Brett McClung 0:03
Week one of the reopen was probably 25% of budget. Week two was approaching budget and by budget, I mean original budget so budget that we put together at the beginning of the fiscal year. And then week three, which was last week for us, we were on budgeted volumes for four out of five days in surgery.
Gary Bisbee 0:28
That was Brett McClung, President and CEO Baptist Health reviewing the percentage of patients returning for elective surgery in each of the first three weeks of reopening. I’m Gary Bisbee, and this is Fireside Chat. Bret is wrapping up his first year as the CEO at Baptist Health. He reiterated the observation of all first time CEOs that they have no peer in the organization with whom they can compare notes, emphasizing the importance of peer CEO groups. Our conversation includes Brett reviewing the use of predictive analytics to estimate the duration of the first COVID wave and the timing of the possible second wave, the use of AI to test the effectiveness of telehealth visits. And what percentage of primary care visits were conducted via telehealth, Brett spoke about the new normal in terms of greater physician alignment, and much deeper consumer analytics. I’m delighted to welcome Brett McClung to the microphone.
Good morning, Brett. And welcome to the interview.
Brett McClung 1:31
Thank you, Gary. Thanks for having me.
Gary Bisbee 1:32
We’re pleased to have you at this microphone. Many of us are generally familiar with Baptist Health, but maybe not in current specifics. So will you please describe Baptist health for us, Brett?
Brett McClung 1:43
I’d be happy to do it. Baptist Health is a faith-based, mission-driven, locally owned, and governed health system in Northeast Florida. We have over 200 different sites. including five acute hospitals and a children’s hospital and pre acute fitness, rehab post-acute home health, as well as many physician offices that are affiliated with Baptist. Primary care Baptist physician enterprises, about 750 employed providers, and another 750 that are affiliated. Our team is over 12,000 employees and we’ve been in this market for over 65 years. Currently, we have about a 32% share of our six-county area. We do everything from cardiovascular, obviously work in orthopedics to very subspecialty work with an affiliated group of pediatric physicians that are on our campus. For the tiniest Floridians. We enjoy what we do the team is engaged and really happy to have made it this far through COVID and being able to see what life looks like after.
Gary Bisbee 3:13
Can you describe your market as primarily North Florida? Is that the way to describe it, Brett?
Brett McClung 3:18
Our market is primarily Northeast Florida with a few exceptions. We also have an organization called coastal community health and coastal incorporates the Southeast Georgia health system into the work that we do around group purchasing around quality initiatives and also around market growth and referrals. So that expands our market north. And then we have an affiliation with MD Anderson for oncology. So Baptist, MD Anderson, has a market far outside of Northeast Florida, as does our Wilson’s Children’s Hospital. Both of those venues attract patients and customers from all over the United States.
Gary Bisbee 4:05
So I imagine that it’s a pretty fast growth market for the last 10-15 years.
Brett McClung 4:09
It really has been. I spent a good part of my career in North Texas. And so the Northeast Florida market is the actual strangely similar to North Texas and so much as it is a rapidly growing community. And the demographics in Northeast Florida are really not maybe what people would think of stereotypically of Florida. It’s a top 15 place to start a company that’s a younger demographic that is being brought to town by I think we have three or four fortune 500 companies that are based in Jacksonville. So there’s still a lot of work to do. It’s still in a traditional healthcare sense. Volumes are continuing to grow. It’s a vibrant community.
Gary Bisbee 4:53
How would you describe the Baptist Health culture?
Brett McClung 4:56
Baptist Health culture is team-based. It is compassionate. And it has focused on the relationship that we have with the people that we’re so honored to serve. Our physicians are engaged around Baptist and are proud of the level of service and quality that we provide. And we have been the source of truth for this community for over 60 years. And I think that gives our employees a sense of pride as well in the work that they do and fulfillment that they know that we are making a difference in a lifetime of health together and which is our vision and making that real for our community.
Gary Bisbee 5:36
So you’re a relatively new CEO, what were the main priorities that you were developing at the point that COVID outbreak hit?
