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- [00:00]
A
This is Laura Deardo with the Becker's Healthcare podcast. I'm thrilled today to be joined by Tom Vasco, Chief Executive Officer at Newman Memorial Hospital. Tom, it's a pleasure to have you on the podcast today.
- [00:11]
B
Thanks for having me, Laura. I really appreciate it.
- [00:13]
A
Absolutely. No, I'm excited for our conversation because I know there's so much happening in healthcare, particularly for rural and community hospitals. I think it's such a fascinating, unique time in terms of trying to figure out how to continue to serve these communities with healthcare space. And you've been able to do that at Newman Memorial. I'm looking forward to our conversation, but before we dive in, I'm wondering if you could just introduce yourself and tell us a little bit about the hospital. What do you see as being one of your biggest wins or success stories from the last year?
- [00:44]
B
Yeah, so I've been at Newman, 25 bed critical access hospital independent, serves about 25% of our land mass in the northwest corner and then also into Texas and Kansas. So a really important establishment, been here for 105 years, was established by a pioneer physician, Dr. O.C. newman. And so like I said, I've been here about three years and when I got here, you know, the hospital was kind of that typical scenario of a rural hospital just struggling, you know, negative operating margins, living within its four walls, strapped for cash. Really no way. It almost seemed like there was no way out and it was just suffocation. But some of the background of coming from for profit and private equity and working in some of the bigger entities. Through my career with Deloitte, I knew that I had apply a different set of tactics in order to get the hospital on the right tracks and head in the direction it is. Surprisingly enough, I never expected the growth that we've had and the success that we had. It's so fast, but I think it goes to shows. I'm sure we'll talk about, we just need to change the way we do business as healthcare administrators to avoid some of these closures and decrease that risk and of cutting access to the core of America and our populations within our counties.
- [02:05]
A
Absolutely. That's such an excellent point. I know we'll dive deeper into, but I just had one more question for you along these lines here. Could you tell us a little bit about what drew you into a rural healthcare setting, into a 25 bed critical access hospital? After working for for profit entities in Deloitte, I know you spent some time in Chicago. What drew you to Oklahoma, in the rural community there?
- [02:28]
B
Yeah. So you know you see this, like I said, working with bigger entities or when you, when you do work in some of the community hospitals, you see the fragmentation between the rural environments and the urban environments, you know, at every level, at every, at every vertical. And it's just something that you continue to read about and hear about. But I've always been that person. And in order to really gain the truth, I need to immerse myself in that environment to better understand. And knowing that having that experience, I thought, well, maybe it's a novel way to try something different to, to see if that works. And, and it has. But yeah, I mean, we can, we can talk about social impact and, and, and wanting to, to give back, but it's just such a huge cornerstone of healthcare. It's the majority of, of our nation. And I thought, you know, what a great advocate to, to, to, to join that fight to say, hey, I understand what the, the urban environment looks like, but I also understand what the rural environment looks like and, and who knows where my, my career. Having that understanding, that full picture, that holistic view of health care in our nation, I think is so very important and almost a requirement for any hospital CEO in our nation to have that firsthand experience in order to lead a health care organization the right way and ensuring that access is there for every American as our, you know, as our basic human rights of health care.
- [03:51]
A
That makes a lot of sense and, you know, just seems like an amazing opportunity to, as you mentioned, be able to dig into the rural environment and see, see firsthand what works, what doesn't, and how you can really make a difference and an impact across those large swaths of America. Now, from your perspective, what are the top two to three issues that you're focused on right now?
- [04:12]
B
Yeah, I think, no surprise, right? The big beautiful bill and the negative impacts that that's going to bring 6.3 billion over the next decade of cutting 850 million annually in Medicaid payments. You know, it's going to be very challenging because, you know, the Medicare side of the House has been in a challenge for, for every hospital and health organization. And now, now we're slipping into Medicaid. So it's almost, you know, like I stated prior of, hey, you know, we're going to lose money on Medicare and now we're going to lose money on Medicaid. And but you're expected, you know, to churn positive operating margins, you know, and so, I mean, the data tells, you know, tells the facts. Here in Oklahoma, you know, our health rankings are some Some of the poorest in the nation. I think ranked by U.S. news World Report 49th, 97 of our hospitals are operating, you know, in, in the negative. And I don't think it's necessarily the, you know, the deficit of talent. It's just the game that we've in situation that we've been presented that we have, we have to play. So we're paying a lot of attention and how we can continue to lobby to, to help legislation and the public understand what those cuts mean to, to our communities without getting to a to see, you know, rising infant mortality rates and access closures and more and more hospital closures or service line enclosures such as surgical aspects of the hospitals and labor and delivery service lines will just escalate, you know, pretty, pretty quickly. And I think we're already starting to see that in the provider populations where some of the physicians are seeing the writing on the wall and starting to somewhat retreat back to the city. So we're trying to get ahead of that. You need to be thoughtful about that and make, make change to that. So definitely attention is placed there. But also, you know, looking at how I have to change the approach of go to market strategy in a non profit entity and, and bring some that for profit tactics into play in order for the hospital survive. We, we just can't sit still in between our four walls and keep a chair warm. We have to be transformational CEOs and, and that's kind of what I've coined myself. I'm not a hospital CEO. I'm a transformational CEO that has to bring and drive change with inn novel ideas and create teams and high functioning teams that can that feel welcome to bring those ideas to the table in order to drive our organization forward. And I think the last thing is it's consumerism and we've talked about this for 20 years in healthcare. You know, patients have a choice and so patient experience is just at the forefront. Provider relationships making sure that we're not directing our physicians and how, how to care but partnering with them, having a different set of attitude and support and equipping them with the tools in order to be successful so they stay in our rural environments and treat our communities. So I'd say those three things are at top of mind for our particular organization.
