← Becker’s Healthcare Podcast
Becker’s Healthcare Podcast
Shelly Schorer, FHFMA, MBA, California CFO at CommonSpirit Health
00:15:37
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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.
- [00:33]
B
This is Laura Dirdo with the Becker's Healthcare Podcast. I'm thrilled today to be joined by Shelly Shorer, Chief Financial Officer of the California Division at Common Spirit Health. Shelly, it's a pleasure to have you on the podcast today.
- [00:46]
C
Thank you, Laura. It's a pleasure to be here. Thank you for having me.
- [00:49]
B
Oh, absolutely. And you know, Shelley, it's been such a pleasure to get to know you over the last few years. I know you've been on our podcast and spoken at our events, and we just truly appreciate that. So, looking forward to continuing the conversation and learning a little bit more about how you're thinking about the next 12 months or so. But before we dive into that, I know for those who are just starting to listen to the Becker's Healthcare Podcast, could you tell us a little bit more about yourself and Common Spirit Health?
- [01:16]
C
You bet. So I serve as the CFO for Common Spirit Health, California region. For anyone unfamiliar. Excuse me. Common Spirit is the third largest health system in the United States and the largest nonprofit. We operate across 28 states in California. Our division is substantial. We generate over $12 billion in net revenue. We encompass 29 hospitals, 125ambulatory care sites, and more importantly, we're powered by nearly 40,000 dedicated employees. We support 8,500 aligned physicians. We employ 1,200 physicians and advanced practitioners providers, along with 600 GME residents. And currently our organization serves one in every four Californians. And so it's quite a big part of the Common Spirit footprint. And I've been with the organization for almost nine years.
- [02:11]
B
That's amazing to hear. And you know what a huge growth that Common Spirit has had over the last few years. And truly amazing to see the expansion within the region of California as well. From your perspective, when you're looking through the last year or so, what was the most important initiative that you led? What did you do and what were the results?
- [02:32]
C
You know, it was not a light bulb moment. It was really the blocking and tackling was through literally disciplined, granular focus on our core operational and patient Care metrics. We zeroed in on everything. Meeting stringent quality standards, fostering our people and culture goals to meticulously managing discretionary spend, optimizing our labor force, improving our revenue cycle and reducing length of stay. That was significant work. I mean, it sounds like something I'm just saying, but we had teams. The daily blocking and tackling revenue cycle is so many different facets. It's payer strategies, it, it's our payer relationships, it's our revenue cycle partners. Literally having all of those conversations in every market that we have in California and making sure that we understood all of the obstacles which change because I always say revenue cycle is living and breathing thing. Managing our patient care is also really important just because when you often think about finance, we have to remember that the patient care is the most important thing. But actually good quality care leads to better financial metrics too. So that's really important to me as a chief financial officer. And we keep trying to show patients ways for new access, improved resource utilization across the board, and by having more access for our patient care, we can treat them in a better way where they live. And it actually is more cost effective delivery of care. So literally the most important initiative I think we learned last year was making sure that everybody understood what drives our performance. What metrics and what levers do we look at to say how can we improve on our financial situation? Are we slipping in anywhere in quality? And we were very lucky last year. We hit all of our goals in every one of those facets.
- [04:33]
B
That's amazing to hear. And you know, bringing back to the fundamentals in the last year is so fascinating because I think especially as folks are looking at all the changes in the healthcare system, technology and more, it seems like there's often a push to try new things to transform, but actually it's not. Sounds like you were able to meet your metrics and meet your goals by really focusing on that blocking and tackling as you said in bring stringing together some of those core wins, which is really cool and a helpful reminder I think for leaders as they're looking at, you know, what do what is the most important for the next year.
- [05:09]
C
Yeah, I agree. Sometimes it's just back to basics, you know?
- [05:12]
B
Absolutely, absolutely. So speaking of 2026, looking ahead, what are some of the big priorities as well as headwinds that you're focused on?
- [05:22]
C
We have obviously significant headwinds. Healthcare is in a really challenging space right now and we've been here before, we've been through the Balanced Budget act, we've been through Affordable Care act, the changes to the way we got paid in the 80s. So we know what this is like. This just seems a little bit more. We have the legislative challenges of HR1, the big one, big beautiful bill. We have persistent inflation that really is outpacing our revenue cycle and our reimbursement. So trying to manage that dichotomy is always challenging. We have continued clinical, ongoing labor shortages. We have, we continue to have challenges with post acute placement and this will continue to pressure our health system. And I think it's just imperative that we remain incredibly engaged, highly strategic and relentlessly innovative. And what that means to me is constantly exploring new models of care and forging strong, impactful partnerships to navigate these complexities successfully. And thinking about the way that we deliver care in a different way. You know, we are seeing more and more shifts to the ambulatory setting. And I think that we just need to be able to be bold and acceptance of change and move with faster vision than we've ever had before. But I think we're poised to do that.
- [06:48]
B
That's great to hear. And I think critically, when you look at figuring out how to forge some of those strong impactful partnerships and figure out how you want to deliver care in a different way, I mean, those seem like really big things on the horizon that many leaders within the health system have to figure out. And then from your perspective as a CFO too, I can imagine there's pressure in some ways to, you know, say yes to the things that need to be done. But also understanding from the dollars and cents side, you know, there, there's a lot of challenges in that space. And so how do you really decide what you want to prioritize when you're looking at limited budgets or limited dollars, you know, that you have to spend as an organization.