Brett McClung 5:46
Well, I obviously I’ve been CEO since July 1, more or less. And so I’m still learning new roads and new names, but I can move past those priorities, I guess. But one of the priorities that we established In about the first 120 days was we reframed the strategic plan, and set those priorities out collaboratively with the board and our medical staff and established how we would five things: one growth for the future. And that growth in the future was different than growth in the past, that we would integrate the health system so that we were moving forward on an interoperable electronic record, that we would care for the consumer, which can be a total mental model shift, that we would elevate clinical quality and move it from where it is, which is very good to great in that we would advance the good things about the cell culture, the compassionate approach to work. So those were our five priorities and had become real and we had built a management system and attached key performance indicator metric dashboard that hinged on those five points. And that all was very real and We are moving that forward through the winter and into the spring when covered presented.
Gary Bisbee 7:06
Sounds like you’re very active in a short period of time. So good work there. Let’s talk about your background, Brad. How are you and Nancy getting along in North Florida coming from yours in Texas? I think you grew up in Texas, right?
Brett McClung 7:19
I did, Gary. I born and raised in Texas. And Nan and I had lived in Fort Worth for about 30 years. We raised both children in North Texas and that we were talking about it last weekend there for sure things that we miss about Fort Worth, in Texas and I think towards the top of that list is food. The Tex Mex combination is really hard to get anywhere but Texas and so we for sure miss that and there are some local favorites that we miss and obviously friends and family that we love.
Gary Bisbee 7:55
What have you enjoyed the most about the short time you’ve been in Northeast Florida?
Brett McClung 8:00
We love being close to the water. We bought a house on the St. Johns River. And we’re about 15 miles from the Atlantic Ocean. My wife who grew up in upstate New York before she came to Texas for college is fond of the eastern seaboard. And so it’s good to be as close to the water even though that comes with the price of hurricanes. And I was welcomed in September by my first hurricane, at least as a CEO. I grew up in the Texas coast. So I’m familiar with hurricanes, but that was different.
Gary Bisbee 8:30
Yeah, like welcome to town, Brett. In terms of healthcare, when did you become interested in healthcare?
Brett McClung 8:37
That’s an interesting question, Gary. My dad was a minister. So I grew up visiting the hospitals with him to the extent that I could go in and I could almost always go in the hospital every once in a while go in the room with him as a youngster. Before 10 or 11, I was visiting hospitals with him. So I guess I became aware of that at a very early age. And then became interested in making that part of my professional approach to life, probably when I was a senior in college and had an opportunity to get a marketing internship with an employee-owned company epic in Central Texas. And that kind of started me down the road because that led to another job which led to a Master’s of Science in healthcare at Trinity University, which led me to where I am today. Ultimately,
Gary Bisbee 9:28
We haven’t discussed this before, but it’s eerily similar. My father was a minister and I became interested in healthcare, and almost exactly the same process that you did visiting hospital and people that were ill. Pretty interesting.
Brett McClung 9:43
I didn’t know that, Gary. I’ve told that story a lot recently because it’s part of when the media wants to meet the new CEO. It’s something that kind of comes naturally with my story, and I’ve never talked to anybody else that had that similarity and 30 years ago. So that’s really cool.
Gary Bisbee 10:01
Well, when we can get together again, we’ll have to share war stories about that.
Brett McClung 10:05
We both survived.
Gary Bisbee 10:07
Exactly. So at what point did you actually join the hospital? Probably to become a hospital administrator?
Brett McClung 10:16
Yes. So I had a serendipitous sequence of opportunities. I was doing marketing for a CEO as a senior in college ever successfully recruited a couple of general surgeons over that summer and a different affiliated role. Got a Master’s once at Arthur Andersen as a consultant and consulted several large health systems across the country and probably my very first paying job in a hospital or in a healthcare system was in 1993, I guess, and that’s when I joined Harris Methodist health system at the time.
Gary Bisbee 10:51
Were you interested initially in leadership, I mean, did you see that as a career that you wanted to pursue?