- [07:18]
A
That's fascinating to hear and I love the way you stated that in terms of looking at, you know, the big and very real challenges coming from the federal government, the big beautiful bill and potentially down the pipe if it happens the way it's written in the bill, you know, stands to really cut a lot from all health care entities, but in particular the rural health care. And so trying to figure out how to mitigate as much of that as possible before it goes into effect and then to you know, providing care in a really challenging time, being a transformational CEO and taking that mindset. What does that mean for you? How do you do that in a setting that you know, isn't always necessarily known for embracing change in rural and in healthcare?
- [08:04]
B
Yeah, you have to rely heavily on data. And so we partner with Benzite who is a small boutique firm, as I mentioned, out of New Orleans, truly looking at the opportunities of growth and so analyzing market presence, analyzing disease states, very strategic marketing and targeting certain populations and age demographics that align in order to gain their participation in and our services I think is the, is, is, is the absolute key. And that's something that you would typically see, you know, in a, in a, in a for profit status. The things that make it agonizing at times is you know, critical access hospital and that model, that cost based model isn't, isn't set for you to be having easy access to gain profitability and in that profitability and health systems, you know, the hospitals are just, you know, taking that profit and pushing that back into the organization to grow the organ. So investing in service lines and, and, and providers and in the tools in order to be successful. Updating infrastructure which you know, I don't think our country has talked much about, that is aging in many of our hospitals. These are things that you have to, you have to do. And so, you know, it's a cash flow game for us. And so every dollar of cash flow that comes in, that's, that's, that's positive at the time. Not, not necessarily at year end we have to reinvest and you know, and, and buy clinics and buy a ramp up period. And I think that's the biggest challenge right now with, with, with OB and labor and delivery. It's not a, you know, turn on the light. It's a lot more complex than that. And you typically ramp up. It's a very intimate relationship between patient and provider. And so there has to be, there has to be some, some dollars behind that in order to compensate for a loss temporarily until you can start churning a profit. When your volumes get to where they need to be in reimbursement kicks in and so on and, and so it's really difficult as a critical access. It's, it's, you have to be really attuned to your finances as well as really rely on your data and listen to your team and making sure that your leadership team is the right people and truly listen to their ideas and apply those and give them autonomy to implement those ideas.
- [10:27]
A
Absolutely. I love that and thank you so much for digging a little bit deeper there now. Looking ahead into the future, where do you see some of those biggest opportunities for growth in the next few years? What do you see as being areas that could really make that transformation happen and realize, you know, a continued thriving hospital?
- [10:46]
B
Yeah, I would tell you, take your pick in rural environment because access is it to me. And you know, you know, a typical urban setting where a patient has a choice of, you know, 50 providers or is physicians or you know, four or five different, you know, health organizations, you know, to, to choose from. The rural citizens of America don't have that luxury. And in many cases it's either a single entity or the service isn't, isn't there. And so for us it's, it's a blank slate. I mean it's, it's an open field of opportunity. But you know, like I said, we have to look at almost a for profit approach. And so we look at profitability in certain service lines and, and, and, and push towards that direction. So orthopedics is something that, you know, was number one on our list and we got orthopedics going and started that. Those numbers obviously present, present very well. So the opportunity is endless for Newman. But as of, you know, as of right now, this, this past month we dove into, you know, a bordering county and, and partnered with some long standing providers to capture primary care base that can help feed some of those outpatient services that, that truly keep the lights on. But we just can't, like I mentioned, we can't just sit in our four walls and rely on, you know, the typical swing bed patients in a critical access hospital. I think if, if colleagues out there are doing that, they're slowly working their way towards closure. And, and so we, we do, we have to, we have to approach the market just as our, our urban partners have been forced to approach it.
- [12:20]
A
That makes a lot of sense, you know, truly, truly having that active, you know, outreach in mindset that you have to get ahead of it, play that offense, that profitability mindset into the nonprofit hospital setting, you know, makes a lot of sense. I can imagine it's easier said than done, but you know, truly, truly fascinating to see what you've done. And as you mentioned, orthopedics is something that so many, you know, hospitals and health systems are seeing as a service line that is very much needed and like you said, something that they can bring into their organization. So can you tell us a little bit more about what you've been doing with orthopedics as well?
