In this episode of Fireside Chat, we sit down with Barclay Berdan, CEO, Texas Health Resources to talk about the COVID-19 pandemic and how the health system is managing communication, working from home policies and PPE.
Please note: The number of COVID-19 cases and the situation referenced in this episode were based on reported data at the time of the interview and are subject to change.
Barclay Berdan 0:03
We had identified some time ago a relationship with a company that actually produced PPE locally. One of the… there aren’t a whole lot of them, but they produced it locally. We supported them, even though maybe their pricing was a little bit higher than we could get from overseas and bought a lot of products from them. And they proved to be a very loyal supporter of our organization through all this.
Gary Bisbee 0:28
That was Barclay Berdan, CEO, Texas Health Resources, Barclay explained how THR’s is long-standing relationship with the local PPE supplier, allowed THR to avoid problems inherent in the global supply chain for PPE that has caused substantial disruption in the care of COVID patients throughout the country. I’m Gary Bisbee, and this is Fireside Chat. Barclay discuss the approach that the four counties of North Texas have taken with the coronavirus outbreak and the coordination between local county and state officials. He outlined the virtual dashboard that THR developed to monitor COVID growth use and the need for PPE and staffing and the analytics that are associated with it. Barclay reviewed the effect that postponing elective surgery has had on THR’s financials. And it’s currently strong balance sheet. He spoke about THR’s commitment to its physicians and employees, and that there have been no furloughs. I’m delighted to welcome Barclay Berdan to the microphone.
Good afternoon, Barclay.
Barclay Berdan 1:34
Good afternoon, Gary, how are you?
Gary Bisbee 1:36
Well, thank you, sir. Welcome to the podcast.
Barclay Berdan 1:39
Thank you. It’s a pleasure to be here.
Gary Bisbee 1:40
We’re all facing the COVID-19 outbreak and we appreciate your joining us to discuss what is the status of the surge in North Texas and how Texas Health Resources is responding. So why don’t we start with the Coronavirus timeline? How are things faring there in North Texas?
Barclay Berdan 1:57
Well, I would say in North Texas we’re maybe in the early phases of the surge. We actually started in Texas fell, officially standing up some of our management groups and probably about the end of the last week of February and have been tracking things and advancing things ever since. If I fast forward to today, we have had so far 23 deaths in the four-county area of Collin, Dallas, Denton, and Tarrant County, which are the main four counties of North Texas. And we’ve had 1409 cases, positive cases.
Gary Bisbee 2:40
Have you had any indication from the CDC about when it’s likely to hit?
Barclay Berdan 2:45
Gary when we first started looking at a number of the models that are out there, we thought that the peak would happen this week. The current models really have the peak happening really much later in April or early May. A big issue has been testing capability which has been a challenge here in North Texas. What we do know is that our growth rate right now is between 15 to 20% for the past several days, and probably a lot of people have seen models that have sort of best average and worst curves attached to them. And right now, our modeling would say we’re probably closest to our average curve.
Gary Bisbee 3:27
Any sign that the testing supplies are going to become more available?
