Leadership for a Pandemic

Bill Griffin

Executive Vice President and Chief Financial Officer

Baptist Memorial Health Care Corporation

2020 TN HFMA Virtual Fall Institute

BAPTIST MEMORIAL HEALTH CARE CORPORATION

NorthMississippi

Golden Triangle

UnionCounty

Booneville

Calhoun

Huntington

Union City

Tipton

NEA Baptist

Attala

Leake

Jackson

Yazoo

Mississippi

Arkansas

Tennessee

Collierville

Desoto

Crittenden

Memphis Hospitals:

MemphisWomen’sChildren’sRehabilitationCrestwyn BehavioralRestorative

22 Hospital800+ Employed physicians18,500 employees

POLLING QUESTION #1

• Who is your favorite Star Trek Captain?

1. Captain James T. Kirk (William Shatner)

2. Captain James T. Kirk (Chris Pines)

3. Captain Jean Luc Picard

4. Captain Benjamin Sisco

5. Captain Catherine Janeway

6. Captain Jonathan Archer

7. Captain Christopher Pike

IN THE BEGINNING……………..

• As early as December/January, we were collectively discussing the threat being seen in China and Italy and what it could mean to us.

• How do we address a “scorched earth” financial scenario if we were to experience long-term shut down like those in other countries?

• The immediate challenge we concluded was to act quickly and decisively to prepare for the worst possible scenario.

• Collectively, the finance and operations leadership developed responsive strategies.

FINANCE STRATEGIES

Finance Strategies

“URGENCY IS NOT HASTE, IT IS PURPOSEFUL ACTION.”

“UNDERSTANDING WHAT MUST BE DONE AND ACTING WITH A SENSE OF URGENCY

ACHIEVES THE BEST RESULT”

Three immediate finance priorities were identified:

1. Ensure ongoing liquidity by protecting cash flow

2. Manage the potential loss of revenues from reduced services

3. Restore pre-COVID financial performance

Finance Strategies

Anticipation of a mandatory cease in elective procedures could result in 40% to 60% reductions in net revenues.

Three month 40% impact = $290,000,000 NPR loss and cash flow disruption

Average bi-weekly payroll = $40,000,000; Average bi-weekly AP = $40,000,000

Avoid liquidating the corporate investment portfolio

Cash Flow CHALLENGE???? YES!

Government Stimulus Relief to the Rescue - with lot’s of unknowns:▪ Stimulus payments from the government and expense recovery from the Federal Emergency

Management Agency (FEMA)

▪ Little guidance initially available as to how to get the funding and criteria to utilize the monies.

▪ Complexities in the process included:

▪ How to Apply

▪ How to Attest

▪ Internal management of fund flow / inventory of the relief monies received

▪ How to account for the funds in the general ledger

▪ Bank/investment management

▪ Ongoing reconciliation of the monies received

▪ Concern over being able to provide a clear & concise accounting of all the various funding's and usage when it came time to report to the governments.

▪ And…consultants emphasizing the complexities and offering to aid for $$$$$$’s

Finance Strategies

• Realizing that managing all the relief funding was going to be an organizational challenge different than anything we had faced before I quickly decided I needed an internal Finance Super Team…………….

I needed The Avengers

Finance Strategies

From the book “Leadership in the Era of Economic Uncertainty” By Ram Charan

Six essential Leadership Traits for Hard Times

1. Honesty & Credibility

2. Ability to inspire (resolve, fearlessness and optimism)

3. Real-time connection with Reality• Reality is a moving target• Continuous monitoring of change with ground-level intelligence• Constantly updating your reactions and responses

4. Realism tempered with Optimism• Understand and accept the magnitude of the challenge• Few problems are unsolvable• Focus the Team on vision• Leadership is a Performing Art

5. Manage with Intensity• Hands=on participation• In the Foxhole

6. Boldness in Building the Future

Finance Strategies

My Avenger’s Super Powers

Competency:

➢ Extreme organizational skills

➢ Adaptability

➢ Detail obsession

➢ Rules focused

➢ Fearless in challenging and questioning

➢ Humble Professional

➢ Team Player

Personal Integrity (in word, deed, idea and principle)

Intellectual Honesty

Great Communicator

Finance Strategies

“One who is routinely true to their self and

others is one who can be trusted and relied

upon in a crisis situation”

“Success in a difficult mission is often due to

those who acted when action was required

and when others might not recognize reason

to take action”

“The cooperative, collaborative and

corroborative efforts of an entire team will

most likely result in mission success”

Where did I find the Super Heroes that became my Avengers

??????????????

