycle that meets the needs of our consumers, but also optimizes the technology they've come to expect in other transactions in their daily life? So we are actually designing a touchless revenue cycle, but we are also ensuring that where our patients need and want a live interaction, we have that readily available back to our purpose about meeting our community and our individuals where they are on their journey. And that's clinically and administratively. And so that's been a key focus for us this year. And hopefully we'll have great success to share here in the future as we are actively redesigning our work.
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B
That makes a lot of sense, and it is just so critical to have that type of focus, but also understanding when you're doing some of this redesign work, having that mission in mind and just having that central to everything that you're doing. And so I think you've tied everything together really nicely here when you. You talk about making changes even to the revenue cycle and administrative aspects of it. Knowing that the patient needs and community access is front and center is so critical. I'm curious, before we wrap up here, what do you think the hardest thing you'll have to do in the coming year will be?
- [19:25]
C
Well, I'm going to go back to the education, I think, internally. I know I've talked in our conversation about the need to continue to educate our internal workforce and how we optimize ourselves as an IDN and in service to our consumers. Our leadership must be equipped and knowledgeable about the financial opportunities before them in order to reshape how we provide our services to our consumers. So this work will continue. It's hard, but very valuable work. But then let's look externally. Our industry is funded through decades of imperfect financing mechanisms that have been put in place for a variety of reasons, whether it's to control cost, fight fraud, waste and abuse, or provide reimbursement for underfunded lines of business, and also quality. However, the underlying premise is that the majority of our patients are financed by a minority of our patients. And so if you start to pull on the very threads of the areas that are providing margins to the hospital that enable them to care for their community and invest in technology and their workforce, then the entire fabric starts to weaken. To support the whole. And that is what we're seeing. So therefore, education to the decision makers on what meaningful health care, refinancing reform is required so that we can ensure that all stakeholders are at the table and what that path to success looks like to continue to ensure our community's health. I see this as a large, critical task. Everybody is trying to do the right thing. I don't doubt intent in how to redesign the healthcare financing program. However, I think we must educate and we must make sure the right people are at the table while we do it.
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B
Absolutely, that makes a lot of sense. I mean, the complexities of health care and how everything is so interwoven and interdependent is truly fascinating right now. And things are changing so quickly. Having that type of education and making sure decision makers understand truly the impact of the decisions they're making is critical.
- [21:52]
C
Now, how are you thinking about growth
- [21:54]
B
as well over the next couple of years? What are some of the best opportunities that you're seeing coming down the pipe?
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C
Well, I think when you look at growth, I think, and given the headwinds that we've talked about and where we are, I think gaining efficiencies is going to be critical. So any growth needs to make sure we're optimizing the assets we have as well as how are we ensuring that we are scaling the investments, scaling our capabilities, upskilling our colleagues. And so therefore growth becomes not only for topside revenue, but for capabilities and new ways of delivering care as well as an efficient administrative administration to support them. The overhead of today has to be very different tomorrow. And so ensuring that we are investing in the technology to enable that, but also looking for scale for the investments that all of us are now making in technology is really important. But that also that capability component, growing for another capability, sometimes we can't do that ourselves. So the best option is to partner and really getting into that buy or build conversation. So I think lots of opportunities as we look across where we need to be and how we need to grow.
- [23:23]
B
I love that. Melinda, thank you so much for joining us on the podcast today. This has been such a fun and informative conversation. I really, you know, could dig into a great many of things that you talked about today and hope to do so as well at our annual meeting. I know you'll be speaking there and it's just always a pleasure to see you and have you. So thank you so much, Melinda, and looking forward to seeing you in April.
- [23:44]
C
Thanks so much, Laura. Yes, I'm very much looking forward to April. Always a fun event and really appreciate spending this time with you today.