Barclay Berdan 3:32
No, there been a number of new tests become available. But one of the challenges that we have had in North Texas is trying to get ahold of the test kits. FEMA has intercepted them and redirected them. So we have now got the ID now test kits that are available and we’ve distributed them to all of our hospitals. We’d like more but right now we’ve got the capability to do about 2000 a week, and that’ll go up. We expect to next week, bring an Abbott M 2000 online. Which will give us the capability of doing about 3000 a week if we get the test kits. You know, the other thing that’s occasionally off and on been a challenge has been the media and the swabs. The last week or so that doesn’t seem to have been a problem. We stood up some remote testing sites that were walk-in for our physician group that serves the patients of our physician group. Opened our fourth one this week, spread across North Texas, and so far, we’ve been able to keep those going. Each site can do about 50 tests a day. We’ve been monitoring PPE as well as test swab and media material and they’ve been able to keep up with it. So that’s a good sign. A couple weeks ago, I guess the federal government brought two testing stations to Dallas, that was located here that were capable of doing several hundred tests a day each. Unfortunately, I saw in the mayor of Dallas’s website that they’ve told him that on April 10, they’re going to pack up and go home. So that’ll put a dent in it. Clearly understandable that as they stood up their commercial capabilities, that they were flooded with tests, and we’ve seen them struggle with that at times. But right now we’re seeing the average time for a commercial test turnaround to be two to two and a half days. Maybe one day, but more likely two days. Maybe three days, more likely two days. We’re really thinking by the time we get to the end of April, internally, we’ll be able to do about 6500 tests a week. And that’ll really help us in the hospitals because right now, we have had a substantial number of PUI’s (persons under investigation), who are awaiting responses from the commercial testing that are occupying beds. And what we’ve generally found both in our outpatient testing and in our inpatient testing is that somewhere around 10% to 12% of those folks are going to test positive. But the ones in the beds may or may not have to stay in the hospital and we’d like to free up that capacity. So, you know, when we’re chewing up PPE it’s just not a great situation. The first thing is getting testing available in house so that we can get determinations on the PUIs and the people in the emergency rooms so that we can let the folks in labor and delivery and in the OR test those patients. So they can be more confident that the patients are taken care of or not infected. And then we’ll start moving out into the larger community with essential workers. Because we certainly know that a lot of employers in the area, whether it’s the city who operates the sanitation services, for instance, or the police and fire, or the EMTs, and the first responders are all interested. And while there is some testing through the counties that’s available for those folks, best practice has shown two things in general really have an impact on the shape and duration of the infection in our community. The first is your suppression activities. Basically, how effective you are at getting people to isolate themselves and prevent the infection from spreading. And a big piece of that, aside from stay at home type orders, is the ability to test people. We saw that in a couple of countries do widespread testing, and we do not have widespread testing available to us at this point. So we’re having to rely in North Texas mostly at this point on our ability to prevent the spread of infection by, say at home borders, which has its own challenges.
Gary Bisbee 8:08
Right, what has been the population’s view of staying at home and self-distancing?
Barclay Berdan 8:14
Mixed, as you might imagine. The Dallas Fort Worth area has about seven and a half million people. Most of that population is in the four main counties, but our service area is 16 counties. So all the surrounding counties are a part of that. People will travel across political lines to go to work, to shop to play to go to school. So it’s a very mobile society. And the real challenge for us has been that the political leaders have not acted in unison. So we’ve had a lot of variation. The first act was really the county judge in Dallas County who was followed relatively quickly by the mayor of Dallas. The governor has not done a stay at home order but has obviously declared a disaster as have ultimately all the county judges. And then what’s happened has been this progression really over the last three and a half weeks. Everybody sort of responding and tightening and pushing. Where we were at the beginning of this week was one of the four main counties, Collin County, which is north of Dallas County, a very high growth area. Lots of population had really resisted strong stay at home orders and had businesses pretty much still operating. The governor of texas this week finally defined essential businesses within his order. It left it vague up until that point, and that really forced the county judge in Collin County to rescind his order and direct the businesses to close. But I think in the end, what we have right now is reasonably good. What I’ll call suppression tactics going on. I can look out my window. There are still people driving around, but it’s nowhere near the number of people. We’ve had news reports of people going out to exercise and not necessarily paying much attention to social distancing. And we have different counties that respond differently. When the state home orders were first put in place in Dallas. We actually had employees that were coming to work in our facilities that were stopped by the police. But that hasn’t happened in any other county. And actually, the police have kind of backed off on that at this point. So the challenge is Texas has always seen itself as a very business-friendly state and one that respects people’s independence and that’s the balance that the politicians have tried to achieve. What the healthcare leaders, I myself, and the other health care leaders in North Texas, have really been pushing on is that time is of the essence. And in the absence of our ability to do widespread testing, the biggest tool that we have to limit the shape and scope and duration of the infection in North Texas, is what they like to call stay at home orders. But I think in general, people are adapting to the change trying to comply. I spend every Friday morning on a call with a number of the employers and several other healthcare systems a lot that’s moderated by Mercer and Oliver Wyman. And just listening to the challenges that they’re seeing with their employees. And make sure that we’re paying attention to the anxiety the challenges of such big changes and patterns. People working from home dealing with children and pets being around and we are seeing as I think everybody that gets in this situation starts to see in the community that there is a little bit of an increased level of abusive behavior, unfortunately. We’re really pushing out some of our behavioral health services, in terms of availability to folks and making sure employers know what they can access in that regard.