New department…. “Department of Special Reimbursement”

Established daily meeting with the Director of Special Reimbursement to review status

After Assembling the Avengers, we tackled the earlier mentioned challenge of cash liquidity

Finance Strategies

LIQUIDITY: How did we ensure that we could meet the potential short-term cash demands without dissolving the investment portfolio?

Answer:

❖New Bank Line of Credit

❖Medicare Accelerated Advance Payments

❖Deferred Employer Payroll Tax

• All are basically loans and must be repaid at some point

Finance Strategies

POLLING QUESTION #2

• A recent poll ranked the songs shown below as the top 5 Beatles songs of all time. Which of these 5 would you rank as #1?

1. Please, Please Me

2. Penny Lane

3. A Day in the Life

4. She Loves You

5. Strawberry Fields

Finance Strategies

What is the Provider Relief Fund?

The Provider Relief Fund supports healthcare providers in the battle against the COVID-19

pandemic. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the

Paycheck Protection Program and Health Care Enhancement Act (PPPCHE), the federal government

has allocated $175 billion in payments to be distributed through the Provider Relief Fund (PRF).

Qualified providers of health care, services, and support may receive Provider Relief Fund payments

for healthcare-related expenses or lost revenue due to COVID-19. Separately, the COVID-19

Uninsured Program reimburses providers for testing and treating uninsured individuals with COVID-

19.

These distributions do not need to be repaid to the US government, assuming providers comply with

the terms and conditions.

Finance Strategies

Phase 1 General Distribution

•$30 Billion General Distribution

•$20 Billion General Distribution

Select Targeted Distributions

•COVID-19 High-Impact Area Distribution ($22 Billion)

•Rural Distribution ($11.3 Billion)

•Allocation for Skilled Nursing Facilities (SNFs) ($7.4 Billion)

•Allocation for Indian Health Services (IHS) ($500 million)

•Allocation for Safety Net Hospitals ($14.7 Billion)

•FEMA Expense Reimbursement

Managing and Tracking the Stimulus Relief Payments

▪ Multiple payments received for multiple entities over multiple months

▪ Early desire to:▪ Thoroughly understanding each funding opportunity and its application to the organization

❖Resulted in a 50+ page log documenting descriptions, process (including attestation method and dates), reporting requirement and decisions for every funding opportunity

▪ Track every fund payment in detail….amount, entity, date, method of calculation, recalculation, reporting, usage.

❖ Resulted in a very detailed financial report that is a living document

▪ Account for every fund payment separately in the Balance Sheets as Deferred Revenue until utilized/recognized in the Income Statement

▪ Maintain separation by fund type in the bank account (utilized our investment portfolio)

▪ RECONCILE ALL THESE COMPONENTS CONSTANTLY!!!!!!!

Finance Strategies

Utilized as

Available Revenue or Funds

Descriptions of Funds Amount Received Expense Offset Available Qualifying Expenses

Advanced Funds For Liquidity

Medicare Advanced/Accelerated Payments

Hospital Payments Offset against future Medicare payments beginning in August 2020

Professional Payments Offset against future Medicare payments beginning in August 2020

Deferral Of Employer Payroll Taxes We must re-pay in 2021 and 2022

Arkansas BCBS Advance Payments - NEA & Crittenden Offset against future ARBCBS payments beginning in late fall of 2020

Bank Line Of Credit Revolving line available through end of May, 2021

Totals Loans -$ -$

Stimulus and Grants

CARES Stimulus General Relief Programs 1 and II Lost revenues that are attributable to coronavirus.

CARES Stimulus Targeted: Rural Hospitals Lost revenues that are attributable to coronavirus.

CARES Stimulus Targeted: Rural Referral Center: Lost revenues that are attributable to coronavirus.