- [12:58]
B
Yeah, so. So Dr. Zane Uland is our orthopedic surgeon. He actually drives out to Shattuck, Oklahoma, three times a week, two and a half hours here, two and a half hours back. Just a gem of a human being, just completely devoted to the rural environments of Oklahoma. And, you know, when I initially sat down with him, he said, you're the sixth CEO of this hospital that I've sat in front of. I'm not sure this, this will probably work, but I'm willing to have that conversation. And I just said to him, I said, if you're, if you're coming out here and you're willing to come out here, you and I can put our brains together and work as a team to figure out how we do this. And I think the response from Dr. Yellen is like, you know, it's more of a partnership. And that's exactly what I mentioned a little earlier about partnering with physicians and surgeons and, you know, clinical staff, nursing staff to staffing agencies is, is to approach that relationship a little different. Like, hey, we're in this together. How do we work through this? How do we figure this out? And so Dr. Yulen and I have worked in partnership and helping to bring back life at the hospital. And I truly believe, Laura, the best way to recruit physicians at your organizations is through physicians. And because there's such a huge amount of respect amongst them within their community that if they're sharing that word of, hey, this is a great organization, this is a great hospital administrator to work with, that makes that conversation a little bit easier. Incredible. And so we've been able to do that. So now we're attracting more orthopedic surgeons from Virginia that want to travel out here to do techniques and procedures that's cutting edge that you would typically just see in major medical systems or academics. Some of our medical centers within the city, in high brand names that we're seeing in real health. And we've actually been transporting some of those patients out from the city two hours away to come here and do that by providing transportation from the city out here in accommodations in our community, in bed and breakfasts, and treating them almost like old school medicine. And you can read those reviews on, on Google around how Newman is approaching that. But it also brings economic value to our Community, which helps our community thrive locally, which, you know, the real communities in Oklahoma are starved since oil and gas has somewhat vacated the area.
- [15:20]
A
That's fascinating to hear and truly amazing to think about how as a healthcare organization, as a hospital, you know, you aren't limited to the services you're providing just within the four walls of the hospital, but can make an impact so much more broadly on the community and the wellness and health, economic and quite literal health of the community too. So that's amazing to hear. Before we wrap up, I wanted to ask, just, you know, what do you think it will take to lead a thriving organization over the next five years, given all the challenges, but also very real opportun that we've been talking about? What is the ideal leader for hospitals and health systems look like?
- [15:57]
B
I would tell you that the CEO of Mayo Clinic is absolute idol of mine. And I read every, you know, everything that he, he writes, it's just, it is and it's just a credible organization. But he talks about being bold and kind of moving forward. And even, even I would argue that Mayo is number one health system in the world. Even there the approach is somewhat the same and I agree with him. You have to be bold, you have to be willing to take risk, you have to be okay with making mistakes at times. You have to be willing to be a little bit aggressive on your approach and novel. You have to be willing to leverage analytics and data and helping to make decisions. You have to be well groomed at developing and recruiting high functioning teams and in the environment of both urban and rural, you have to be very commutative. You have to be a servant leader. You have to be willing to engage in the communities and allow community benefit to stimulate participation within your system. You have to go to the state capitals and serve on boards like the Oklahoma Hospital association and share that word so we can get inside the legislators and help with policy. You have to do all those things. And I'll tell you, it's not, it's just not a 40 hour a week job. It's a lifestyle. I wake up every morning. The first thing I think about is Newman Memorial Hospital. The last thing I think about when I close my eyes at night, Laura, is Newman Memorial Hospital in Ellis county in rural Oklahoma. And how I can add value and do my part to help move that health ranking from 49th North. And I think we need to take that mentality across our nation in every state. And I think that we'll start to see the tide turn. We'll start to see our national government make, make logical decisions and, and start to put our real communities and rural citizens at the forefront. And, and I think great things are on the horizon for our country and nation with health, even in a time of adversity. And so being optimistic, I think I'll close with that being, you know, just being positive and not dwell on the negatives, but look at the answer and the solutions. And I think that if you do those things and if you do all of those things, because I don't think you can just do one or two, I think you'll have the same results that we've seen at Newman Memorial and probably one of the, you know, most difficult arenas of healthcare right now in our nation. You know, this little tiny hospital is, is thriving, and it's. It's just wonderful to have been a part of this for the past three years.
- [18:43]
A
That's amazing. Tom, thank you so much for joining us on the podcast today. This has been such a fun and invigorating conversation, and I look forward to seeing you at our November CEO CFO Roundtable as well. I know you'll be speaking there. It'll be truly fun to continue this conversation and see what new perspectives have arise by that point as well.
- [19:03]
B
Well, thanks, Laura. I appreciate the opportunity and absolutely, I'm really looking forward to Chicago and, and speaking at Becker's and continue to share my experiences and learn. So thank you for the opportunity.