Gary Bisbee 12:24
What’s been Texas Health Resources policy on your own employees, Barclay in terms of working remotely?
Barclay Berdan 12:32
We have a substantial number of people that are working remotely. I mean, I’m sitting in the corporate office today. I come in two days or so a week. And normally that’s a pretty populated office. There are probably about 20 cars in the parking lot today. So you know, most people that can work remotely, we pushed out and are working at home. Our IT think people just really did a yeoman’s job. We had a certain store of equipment that we could give to people if they didn’t have the equipment. And we’ve made a number of adaptions along the way. And part of the challenge is making sure that we retain a secure environment with our IT infrastructure. And we have seen a bit of an increase in attempts to violate that security from the outside. But I think we got a great group of folks, they’re paying good attention, we’ve got the right rules in place. So a lot of people working from home, it is a bit different to have meetings via Skype or other zoom or, you know, different software that’s out there. Probably spend more time on the telephone than we did before because you’re not having any face to face meetings. There are some positives to it though. If you’re not doing a video meeting, you can get up in the morning and stay in your jammies. You don’t have to shave you know, you know, some things you don’t have to do and you know if you’re not going to be on video, there’s always a bright side.
Gary Bisbee 13:57
Yep, bright side for sure. What about postponing elective or non-emergent surgery. Have you done that yet?
Barclay Berdan 14:04
Oh, yeah, we did that several weeks ago. Some of the orders executive orders that have come from either at the county or the city or the state level, actually, were commanding that hospitals quit doing quote-unquote, elective cases. But, we had actually wound down about a week or so before they mandated it from a regulatory or executive order point of view. And that’s for all the systems in the area. Our wholly-owned hospitals, our joint venture hospitals, our joint venture AOCs…hospitals are still doing emergency surgeries. And we gave them some guidance in terms of, you know, what might be considered elective and not elective, because, you know, there are things that are posted on the schedule that you know, just because it’s posted in advance on the schedule doesn’t mean that it’s truly elective. So we’re still doing cases that, you know, you might expect are appropriate.
Gary Bisbee 15:09
How about redeploying caregivers? Have you needed to do that yet?
Barclay Berdan 15:15
We’ve done that to some degree. Our process here has been to really pivot the entire organization and look at how we’re organized to deal with a completely different flow of patients. We had teams that were working on emergency room access first and how we were going to standardize the process and all of our ERs of receiving patients and sorting patients and treating patients and completed that and ran all those pilots to make sure it was all working everywhere last week, this week, really concentrating on our inpatient surge plans, which has really kind of three parts to it. One is first the beds. And obviously, once we canceled all the schedules for elective care, we freed up quite a bit of capacity. So we have those beds as well as some other beds that we brought into service that was out of service. The second thing you have to do is to look at how you’re going to staff those, and clearly, the staff that was working in surgery and PAC us, and on those elective side and the nursing floors. We are retraining and we’ll deploy them into these redesign care flows and floors. And the third piece is really ventilator counts and anticipated ventilator demand, and how we’re going to manage that. We’ve really got our first round of all that planned and are testing it this weekend. And we’ve designed virtual dashboards for each facility, where they can also use some predictive analytics once were really in the thick of things to anticipate where volumes are going to pick up and where they’re going to need resources, people resources, ventilator resources, supplies, PPE, we’ve been doing quite a bit right now. I think if I looked in all of our facilities on top of the volume that was left after we cut all the elective cases, that’s sort of our baseline emergency volume, we have about another 850 beds that we had available right away. And we’ve figured that we can add about another 1100 beds to that with the staffing that we have. So we can bring a substantial number of beds online and staff it and are pretty comfortable with that.
Gary Bisbee 17:43
Do you anticipate any furloughs anytime in the near future?
Barclay Berdan 17:46
We’re not at this point. We have a reassignment pool and as we go through the process of finishing these designs, we’re offering folks the opportunity to get reassigned. But I think the prudent thing to do at the present time is to basically say we’re going to need all hands on deck. And you may not be working at the same job you were working at. We’ve reassigned some nurses to our call center as a great example. So instead of providing care at the bedside, you might be providing a triage on a phone. And until things settle down, we’re not going to make any change to that.