Brett McClung 10:58
Initially, Gary, I was interested in the job that had free coffee. That evolved a little bit I got more refined and what I was searching for. But sure, I think I wanted to have an influence on people’s health. I wanted to have a positive influence on people’s lives and that started as an analyst in 1993, in Harris Methodist health system.
Gary Bisbee 11:20
So as you moved along the path, at what point did you begin to think about becoming a CEO?
Brett McClung 11:27
in 2005, I think is when I became president of my first hospital. And I had an opportunity to both Build Team and work with the team that was there. And we had some incredible successes. And I was probably then that I realized that this was something that was compelling for me and was an opportunity for me to be a positive influence on again, people’s lives and their health. And to do so through building effective teams. And that was in 2005. Not that I hadn’t wanted to be a CEO before I had an incredible mentor and Doug Hawthorne. And so I knew what that kind of CEO looked like and thought that was amazing. And I’m not sure that I ever envisioned that I could be in that spot, because it was such an incredibly high bar to attain. But I had a great mentor many great mentors, and Doug was a great mentor for showing what a CEO did and looked like and how they behaved and what their values were and what their level of integrity was and how they motivated and inspired. So I think 2005 was that epiphany for me that that was out there. But I don’t know, Gary, to be honest, that I ever thought that I’d ever be one. I just thought that maybe I’d like to do that.
Gary Bisbee 12:52
Well as a relatively new CEO almost a year at Baptist Health. What have you encountered that you did not expect?
Brett McClung 12:59
One of the things that you can’t prepare for when you’re a CEO is the lack of peers. And I don’t mean that in any way, boastfully but it is humbling that, that you have an organization that you are their boss, and then you report to the board of directors and you really don’t have anybody in that space. And it’s really the first time in anyone’s career where you can’t look left or right and somebody has stupid questions. You can still ask stupid questions, I guess. But you really end up reaching outside of the immediate petri dish into, again, mentors and advisors that are tracking along with you. So that’s perhaps more theoretical than the answer that you were looking for. But that’s something that I encountered that I hadn’t I had not encountered before.
Gary Bisbee 13:48
I think all CEOs go through that realization. And it’s interesting, as they say, being a CEO is a good job, but it’s a lonely job in some ways.
Brett McClung 13:58
And I just think that’s hard to prepare. For the other things, the governance work, and the leadership work and the strategy work and the team-building work are things that I’d spent time in different levels in different parts of different organizations. But the nest is definitely something that’s you can’t prepare for until you’re there.
Gary Bisbee 14:18
Let’s turn if we could to the COVID outbreak certainly has been highly variable by region. What’s been the profile of the COVID outbreak in Northeast Florida?
Brett McClung 14:29
Compared to the hotspots of Chicago and Detroit, and New York, and maybe to a lesser extent, Los Angeles, it’s been mild. I’m gonna use that word knocking on wood as I say it, and that doesn’t mean that it’s changed the lives of everybody in our community and everybody in the world frankly. First off, Jacksonville proper is the largest city in the United States by landmass. And so when you do the math the population density in Jax is about 1000 people per square mile. And I’ll contrast that with Manhattan where the population density is about 70,000 people per square mile. And so even though Jacksonville is probably 12th, on the list of metropolitan statistical areas, population-wise, we spread out around the St. Johns River and all the way to the beach, it really gets pretty sparsely populated. I can say that. And so our experience was very different than many communities. I do think that part of that is because the density of the population and part of that is because there were, relatively early on, the mayor encouraged social distancing and closed down most of the elective enterprises that are here. And I think the combination of those things made a difference. I really can’t. I mean, this is an epidemiological occurrence. It’s not a chamber of commerce moment. So there was some respect of the disease. I think there was some good fortune, some good luck around that, to be totally honest. We had prepared for the exponential growth that we saw in the hotspots that I listed before. And the exponential growth looked like it was happening very early on where we were going from two patients to four patients to eight patients to 16 patients, and then it plateaued. And for Baptist Health, which has about 1200 beds, our system has about 1200 beds, adult and pediatric beds. Our maximum census for COVID posit patience never got above 40.