TN Rural Hospital Grants - Specific allowable expenses

CARES Stimulus Targeted: Safety Net Hospitals Lost revenues that are attributable to coronavirus.

CARES Stimulus Targeted: Hot Spot Hospitals Lost revenues that are attributable to coronavirus.

CARES Stimulus Rural Health Clinic Testing Payments COVID 19 Testing Expenses

Small Rural Hospital Improvement Program (SHIP) -

MS - Patient & hospital personnel safety, testing, lab services, staffing levels, infrastructure, equipment, supplies

TN - Patient & hospital personnel safety, testing, lab services, staffing levels, infrastructure, equipment, supplies

ASPR - (DHHS) Secretary for Preparedness Response

AHA Supplies & equipment including PPE, staff training infrastructure, telemedicine,

MHA COVID-related expenses or lost revenues

THA PPE, supplies for lab testing, supplies & equipment for decontamination & reprocessing of N-95 masks

Medicare Sequestration Suspension Effective May 1 - Dec 31, 2020

Uninsured Testing/Treatment Reimbursement

Hospital

Professional -

Baptist Health Sciences University HEERF PBI Grant

Baptist Health Sciences University HEERA Students Pass through to students

Baptist Health Sciences University HEERA Institution

Arkansas Ready Business Grant COVID-related expenses

Blue and You Foundation Grant

Arkansas Coronavirus Relief Funds - Specific allowable expenses

Mississippi CARES Act Funding - Hospital Specific Specific COVID-related expenses

Nursing Home Communicative Technology Technology ( 9 ipads)

Baptist Mobil Outreach Operations Safety Net Provider Grant COVID-related expenses

Ms Dept of Health CARES Funding -Rural Hospitals COVID-related expenses

TN Community CARES - Baptist Grief Center Specific to Baptist Grief Center needs

MS IM Residency Program -

TN COVID 19 Hospital Staffing Grant -

Total Stimulus and Grants -$ -$ -$ -$

Total Loans, Grants and Stimulus Money -$ -$ -$ -$

SUMMARY OF COVID-19 RELIEF FUNDS

Finance Strategies

Managing and Tracking the Stimulus Relief Payments (Continued)

The various funds have requirements to receive and utilize the funds:

➢ Attestations (various portals and dates to attest)

➢ General or specific uses

❖ Shortfalls in net revenue (general guidance on that definition)

❖ COVID specific expenses (very defined to generally defined)

❖ Combination of net revenues and expenses

❖ General operating expenses (grants concerned with going concerns)

❖ Specific services

❖ Hospital System versus Entity Specific as to usage of the funds (lends to the need to track closely if a System)

➢ Reporting requirements

❖ Reporting mechanisms and structure vary in definition (specific to not yet released; paper vs electronic)

❖ Various dates to comply

ORGANIZE ORGANIZE ORGANIZE ORGANIZE

Managing the Loss of Revenues and COVID Expenses

❑ Initial decision to use CARES funding to primarily restore lost revenues and focus

on FEMA reimbursement to cover COVID specific expenses

➢ HHS Guidance on rev shortfall: actual to budget; actual to comparable PY period

❑ Developed an allocations model to support consistent monthly recognition of relief funds

in the income statement for net revenue shortages caused by COVID 19.

➢ Provides standardized method for fund utilization across multiple entities

➢ Will be used to “defend” the utilization of funds when HHS requires a reporting

➢ Allows for accounting of ongoing balances by fund, by entities (general/specific)

Finance Strategies

Managing the Loss of Revenues and COVID Expenses (cont.)

Began recognizing stimulus funds in April to cover net revenue shortfalls and have continued through September. Largest

amount recognized in April and need has reduced in line with recovered volumes beginning in May.

We focus heavily on which relief funds are used to cover entity NPR shortfalls since we have multiple entities and both general

use and specific use fund.

We also have received some CARES relief funding that can only be used for specific COVID expenses. We are reimbursing all the

COVID expenses we can first with these kind of funds before applying to FEMA as a payer of last choice for COVID expenses that

qualify. FEMA will only cover specific expenses and only at 75%.