- [07:37]
C
You know, we have to be really, really mindful of everything, every decision that we make. Obviously in healthcare, one of the most expensive things that we have is our labor force because they're all highly educated, highly talented, so they're expensive. So we have to be very mindful of how we hire, who we hire, and then we don't overemploy or under employ. Right? It's that perfect balance. We also have to be very careful about how we do not only human capital, but physical capital. And where do we put our dollars, where the most need is for quality and growth and access. And are there ways that we can increase growth and access without massive capital spend? And that's this ongoing strategic conversation that we have in our leadership meetings, really monthly. Are we looking at the right things? Are there new opportunities? How can we shift our focus? How can we shift our funding? And in California, we also have the Office of Healthcare Affordability that's trying to manage spending caps. So we have additional challenges in our state to make sure that we are not over, we're not spending too much because they're going to put cost caps on our healthcare spend. And so, and that is something that we have to watch constantly. And there is no way to fund 29 hospitals at the same time. You know, I always often refer to a personal budget. You have to figure out what is your priority and then you, then you stage your spend for the best for the, for the communities we serve, for our facilities and our ambulatory care sites. And how can we do the best for our patients? And how can we fund the best things and continue to grow and thrive and be sustainable?
- [09:20]
B
Absolutely. That's no easy task. And you know, to that point, when you're looking at the next 12 to 24 months, what do you think is the hardest decision or hardest thing you'll have to do in the coming year?
- [09:32]
C
I think it's going to be ensuring we have sustainable financial viability, making sure that we are reimbursed for the care that we get. I talked about revenue cycle payer relationships. Those things are getting more and more difficult. People are more sophisticated. We see many of the bigger payers, the companies using AI to manage claims. And we have to make sure that we're technology equal to them so that we can manage and we don't get behind in that space. That's also expensive. But we also need to grow our revenue cycle and make sure that we're continuously reimbursed for the care that we give so we can outpace our inflationary pressures that we get. Obviously the inflation is outpacing our reimbursement, so we have to be very careful on all of our spend. And it's not just a financial metric. It's fundamentally important to our ability to continue investing in ease and ultimately patient care. I think it's going to be a significant challenge not only for Common Spirit, but for all healthcare facilities. Because this isn't just, you know, when I started in healthcare almost 30 years ago, it was a simpler time and you could focus on one or two things annually. And I think this is something that we have to look at every day, every week, every month. And it's constantly moving and shifting and changing our vision to match what our pressures are Absolutely.
- [10:55]
B
I think that's such a great point. And truly across the board, these pressures and challenges are coming up for C suite leaders. In trying to figure out and navigate all of them, I think is the golden question here. If we could figure that out, then it'd be in such a better spot. But I appreciate you talking too about AI and technology, how the payers are using it, how health systems are transforming in some ways their revenue cycle in order to keep up with some of those things. So it's just a lot happening within the healthcare space today. So before we wrap up, I wanted to ask you about growth as well. Where do you see some of the best opportunities for common spirit and especially the California division to grow in the next few years or so?
- [11:43]
C
I remain committed to the fact that I think our best growth opportunities are in our ambulatory footprint and enhancing our patient care access. There's still a need obviously for acute care setting, but we are seeing more and more services and healthcare procedures moving to the outpatient setting. And I think that we need to expand our ambulatory care footprint. We need to make sure that patients have access to care, that we have all the right entry points for our patients to seek care. And it means strategically growing our outpatient services, our urgent care centers, even leveraging our digital health and telehealth to meet patients where they are leveraging our technology by making care more convenient and affordable and accessible, we not only serve our communities better, but we position common spirit for sustainable growth in a rapidly evolving healthcare landscape. And I think that's where you're going to see us really succeed in the next year or two.
- [12:43]
B
That's amazing to hear. You know, I think you paint such a great picture of having those outpatient settings, growth and ambulatory digital health, telehealth and all of those things, you know, which, like you said, are better for patient care can produce higher quality, more accessibility, which is extremely exciting. But I know on the flip side too, from the financial perspective, some of that can be a bit challenging just because reimbursement is lower in those settings. And so, you know, it seems that there might be some tension or growing pains in getting to this future where ambulatory is really playing the right role within patient care for patients. How do you set yourself up or is, you know, your executive team in board and everything, really see that vision and willing to go through some of these growing pains in transforming the healthcare system?
- [13:31]
C
You know, those are really important conversations. That's an excellent question, because what we, what we look at if we start investing in ambulatory care, yes, it's a lower overhead, but it's also lower reimbursement. We have to make sure that we don't over invest in our acute care. We have to balance that setting. So if we're getting the right, if we have the right acute care setting, that's fine. But if we start to see a shift to outpatient, then we have to adjust our overhead and our support for the acute care setting. And it's all about balance, making sure that we are where we need to be. And if you can't, you can't invest in everything at the same time. So when we start to expand our ambulatory care footprint or our urgent cares or those things, then we have to look at, are there other acute care settings that we either need to come up with a partner to fill the space, do we need to adjust our overhead in those spaces? And it's really just about constantly having those conversations and managing how we care for our patients and looking ahead because there is a need, like I said, for the acute care space. But we can't sustain everything and still grow in our ambulatory care setting. We have to start to adjust our focus and our spend to make sure that it still makes sense for the communities that we serve.
- [14:49]
B
That is so helpful to unknown and understand. Shelly, thank you so much for your time today. This has been an inspiring conversation. I really, truly seems like you've got so many great things happening there at Common Spirit, so we'll look forward to connecting with you again soon. And I know you're speaking as well at our annual meeting in April. It'll be fun to continue these conversations, to keep seeing what are some of the best solutions in bright spots within the healthcare space and learnings from each other. So I'm looking forward to seeing you then.
- [15:20]
C
Oh, I'm looking forward to seeing you too. And I'm really excited. That's my favorite conference of the year.
- [15:24]
B
It.