How 'financial rigor' prepared BayCare Health for robust performance: Q&A with CFO Janice Polo

Clearwater, Fla.-based BayCare Health System reported operating income of $338 million in 2022 on revenues of $5.1 billion.

The system also has an "AA" rating and stable outlook with Fitch, reflecting an excellent financial profile supported by its leading market position in a four-county area and the ability to sustain a solid operating outlook in the face of inflationary sector headwinds, Fitch has said.

Becker's took the opportunity to talk with BayCare's CFO, Janice Polo, as to clues why the 16-hospital system reported such relatively strong operating income. Its overall 2022 income totaled a net loss of $535 million compared with net income of $1.1 billion in 2021.

Question: What can you point to as to why BayCare apparently performed so well on the operating front in 2022?

Janice Polo: While there was a direct $52 million from the state regarding Medicaid included as well as $65 million in pandemic funds, it was a really good performance compared with peers. I would also say our prudent financial rigor meant that we went into the pandemic with a very strong balance sheet. 

Q: Can you speak more about such financial rigor and how it stood you in good stead through the pandemic?

JP: We didn't wait to see what might happen — we temporarily started saving money, but we had no layoffs in 2020. We didn't delay capital projects even though it was uncharted territory. We did have an impact from labor costs and tried to get a hold on those. They are still significant, but the rates are lower and we now have an internal mobile pool of workers. Editor's note: BayCare's overall expenses were up 5.7 percent in 2022.

Q: What is your main focus as CFO, operating income or non-operating?

JP: Operating. We have really built on a strong balance sheet. The investment returns are really more a three- to five-year span.

Q: What is BayCare's strategy for future growth?

JP: While our hospitals will take care of more acute patients, ASC (ambulatory surgery center) facilities are increasing access and lowering costs, so that will be a focus, as will healthcare in the home and other innovations such as technology that we will tap into.

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