Lifespan is looking to add clinicians and expand its footprint. What it's not looking for is a merger partner, says CEO John Fernandez.
It's been a challenging few years for the five-hospital nonprofit system, battling financial fallout from the COVID-19 pandemic and scrapping in 2022 a long-discussed merger with Care New England. Lifespan hired Fernandez as CEO earlier this year, and soon after restructured its leadership team to better align operations and encourage faster decision-making.
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Efforts seem to be paying off. Providence, Rhode Island-based Lifespan was back in the black during the first nine months of fiscal 2023, reporting net income of about $45 million, compared with a $142 million loss in the year-ago period.
Fernandez formerly was president of Mass General Brigham Integrated Care and specialty hospital Mass Eye and Ear. In an interview, he spoke about plans to improve revenue and access to care. The interview is edited for length and clarity.
Where do you see revenue opportunities?
We have patients who want to come here and can't get an appointment. We need to fix that. I’ll give you an example. When I got here, we had one thoracic surgeon. We just hired a second who started in September. If you think of a 24/7 service … you need at least three to four thoracic surgeons to have a service that keeps our surgeons from burning out, and then the pulmonologists who go with that. Those are the kinds of things that we can fix, and we're in the process of doing that.
We’ll definitely expand our ambulatory footprint, so we are in places easier for patients to get to, whether it's primary care [or] specialty care.
We're changing our primary care model to surround our primary care doctors with nurse practitioners and medical assistants and pharmacists, so we can accept more primary care patients. And then having the specialists that are needed to meet the demands once you expand that pie. We'll look at opportunities right where we are in Rhode Island, but also across borders.
Are you changing your physical footprint?
We're doing two things. One is to look at our footprint and see if there's any part of our footprint we could reduce. We know that we have spaces that because of the work-from-home or hybrid workforce, we are taking a serious look on that side of it.
Where are the sites we have, and should we close some and open new ones? Should we open two or three more urgent cares? They've been very successful for us from a patient satisfaction but also an access point of view. Those are on the drawing board but not ready to execute.
We have some offices where we need to add doctors because we lost a couple, but we have places where we can add some specialists or add some primary care doctors in the location. Having those new locations will definitely be part of our future. It’s just where, and how quick?
What are the biggest challenges?
[No. 1 is] how do we create better access for our patients, whether that's digital [or] people? No. 2 is retention of staff and recruitment. Retention seems like the thing we can control a little more, and if we can retain more, we need to recruit less.
Third is how do we create jobs in this region? The state has set aside $45 million to invest in research and incubator funds and things like that. More jobs in this region mean more people with insurance, so from a self-serving point of view, that's better than people with no insurance or Medicaid. That will help us.
Lifespan has to improve its financial performance and make a 3% or 4% or 5% margin, and be able to invest in our people, programs and buildings.
What is Lifespan’s financial situation?
We're doing a lot better than last year, but the benchmark was a little low.
We're working on how do we get improvement in top-line growth, whether it's rates, taking more risk, taking care of more people and service mix and all the sort of traditional things you'd see in healthcare to help with the revenue line? Then, on the expense line, how do we use automation in supply chain? Nothing earth-shattering. Just good, old-fashioned blocking and tackling.
Has Lifespan seen improvement on patient volumes?
We’ve had increases in volumes in procedural areas. We could do even better if we filled some of these vacancies. We have plans next year [and] a budget that we feel pretty good about that will continue to encourage those to occur and get people to stay at our hospitals versus go to other ones.
If we do a better job with access, we aren’t worrying about the patient volume too much. It's when we make it hard. Then they go to another hospital. They go to Boston, they go to Yale, and they wanted to come here, but you can't tell somebody to wait a month for a specialist appointment and hope that they'll stay.
Are there any cost-saving initiatives?
We have a great opportunity for automation, especially in the supply chain business functions, accounts payable. Our CFO Peter Markell is working on, how do we bring ourselves into a highly automated [operation]? The automation is probably our biggest effort we’ll take part in during the next year, year and a half.
Would that automation result in layoffs?
I do not see layoffs coming. Could we? It's always possible, but we have so many people we’re looking for. I, frankly, would love to have the problem of having to do layoffs.
Are you keeping an eye out for M&A opportunities?
We are not. We're not looking to do more mergers. This organization has been talking about being merged into somebody or acquiring somebody for, give or take, a decade. As a CEO, I'm always open if it will help us provide better access, make us money or help our research a lot. But, right now, nobody's come to me with a proven patient experience, more money or any of those three.
People love to ask me, would we go revisit the Care New England thing? The answer is two letters. No. [Care New England CEO] Mike Wagner and I, we know each other well. We talk all the time, but we’ve got to get ourselves in order to do what's right for our patients and not waste our time and money on mergers and acquisitions.