Gary Bisbee 16:39
I think we all agree that a crisis accelerates trends already underway. Let’s take telemedicine as an example of how did tele-visits grow during this time for Baptist Health?
Brett McClung 16:51
So as I mentioned, we have Baptist primary care which is a collection. We have probably the largest employed and affiliated primary care network. Well, definitely the largest in central in North Florida. And really those physicians had been experimenting with telemedicine and using it at a very low level, largely because of the consumer and in oscillate partially because of the technology. And we went from very low numbers to, I believe at our peak, we had almost 80% of our visits, our primary care visits that happened virtually over HIPAA compliant zoom. And so we had pretty remarkable those numbers have fallen off a little bit now that we’ve quote-unquote, reopened procedures and other outpatient work, but they’re down set, probably 50% of our primary care visits are happening virtually. And Gary, I think that’s a trend that our consumers will want to remain. It does mean leaning into virtual and virtual care in strengthening our platform. The interesting thing about COVID is that we were preparing our strategic plan that we authored inside the first time 100 and 120 days at Baptist Health and Jax, that plan was designed to pull us into tomorrow. And we were preparing for pressure from large employers on payers to deliver more value and lower prices. And while that the emphasis was different, ie the emphasis was a global pandemic, I do think that many of the results will be the same that we were preparing for. So our plan called for expanding the platform in telehealth and remote patient monitoring, and senior care and population handle, and even virtual healthcare virtual hospital type technology. And so it’s accelerated that, and I think much of that will stick. We do have a challenge with both legislators and payers right now, and that is pay parity for virtual visits versus in-office visits. And we’re working through that right now. But I think it’s a good trend and I think much of that way. remained because the consumer prefers it. It’s just easier.
Gary Bisbee 19:03
Yeah, for sure. How about the caregivers, will they accommodate this interest on the part of consumers and build that into the way they structure their hair design,
Brett McClung 19:13
We have some early adopters in that space. We have an affiliation with our emergency room group, ERG. And we had collaborated on a basically a virtual care app before this all happened called telescope. And so I think that group was already in this space. They were already basically for $49, you can have a conversation with a double-boarded position, emergency medicine and something else, and they were already into that space. So they’ve been hugely successful. Now, there are others that other positions that just lend themselves to early adopter mentality and they also are successful are strategies that everybody doesn’t have this point. All of our primary care physicians are not going to be virtual doctors, but that we will stock up those that are good at it and want to do it and move them into a different space. Figuratively, of course, because it’s virtual, and those that are not interested in it not necessarily need to make that their whole practice.
Gary Bisbee 20:12
There is a quality process that has to do with these virtual visits. How are you thinking about that?
Brett McClung 20:20
One of the good takeaways from COVID is the momentum that it gave us to move into directions that we were already heading. Another is the use of analytics and predictive analytics that we got really deep into trying to predict how long the first wave lasts and when the next wave occurs. We’ve also used analytics more and more to test the effectiveness of these visits. And, frankly, I mean, we’re so new in that space that we don’t have all that data yet, Gary, but we are looking at the efficacy of those visits, the accuracy, the treatment regimen, the outcomes to the extent we can track those things that become infinitely easier. Easier to discuss once we’re on an interoperable record. So before COVID, we had made the decision to move to epic as our electronic health record. So we still have that in front of us to transact.
Gary Bisbee 21:12
Let’s think about elective surgeries for a moment. Baptist Health probably discontinued surgeries at the mandate of the governor in mid-March, when did you pick the elective surgeries back up?
Brett McClung 21:25
The executive order lifted on May four. Which may be a little earlier than other parts of the country. So for those health systems that are just ramping up or preparing to ramp up, what we saw was in I’m gonna just use surgical procedures as a barometer because I think that’s what everybody thinks about. Although, we have a dashboard that literally tracks everything at every location surgery, endoscopy, imaging, cardio procedure, by service line, radiology, by modality, everything. Week one, the reopen was probably 25% of budget. Week two was approaching budget in my budget I mean original budget. So the budget that we put together at the beginning of the fiscal year. And then week three, which was last week for us. We were on budgeted volumes for four out of five days in surgery, similar metrics, and imaging endoscopy, though not quite as robust. One of the pieces of information that we’re sweeping right now and that I would encourage others to prepare to track is the contrast of how are we doing adjudicating the backlog of customers that deferred their procedures or their test because we were closed versus just routine? Run? Right. And right now, that’s a little difficult to separate. But we’re refining our analytics. So we want to be able to know what that looks like in probably a week or so.