WORD OF CAUTION: Go to great lengths to be sure you don’t double dip on the expenses you use to justify relief fund

usage and then also use again for other funds or with FEMA.

STAY ORGANIZED IN THE DETAIL

Finance Strategies

Finance Strategies

An Example of Reporting

• $7,500,000 in funding received from State of Mississippi for 1o hospitals.

• Requires monthly reporting of expenses that the funds are covering.

• Requires completion of specific reports and inclusion of detailed invoices/support. Hardcopy only…..no email.

OPERATIONAL STRATEGIES

In January, strategies began to be developed to deal with the operational impact from the looming pandemic

Initial step was formation of a Corporate Pandemic Steering Committee

Met seven days a week from late February through April

Twice weekly May to current

Operational Strategies

Communications PlanCommunications update

Surge Preparedness and Response Plan

Current condition and System Stats

Bed capacity updates (PPC) Supplies Update/Data tracking

Epidemiology Surge Prevention PlanOutbreak tracking

Visitation Memphis testing

HR/employee health policiesTherapy and vaccination updates

Business response, expense capture and revenue restoration

Reporting/registries/business registries

Financial Business needs

Example Agenda

LaboratoryEm. PreparednessVP-CIOSupply Chain

Pres Baptist universityVP-HRVP-Physician

Practices VP-Market Ops

(3)

Epidemiology : Surge Prevention Clinical Ops Oversight Team

VP-CMOVP- NursingSVP-

Communications

Infection PreventionMarket Leaders

CNO’s CMO’s Communications

Supply Chain

Emergency Preparedness Finance BMG IT/BOC

HR/Employee Health

Regulatory/Risk

Lab/Resp. Therapy Pharmacy/Radiology

Executive Oversight Team COO Lead

CEO, ChairSenior Team

BMHCCCovid-19

Response-Planning and Oversight

PPC

Priority Ambulance

SVP-CLO

LHC/Home Health

Baptist College

Surge Preparedness and Response

Supply Chain

EVP-CFO

CEO’sSystem Services

Finance

Communications

OLGProviders Nurses

Public

Patients

• Avoid individuals with an Influenza like illness (ILI)• Don’t travel unnecessarily• Practice Hand Hygiene• Don’t touch your face, nose and eyes• Don’t Expose Others if you have upper respiratory symptoms

Communication Plan

SIPP*(Standard Infection Prevention Protocol)

*see BMHCC Pandemic Flu Plan for greater detail

Customers(and visitors)

Team Members

Professional Providers

• Screen employees for fever ILI symptoms • Isolate patients with suspicious symptoms or positive screen• Use PPE appropriately!!

• Don’t expose others if you suspect you have an influenza like illness (ILI)• Travel restrictions

• Encourage concerned patients to stay at home if symptoms are mild• Screen patients with ILI symptoms• Test “screen positive” or patients with suspicious symptoms per algorithm (crucial)• Isolate patients who test positive, screen positive or who have suspicious symptoms• Use PPE appropriately• Offer homecare for individuals with mild-moderate symptoms• Utilize PPC for patient movement and bed/facility assignment

Homecare(LHC)

• Home evaluation for ongoing surveillance• Home testing for selected individuals• Homecare for coronavirus positive patients in stable condition

Lab Partners• Deploy testing algorithm• Health Departments, CDC• AEL, Quest, LabCor

Ambulance Transport(Priority)

• Priority• Home evaluation and possible testing/screening mobile unit(s)• Transport

SEP(scorched Earth Plan)

• Emergency plan to protect vulnerable employees?

• Extended hours plan• Access to PRN staff

Critical Professional Provider Plan• Infectious Disease: Telemedicine Expansion?• Critical Care: eICU expansion and offerings?• Acute Care Surgery• Hospitalists• Primary Care: Telemedicine expansion?

Executive Oversite and Operational Oversight

Teams

Facilities• Activate/Update Pandemic Preparedness plan• Covid-19 response drill• Activate Entity Communication Plan• Limit entrances, fever screen employees and visitors• Plan outdoor screening/testing sites• Visitor Limitation policy

Supply Chain• Sequester critical supplies and equipment• Prepare supplies and equipment for “need-based” distribution and rationing• Move to gain approval to use outdated items

• Activate pandemic plan• Designate Elective, Non-Covid-19 care• Designate Emergent, Covid-19 care• Set up screening outside of ED’s • Mobile Van, Modular clinic, Tent, etc

HR • Conduct daily staffing reviews and facility support• Oversee attendance, furlough, sick leave, and travel policy

adjustments

• Stand up staffing incident command ctr.

