In 2024, Clearwater, Fla.-based BayCare Health System boosted its operating margin to 9.6%, up from 6% in 2023. BayCare’s Executive Vice President and CFO Janice Polo attributed the strong financial performance to a blend of strategic cost management and collaborative leadership.
Ms. Polo also credited the margin boost to an increase in “regulatory funds” from the state, which helped cover Medicaid losses. Moreover, she told Becker’s, the system was able to “get a higher percentage” of charity costs covered, and the system saw an increase in its Medicare wage index.
Ms. Polo, a 37-year veteran with the system, also pointed to BayCare’s “operating margin initiatives,” which started in 2023. The initiatives bring leadership together at the health system to develop ideas on ways to look for areas of opportunity like revenue and cost management.
In 2024, the system zeroed in on premium labor reduction, which yielded significant savings. In 2022, BayCare’s premium labor was 16% of the system’s total salaries, wages and benefits, around $274 million. BayCare was then able to reduce that by $190 million from 2022 to 2024 and has since reinvested $100 million back into the team through market adjustments.
“We’ve started monthly [full-time equivalent] management meetings with the hospital presidents to come and present their productivity,” she said. “We [also] put more structure around our fixed-FTE management.”
Looking to the future, Ms. Polo said the system is focused on growth. Under BayCare’s operating margin initiative, the system has a goal of $80 million in 2025.
“You can’t rely on growth for all success, but if you don’t have growth, you’re not going to be successful,” she said.
Mr. Polo also touched on her strong relationship with BayCare’s president and CEO Stephanie Conners, BSN, a crucial element when ensuring health system success.
“Given that she’s been a nurse, she understands the clinical side. It’s something as the CFO that I rely on,” she said. “I really appreciate how we are able to gel the two together.”