Gary Bisbee 22:55
Yeah, that’ll definitely be good to know. Looking at economics, which costs are directly related to elective surgery. How do the financials for Baptist Health look for 2020, Brett?
Brett McClung 23:08
Through February, we were performing. Again, we articulated new key performance indicators that matched right up to our strategic themes. And we’re adjudicating those indicators. at or above plan, I think in every case, but one, including financial performance in our COVID. We’ve been tracking and forecasting and re-forecasting and using hurricane equivalence, if you will, because it’s something that this culture understands and is accustomed to. And what we saw in the forecast was at least initially was the equivalency of double-digit hurricanes for the balance of the year, the financial impact caused by a hurricane times 10 from what would call march through the end of the year, we originally forecasted that we would be closed to outpatient procedures for the entire third quarter or fiscal year-end, September 30. So, really thought that April, May, June, May, June, July, would be closed for cases, we didn’t experience that. And as a result, our forecasts are overly negative, fortunately, and the ramp-up is going well. So we haven’t closed May. So we don’t really know what that will materially how that will impact the financial performance. We did get Kerry’s act support, as I think all health systems did. And what we saw with the monies that we got with the Cures Act is that it went a long way to addressing the spin the specific spin for COVID. So what I mean by that is we built wards 360 beds during about a 30 day period to accommodate an unserved search and we bought more than one cleaner so that we could disinfect masks, and we bought PPE as quickly as we possibly could at, frankly, at exorbitant prices, because the breakdown of the ability for our personal protective equipment to be redirected, became very real for us. And so as we prepared, we had some expenses for COVID that were not for COVID. We wouldn’t have things we would not have done. And so the CARES act money is helpful in deferring some of those expenses. But it doesn’t come close to deferring the loss of about 39% to 41% of your revenue for a six week period of time. So we’re still working through that. Fortunately, we have a very strong balance sheet. We took this opportunity when there was a lot of uncertainty in the market to go to the market and we’ve got over 400 days cash on hand, and we’re preparing for a bright future. We’re still working plan and making adjustments as necessary.
Gary Bisbee 26:03
Well, let’s hope we don’t have another significant wave next year so that our health systems have a chance to get back on track. In any event, this has been a very engaging interview. Thank you, Brett, for that. One final question if I could, we’re all talking about new normal. What does that mean to you and particularly what would you like to see change going forward coming out of the COVID outbreak?
Brett McClung 26:29
Well, I’d like to say that a new normal is that Nancy and I have our two adult daughters at home with us forever. I’m pretty sure that’s not part of the new normal but it is truly been a special part of our life to have Madison and McKenzie with us during the pandemic. But I think part of the new normal in our work is the world has recognized the importance of caregivers. The world understands that now, the world understands that these clinicians, nurses, and physicians and techs are the ones running into the burning building every day. So part of that new normal is respect that shares worldwide in the industry with the work that our teams do. And I’d like to use that new normal to really capitalize on physician alignment. Because there have been many physicians that have never felt more aligned with the work that bap itself does, and they have over the course of the last few weeks, physician alignment, I think change readiness. And our ability as leaders and as teams to prepare dynamically and nimbly for uncertain future is critical. And finally, part of the new normal is consumer analytics, and how do we understand and prioritize the way the consumer wants to access the goods and services that we have that we want them to use to build a lifetime of health together.
Gary Bisbee 28:03
Brett this has been a terrific interview. Thanks so much for your time. You’re off to a great start at Baptist Health and good luck to you and all the Baptist folks.
Brett McClung 28:12
Gary, thanks for the opportunity, and thanks to help the Management Academy for the opportunity you give us to have a venue to learn and grow together.
Gary Bisbee 28:21
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