← 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 thrilled to be joined today by Rob Tonkinson, senior Vice President and CFO of Centra Health. Rob, thanks for joining me, Madeline, it's.
- [00:13]
B
A pleasure to be with you. Look forward to our conversation.
- [00:16]
A
Me too. So before we dive in, do you mind sharing with our listeners a bit about your background and more about Centra Health?
- [00:24]
B
Sure. I have about 38 years of experience in healthcare, finance and operations. Started my career with Carilion Health System in Roanoke, Virginia and spent 10 years in Champaign Urbana with the CARL system and a few years up near Cleveland, Ohio, and spent some time with Baptist Health in Pensacola, Florida and currently with Centra and Lynchburg. This is my second tour with Centra and been there about a year. Centra is a three hospital, four campus system with about 500 providers between doctors and physician assistants and nurse practitioners. We cover an area about the size of the state of New Jersey, 9,000 square miles in south central Virginia.
- [01:22]
A
Thank you so much. Yeah, yeah, thank you so much for sharing just a little bit more about Central Health and yourself. I would love to hear. You know, you said very rule. So one of the things I wanted to talk to you about was maybe two to three trends that you're currently following, maybe even just in the industry of rural healthcare right now. Things that are kind of top of mind for you, just from a financial perspective.
- [01:46]
B
I think top of mind for me and pretty much everybody else right now is what the coming impact of HR1, sometimes called the big beautiful bill, and most many of us would call it the big horrible bill, and what that impact is going to be for us as an organization and particularly what the impact can be to rural hospitals, as those are the ones that are least able to withstand reductions in payments. So for Virginia, Virginia's been a state that has expanded Medicaid access and also has been very good at pursuing supplemental payments. So we're looking at potential for pretty substantial decreases in payments, you know, starting in a couple years from now. And then of course, all the other peripheral impacts related to requalifications and reductions in, in subsidies for those buying off the exchange and all the other lesser provisions. But the biggest one for us is that and then some potential maybe for accessing funds through the rural health piece of that legislation.
- [03:08]
A
Yeah, the 50 billion. Right. So I know you just said, you know, in a few years is when you expect to feel safe, some impact of the one big beautiful bill. How are you preparing?
- [03:22]
B
Well, I mean we're, we're one we're continuing to analyze that. We're waiting for some word from from CMS on some preprints that are are filed with CMS to that will help us determine what the final impact is and, and when that will start really taking hold. You know, we were already on a journey having, having lost, just lost a little bit of money last year, so we had a negative operating margin. So we were already on a journey to rationalize expenses and look at services across the organization for areas where we can improve our operations and our financial performance. So we're going to continue those and deepen those efforts knowing that, that regardless of, of what we discover with the preprints and other things going on that, that there are continued challenges ahead. You know, there recently was the Republicans introducing more site neutral payment legislation potentially. And so reimbursement's not going to get any better in the health care field. Health care is costing this country a great deal of money and people are pretty dissatisfied and feeling like they're not getting value out of it. So we' looking at how we can bend our operations to produce more value for the consumer.
- [04:50]
A
One final question for you here. So during an earnings call, Community Health Systems in Franklin, Tennessee, their CFO Kevin Hammonds recently shared that about 40% of their beds could qualify for the Rural Health Fund. Are you aware of the percentage or how much of your beds would be able to qualify?
- [05:08]
B
Well, two of our hospitals are sole community providers. Only one of those would qualify. So it's, it's about 75 beds that we'd have that could potentially qualify. There's, there's a smaller potential that one of our other hospitals may qualify, but it's just not quite clear yet. It's considered rural in certain aspects, but not rural and others. So.
- [05:34]
A
Right. So potentially one and a half hospitals.
- [05:36]
B
Yeah. Right. Yeah.
- [05:38]
A
Yeah, yeah. Okay. No, I appreciate you breaking that down. Any other trends that you're following, you know, just besides keeping a close eye on the, on the bill?
- [05:46]
B
Well, yeah, I mean we're continuing to follow, follow labor trends. You know, labor cost continues to be a real challenge for us and, and rationalizing labor cost and getting the right labor into our markets again, it's, it's difficult whether you're talking about provider lab, talking about staff labor. It's, it's difficult for us to fill some of those demanding positions in our, in our rural, more rural location. So that, that's a continued trend. And then, then AI and machine learning and particularly how we can use that to improve everything from Backend operations to, to patient flow and other activities. On the clinical side, could you maybe.
- [06:36]
A
Share some things that you're most excited about right now at Centra Health? Maybe even heading into 2026?
- [06:44]
B
We are in the process. We're getting ready to open a new medical office building that will allow us to consolidate a lot of our specialty services close to our main campus in Lynchburg. And so we're pretty excited about that. We're also breaking ground on a new tower on our Lynchbur General campus which will allow us to. Currently we have two campuses in Lynchburg. This will allow us to consolidate all of our clinical operations into one campus in Lynchburg. So I think those are pretty exciting opportunities. And we have, we recently selected some new digital front door product that will really allow us to engage our patients on the front end of their care journey in a lot more effective ways. And so we're, we're in process of implementing that and also have selected a product to help us with maximizing the utilization of prime time or time as well as inpatient flow, one of those AI and machine learning enabled products. So we're pretty excited about beginning that journey.
- [08:03]
A
That's all very exciting for sure. Any other thoughts about how you're looking at growth over the next even 12 to 24 months?
- [08:11]
B
Well, I mean one of the challenges is as a sole community hospital, we already have pretty high market share in the low 80%. So we do have some out migration in some areas where we've had some physician turnover and other things. So we're focusing on that and really focusing on trying to improve our patient service and particularly our access times to our specialists so that people are staying in the community and not looking to some of the surrounding communities to meet their needs when we can't provide them access in the timely way they'd like.
- [08:54]
A
And final question for you here, I mean as you shared in the beginning of the podcast, you've been in healthcare for a, a number of years and you know, on the finance side and we also touched on some of just the trends and how the industry is evolving. How do you foresee the CFO role evolving in the next two to three years? Maybe? I mean it's got to kind of change and adapt right? To, to keep up with the changes in the industry.
- [09:20]
B
Yeah, I mean, I think we need to continue to lead as in the, on the finance side in finding and driving efficiency in our own OPER and then the rest of the organization, starting with those front and back office functions and then eventually and continuing into the clinical enterprise. So I think we need to continue to get our house in order and really minimize the expenses that the amount of resources we're using to accomplish the tasks that we need to do and to really focus those tasks on the things that are most important and strip out those. Those things that are less critical and so that the organization can remain profitable and continue to move forward.
- [10:15]
A
Well, Rob, a lot of really strong insights from you here. I appreciate you taking the time to connect with me, and I'm excited to connect with you again down the line about all the great things happening at Central Health.
- [10:26]
B
Yeah. Great to talk with you, Maddie. Thanks.
- [10:28]
A
Thank you.