RWJBarnabas Health CFO focuses on strategy in industry under 'economic siege'

Robert Wood Johnson Health System and Barnabas Health merged in 2016 to create RWJBarnabas Health, the largest healthcare system in New Jersey. In 2020, Executive Vice President and CFO John Doll will continue to focus on executing a strategy to transform the organization.

Mr. Doll said RWJBarnabas Health has several big projects in the works for next year: kicking off the move to the Epic IT platform, integrating its medical group and building out its population health infrastructure — to name just a few.

In 2020 and beyond, Mr. Doll and his team will also be focused on ways to offset pressures health systems across the nation are facing, including increases in costs from labor shortages and escalating medical supply and pharmaceutical costs.

Here, Mr. Doll shares his top priorities for the year head, discusses industry headwinds and shares his top piece of advice for other health system CFOs.

Editor's note: Responses were lightly edited for length and clarity.

Question: What are a few of your top priorities for the year ahead at RWJBarnabas Health?

John Doll: In 2016, RWJBarnabas Health was formed by the historic merger of Robert Wood Johnson Health System and Barnabas Health. Since then we've focused on capturing the synergies of the merger to fund our overall system strategy, which includes launching a journey towards becoming a high reliability organization, an important foundation to ensuring patient safety, and focusing on quality.

Much of our activity over the few years since the merger has been around our core business: our acute care hospitals, but along the way we have expanded heavily in our medical group infrastructure and other ancillary healthcare businesses.

For 2020 and beyond we'll be laser-focused on our strategy. We update our strategic plan on a three-year cycle, so we'll undertake a refresh of that plan in the first quarter of next year. Completing that plan will help us chart the path for our next three years of growth and investment. Our priority will be in integrating our medical group that's grown largely through partnerships and acquisitions. We will continue to invest in making that a homogenous organization.

We've announced the move to the Epic IT platform, and in 2020 that project will kick off in earnest. We view this move as transformational for our organization; it will allow us to truly connect all of our healthcare assets in a deeper way than they have been connected in the past.

Another key effort for us in 2020 will be continuing to focus on building out our population health infrastructure and leveraging what we've learned from Medicare programs such as Bundled Payments for Care Improvement Advanced and others to develop deeper relationships with commercial insurance plans and the Medicare managed care plans in New Jersey.

Q: What headwinds are you preparing for in 2020?

JD: Our industry is under economic siege. The one thing we're all aligned on is that health care costs are too high.

Hospitals and health systems around the country have tremendous pressures on their operating margins fueled by increases in costs from labor shortages, escalating medical supply and pharmaceutical costs as well as other factors.

At the same time, we're seeing pressures on our revenue. Providers across the country are concerned about the potential impact of federal DSH cuts, health plans are looking to reduce payment rates because people are sensitive to healthcare premiums, and we go through different cycles of funding for uninsured.

As we work to address these margin pressures we are also faced with increasing pressures from new competition, largely being driven by private equity investment in physician and ancillary healthcare businesses. These factors combined with the need to invest in new capabilities to keep our communities healthy create significant headwinds for us.

Q: RWJBarnabas Health and Rutgers University launched New Jersey's largest academic health system in 2018. What is the key to developing a successful partnership with a university? 

JD: The key to developing any successful partnership is a shared commitment to a strategy and cultures that are aligned. As we explored our partnership at Rutgers, one of the things each side agreed on was that we wanted to build a premier academic system for New Jersey. Our state is nestled between academic powerhouses in New York City and Philadelphia. New Jersey has so much talent and potential, and our partnership is focused on realizing that potential for the benefit of the citizens of New Jersey, and for new medical professionals — with the goal of keeping them in our wonderful state to serve our residents. That shared vision and alignment is key.

Another important element can be said of any partnership — it's making sure that you've got the right governing structure to oversee the operational and tactical execution of the new venture. We worked through that issue in advance — beginning before signing our initial letter of intent — but in some ways you must cede control to the partnership, and that feels uncomfortable to both sides until it's fully operational. Here, I pivot back to shared vision and goals. They help you overcome challenges if you know you're working toward the same finish line.

Q: Expensive medical bills, surprise or not, are a growing issue for patients. What steps is RWJBarnabas Health taking to make prices more transparent for patients?

JD: New Jersey has had surprise billing legislation in place for a couple of years. We have been supportive of that legislation because we believe patients should be protected from liabilities associated with out-of-network providers. We are in full compliance with all the federal rules around posting charges on our website.

We have had an in-network strategy for all payers in place since prior to the merger. We've also invested heavily in a financial counseling and patient assistance program for those of our patients who need help easing their financial burden. We utilize the New Jersey charity care program but then go beyond it with our own charity care program where we provide free and subsidized care for those that don't have coverage.

We fully support everything we can do to help people be educated about their choices and cost of care.

Q: If you could share one piece of advice with other health system CFOs, what would it be?

JD: More so than ever, in 2020 and beyond, we have to be nimble. The tools and techniques that have helped make us successful continue to be important. We need to ensure that our organizations have the right level of financial discipline, but we also have to recognize that a lot of the changes that are necessary in our industry are new and different — and are going to require different sets of skills and ways of looking at things. Flexibility will be a crucial skill for CFOs to help everybody in the organization, from the operations leaders to executives, make the right decisions.

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