Speaker 0: The most important health care decisions don't happen in isolation. They happen when leaders come together. Becker's sixteenth annual meeting brings together more than 3,500 hospital and health system executives this April in Chicago. With 800 speakers from Ascension, Cleveland Clinic, CommonSpirit and more, the conversations get real. Leaders will share how their scenario planning for policy shifts, breaking through value based care barriers, and building clinical teams that translate new ideas into real world care.

Join top decision makers in the room April 13 through the sixteenth. For the agenda and event details, visit beckers hospital review dot com and click on the events tab in the upper right.

Speaker 1: This is Madeleine Ashley with the Becker CFO and revenue cycle podcast, and I'm excited to be joined today by Jim Malloy, executive vice president, CFO, and treasurer of Ochsner Health. Jim, thank you for being on with me today.

Speaker 2: Thanks, Madeline. It's a pleasure to be here and looking forward to the conversation.

Speaker 1: Me too. But before we begin, Jim, if you don't mind just sharing a little bit about yourself, your background in health care, and more on Ochsner Health with our listeners, that'd be great.

Speaker 2: Sure. I guess since, the context here is this part of my career, which is only, about three years in in the making, a little bit of background on because I have an unusual way of arriving to my current position is worthwhile. I spent the vast majority of my career has been in health care, but much of it was in consulting and banking. The and the vast majority of that was on the banking side. So a little bit unusual for a CFO, and I will admit that, I've been drinking from the fire hose for three years, but getting pretty pretty comfortable with, the new role here.

And I'd say, from my perspective, it's it's a bit mixed in drinking from the fire hose for three years straight on information is a little bit of a disadvantage, but I think, it's been offset by coming in with a pretty fresh perspective, and not a lot of past really to, burden my thinking. So it's been a great experience for me, and this is always planned to have a meaningful portion of my career, and and it is turning out to be just that.

Speaker 1: Oh, thank you so much for sharing that background. And, you know, to your point, coming from a a a different background than just historically health care CFO, could you maybe share some of the things that you've that have really stuck with you? I mean, the industry is ever changing. We're always seeing something new popping up. So how are you able to quickly get on board with that?

Speaker 2: You know, I think taking a fresh look, as I said, has been pretty helpful. And a couple of the early things, you know, noticing, especially, you know, coming into this year and some of the trends that are here. I've always known that there was a big dependence on governmental programs, but you sort of don't realize how much those shifts are important with the population and everything else. So there's, you know, both a higher percentage of the population with the aging population going into Medicare, and other items that have regulatory risks such as the Medicaid program, three forty b, etcetera, and and different things that are the result of legislation. You realize how important those things are from a different perspective.

And that's probably been the most intriguing of the things to me or the most different from when you're looking at it from this perspective, the importance of it becomes much more elevated.

Speaker 1: Yeah. No. For sure. And so let's let's dive a little into that. Now that we're here in 2026, maybe could you share, the specific financial trends or shifts that you're keeping a a super close eye on right now and why these trends are so important to you?

Speaker 2: Sure. You know? And I think what I talked about with the the realization on this dependence on the governmental programs, it it points to what's become and probably elevated in 2026, sort of a fundamental imbalance in the industry between payment versus expense. And what I mean by that is the governmental payers are not keeping up with inflation, generally in any of the categories. So if you look at because of provider shortages and different things that we are experiencing in the industry, our expenses are going up in in a bunch of areas along with even more so than regular inflation throughout the economy.

So we have to deal with that on that side when the increases that we're seeing on the revenue side aren't there. And, you know, fundamentally, that's okay. It just causes a focus for a need on change. And we need to get more, efficient without any question, and it's really forcing us to do that. The the most recent difference, I think, though, is that the commercial payments haven't been keeping up either with that, expense inflation that we're having.

So that's really causing a new importance on change for us and really make it an an imperative. You know, and the simple things you think about, you hear often all over the place, you know, bringing the right care in the right place, getting people, out of the hospital when they're ready. And as you all know, no one likes to be in a hospital. So a lot of the things that we have to do, fortunately, are good for our patient population as well. But I think the the level of change that's required is definitely accelerating as we head into '26.

Speaker 1: Yeah. And could you maybe share you know, a lot of CFOs that I've talked to lately, have also placed some emphasis on some of the rural health information fund that we're seeing kind of slowly starting to trickle out. Have you kept an eye on that at all? Any any other policies that you're you're watching closely?

Speaker 2: Yeah. We're definitely looking at those things and, you know, hopefully, getting involved in the conversations that that go on and and weighing in like I think a lot of others are. But, there's nothing out there, as you say, that that that can be from the positive perspective. There is nothing out there that's gonna offset a lot of the other trends that have not been that, positive on the legislative side. So, although we're keeping up to date on all those things and looking at them on a a a daily and monthly basis, there's nothing out there that we're really counting on to have an an impact that's gonna offset some of the general trends that we have to deal with.

Speaker 1: Yeah. No. To your point, lots out there going on. And and when you say that, nothing that's going to have that that large impact, does that mean that you have to then turn inward, look at yourself and your team? How can we tackle all of this together?

What's what's your solution?

Speaker 2: Yeah. There's no question about that, and and that's, you know, one of the things from my perspective that's gonna be different about 2026. And I think one of one thing you'll everything goes back to fundamentals, right, at the end of the day. And the big thing for us are patients and people in health care. So the two words we've had in our organization pretty consistently this year are access and experience.