Gary Bisbee 18:24
So turning to economics, discontinuing elective surgery, so what does it look like for this year for your financials?
Barclay Berdan 18:34
Well, that’s a good question. We’re monitoring that with some regularity. We had a pretty good-sized pool of dollars in our investment pool, and there is we’ve clearly lost some value there. But the market improved from last week we gained back about 193 million from some that we lost the week before. We had a few variable rate bonds that we were concerned about being re-marketed and we’re prepared to repurchase any of those to prevent failed remarketing. Which we don’t think is likely anyway. We have some lines of credit that we’ve drawn down, but we’re very liquid, we’ve probably got close to three-quarters of a billion dollars of liquid assets, same-day availability at this point outside of our investment accounts. And that was one of the first things we did is we started looking at this was saying we got to make sure we got plenty of cash available. At the present time, we’re in reasonably good shape. Our revenues are obviously down 35% or so I would say. Overall, our expenses are up because we’re incurring a lot of expenses and everybody’s still fully employed. So our monthly operations are going to take a dip, but our overall financial position is strong.
Gary Bisbee 19:50
Do you have any indication yet how much might be coming from the federal government with the fund?
Barclay Berdan 19:56
No. The distribution of the supplies never made it to Dallas Fort Worth. We thought whatever there was got directed somewhere else. We’re standing up the ability to apply for some of the funding. One of the things we learned from past challenging periods is that the start keeping the records of what you’re spending money on upfront. So we’re doing all that. But at the present time, we’re not concerned about how quickly that flows. We just want to make sure we get our fair and appropriate share of it as time goes on.
Gary Bisbee 20:34
If we could turn to governance for a second, what have you been communicating to your board and how often are you communicating with them.
Barclay Berdan 20:42
Our board met five times a year and operated in a committee structure. We’ve only kept one committee active. We moved all of our meetings to virtual, we’ve only kept one committee active. That’s our Quality Committee auditing performance committee because they handle credentialing of positions in that group of functions. My board will next meet at the end of April. It’ll be a virtual meeting. What I’ve done in the meantime is send them a weekly midweek, written report that highlights things that have happened during the last week. And then on Friday, we do a call at 11 o’clock for the board members. The written report actually goes to the board and the committee members. The call is it’s not an official board meeting. It’s just a call. We answer questions about the written report, provide some updates, and have some dialogue answer questions. I would say my board at the early outset, we basically talked and they passed a resolution that gave myself and the CFO, pretty substantial powers to act without them because they did not want us to be hindered in any way shape or form in terms expense limits or anything. They’re very supportive board. We’re working to keep them informed provide counsel and guidance. And that’s where we stand right now. Great relationship. Very supportive.
Gary Bisbee 22:13
This is been a terrific interview. Barclay, thanks so much. Appreciate your being with us. Let me if I could ask one final question, which is there’s been discussion among your colleagues, other CEOs about the global supply chain. And the question is, should we begin to manufacturer all these critical life-saving devices and equipment manufacturer it in the US and not count on the global system, which has been challenging during the last couple of months? Do you have any thoughts about that?
Barclay Berdan 22:48
I definitely think that we will move in that direction as a country. If I jumped down to the local marketplace here. We had identified some time ago a relationship with a company that actually produces PPE locally. One of them there isn’t a whole lot of them, but they produced it locally. We supported them, even though maybe their pricing was a little bit higher than we could get from overseas and bought a lot of products from them. And they proved to be a very loyal supporter of our organizations through all this.
Gary Bisbee 23:23
That’s a good example of that point and what we might be turning to. Barclay, thanks so much. This has been terrific. We do appreciate it. And our thoughts and prayers are with all of you at Texas Health Resources in North Texas.
Barclay Berdan 23:36
Well, Gary, we hope that you and everybody at the Academy stay well stay safe and we look forward to a time when we can get together again and all the members of the Academy I send the same wishes. Stay well, stay safe.
Gary Bisbee 23:50
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Transcribed by Otter