• Screen for fever, ILI travel prior to visiting hospital• No children under age 17 allowed to visit

Surge Preparedness

and Response

Epidemiologic Surge

Prevention

SURGE PREPARATION

27

Operational Strategies

Covid-19 Information Sharing and

Communication Plan• Internet landing site

• FAQ’s

• Updated content daily

• MyChart Messages

• Marketing plan with vendor

• Covid Care Kit (CCK)

• Screening language and work flow

External

Customers

Team Members• Intranet landing site

• FAQ’s

• Updated content daily

• Leader articles

• CEO weekly letter

• Entity town hall meetings

• Daily Nursing bulletinProfessional

Providers

• BOC-411

• APP-COM Plan

• Medical Staff meetings

• Medical Group COM plan

• CEO communications

• CMO/CEO BMG

communications

• Physician and APP daily

bulletinExecutive Team • Daily Executive Oversight Mtg

• Daily Operations Oversight Mtg

• Daily CEO Roundtable

• Senior Leader Team Mtg

• OLG Mtg

Media • Marketing and Communications

• Marketing plan with vendor

Operational Strategies

Epidemiologic Plan to Blunt the Covid-19 Surge

• Communicate with the public, our patients, our providers and our employees extensively.

• Support social distancing, careful hand hygiene, and government lock-downs to prevent community spread.

• Utilize barrier precautions as much as possible in the form of masking (patients, providers, staff, visitors, the public)

• Communicate the need for symptomatic individuals to stay at home in quarantine.

• Symptomatic patients can and should be tested (Test,test,test).

• Quarantine and contact trace positives.

• Follow-up with all positive results via telemed

• Establish COVID 19 Resource Center to answer questions and follow-up on negative results

Covid-19 Resource Center Call

Operational Strategies

Dr. Stephen Threlkeld, Infection

Disease Physician at Baptist becomes

the voice of all things COVID in The

Mid-South.

COVID 19 Testing

With multiple testing sites available in all three state we serve, Baptist has been the leader in the Mid-South for COVID 19 testing since the beginning of March.

Through September 17th we have provided the following:

Nasal swab (PCR) test count: 256,665 | Positive: 10.27%

Antibody test count: 7,808 | Positive: 12.55%

Operational Strategies

Other Operational Considerations:

Capital Expenditure – all halted unless emergent in nature

Human Resources –

o Decision not to have layoffs

o Limited furloughs, as necessary

o Compensation issues driven by COVID

✓ Clinical salaries vs rising contract labor

✓ Migration of nurses to other states

✓ Clinical retention programs

o Work From Home Program (at its peak we had over 1,100 employees working from home)

Supply Chain Logistics / Inventory Management – PPE demands; bulk orders from China; unique shipping arrangements; price gouging

Daily Governmental Reporting requirements

Community & State Health Department coordination

Operational Strategies

POLLING QUESTION #3

• Which of the following Disney World treats is your favorite?

• Mickey Mouse Premium Ice Cream Bar

• Dole Whip

• Churro

• Mickey Mouse Waffles

• Disney Themed Cupcakes

Exude honest conviction that the company will come through the pandemic successfully.

Present facts and details of the company’s financial health under different scenarios and reporting.

Be constructive and specific in directing how resources should be reallocated and manage cash “as KING”.

AVENGERS, ASSEMBLE!!!!!

PARTING CFO WORDS OF WISDOM

PARTING CFO WORDS OF WISDOM

• What has sustained my drive so far during these difficult time ?

• Knowing I can be a part of ensuring that the organization has the resources to care for our patients & families;

• Knowing I can be a part of ensuring that our employee heroes have the resources to be safe and that they have a paycheck when they get home;

• Knowing that I had a part in ensuring that our organization maintained its financial health during the pandemic and will continue to do so when we come out on the other side.