The access side that relates directly to the patients. You know, there's too many people that don't have and can't have timely access to the services they need. One thing we're doing is patient journey mapping. And we're doing that in a couple select areas and really following it from a a patient's perspective, every aspect of when they enter that area to when they get out the end. And although we have a couple select areas picked out, we're eventually gonna go across the entire patient experience from the beginning of when they reach out to the organization in any way, to the end of their experience when they drop the bill, but then, even going beyond that to the ongoing relationship that they have and making sure we see that from that perspective.

And, you know, that ties into the experience. I that really we're talking about our people, and what their experience is coming into work every day and how critical that is because at the end of the day, they are the ones that are delivering the care. Our frontline people are the most important thing we have in the organization. And when you have significant cost pressures, worry about things like AI that the general population has, and these access issues, quite frankly, with the patients being, upset about those. Those are the people that are gonna have to deal with that right up right up front when they come in.

So it puts a lot of pressure on our people, and we're making sure that we are, taking care of our people and, easing that burden as much as we can, especially this year.

Speaker 1: Yeah. No. So important. Now, Jim, I wanna shift gears just a tiny bit and ask you where you're seeing the biggest opportunities for smart growth at Ochsner, you know, in the year ahead. I I know in 2024, you and I actually connected and, you know, we talked about how, the system has placed such a hefty emphasis on acquisitions in the past.

Now it's kind of looking to mold, that creation. So that's still kind of the case. What what does growth look like to you now?

Speaker 2: Yeah. And I'll I guess I'll go off the word used in front of it because there's a lot of different ways you can grow. But when you say smart growth, I think the smartest growth of all is really through increasing your efficiency. And in in health care, the best ways to do that, you know, as a provider are things like length of stay reduction. You know, I mentioned before, no one likes to be in a hospital.

So that's another win win on both sides for that is when people are ready to get out and they've received the appropriate care, getting them through quicker is gonna get someone else in the bed. That helps us on the access side. Right? So we have someone else that's actually getting care when they wouldn't if that bed was filled. And it's better for us from an efficiency perspective because the resources there, you don't wanna have any wasted time.

So it's really about throughput when I think about smart growth. And you have that in the hospital side, and you have that same thing on the clinic side, which is really making sure that, you're getting that old standard again, right care, the right place at the right time. And a lot of that is somewhat a exercise of patient triage, but it's also making sure that you're scheduling properly and making it easy to schedule. And when things go wrong with the schedule, making sure that you're able to fill those things in, when people don't show up, etcetera, and utilize all of our time and the time of our people as effectively as we can, in serving the patients. So that to me is the definition really of of of smart growth, and that that again solves access.

And I I guess the other side, when you look at it, you can actually grow by leveraging scale, and that's standardizing processes, different preference I items and things of that sort. You know, you'll hear that among use probably the most expensive are with joints where there's a lot of different things out there. And the more you can get your people trained on using, you know, one item versus having a choice of five when you find the best one and getting everyone to use it, things of that nature, also allow us to save money and then reinvest those savings in other areas.

Speaker 1: Definitely. So, I mean, gotta ask. For this this year, any anything on the books in in terms of acquisition? Anything you're personally eyeing as the CFO?

Speaker 2: From an acquisition perspective, we really had, and and I wouldn't say it's complete, but we've had somewhat of a a time out on that front going on because we went through period of extreme growth, where we'd, increased our size, you know, doubled in a relatively short period of time. And what we needed to do was integrate a lot of the things and the parts of the organization that we'd acquired. And we've been spending a ton of time doing that, getting our efficiency up, and, getting a lot of the processes that we'll need when we turn back to that more external growth. So most of the growth we've had in this interim period has been organic. I think I'd expect unless something, unusual or phenomenal opportunity comes up, we'll probably be in that mode the rest of 2026.

But after that, I think we'll probably return to a normal mode of just looking, for whatever great opportunities there may be out there.

Speaker 1: Yeah. And you can always find great opportunities. So, yeah, definitely worth keeping your eyes peeled, I'm sure. So, Jim, with everything we've discussed today, you know, just in terms of growth, policy shifts, everything happening in health care, what do you think is the most important mindset that CFOs need to keep right now just to navigate everything?

Speaker 2: You know, two words, and and our our CEO has used this a lot, Pete Pete November, that I really think are important from a CFO perspective, especially, is optimism is number one. You know, entering this year, I think, with all the legislation and everything else that's been going on in the world, it's easy to be negative. But I think when we sit there and look at it from our perspective, there is so much opportunity out there, almost unlimited. There are tremendous and not necessarily the it's more a nature of how things have evolved versus, the people that are involved in things. But there are tremendous inefficiencies in the industry.

We have a lot of opportunity to get after those, you know, both from our own internal perspective and from an advocacy perspective when looking external with our government relations people and and and everyone else to point out, some of these issues. But, optimism and the only other word I'd say, that's critical, I think, is urgency. We do have to have a sense of urgency. You know, making changing things takes time. So you have to start well in advance of new things, and there's been a lot of, things that we have to deal with already on the plate and more coming.

You know, even even AI, despite the fact that, if you read, it's gonna solve all the world's problems in six months. You know, a lot of things that you take advantage of there require process change. They're gonna take time, so you can't wait. You have to have a sense of urgency, right now in order to get to where we need to go.

Speaker 1: Yeah. Yeah. AI, nice to have, but not always a quick fix. You know?

Speaker 2: That's for sure.

Speaker 1: Wonderful. Well, Jim, thank you so much for hopping on this podcast with me. It's truly been so fun getting to chat with you, and, I'm excited to to chat again down the line. So appreciate it.

Speaker 2: Thank you so much. It's been a pleasure.