After more than a decade as CFO of hospice and palliative care provider By the Bay Health, Denis Viscek recently announced that he would retire this Fall. Director of Finance Jim Kelly will take the reins this October. Both the retiring and incoming CFO have staff recruitment and retention and the shifting payment landscape at the top of their minds.
By the Bay Health is the oldest nonprofit hospice in the state of California, established 45 years ago. The organization serves eight counties in that state. In 2015, the hospice affiliated with the University of California at San Francisco (UCSF) health system, which spurred their growth.
The California-based provider also offers pediatric care, skilled nursing home health, comfort care and grief counseling. Originally known as Hospice by the Bay, the organization rebranded earlier this year to reflect its broader scope of services.
What were some of the key factors under consideration as By the Bay Health chose a successor as CFO?
Viscek: When the previous director of finance left and we were recruiting someone new, we always kept in mind during the interview process the potential of this person developing and becoming my replacement. It wasn’t the driving factor, but it was always there. It was a major part of the hiring process to look for potential that we can draw. Jim just happened to come along and early on demonstrated great deal potential that we began to develop. He did not come from a hospice background, but he’s learned the industry and has a solid understanding of the metrics that drive this business.
Another key part of the transition was developing the relationship between Jim and our senior leadership and board members. Early on, we started introducing him into board meetings, and the confidence in his abilities from the board was huge. Cultural fit was also huge, to ensure he meshed well with colleagues. Having those both goes well makes this transition a lot easier and sustainable.
Kelly: For the first couple years in particular, I was really just acting as a sponge trying to connect all the dots between the hospice industry in general and how our organization operated. After all that sunk in, I’ve been more able to apply that knowledge and take more of a role in shaping the questions that we ask and put the data in front of the decision makers that would help us run a lean organization providing top-level care.
How has the hospice industry changed in the last 12 years? How do you see these changes impacting times ahead?
Viscek: Regulatory scrutiny on the industry has certainly ramped up over the last dozen or so years. This and other factors have made the competition from for-profit hospices off the charts for nonprofits. This has changed since back when I started, when the preponderance of hospices were nonprofits.
That’s not the case today. We have tighter margins and we’ve gone through a period of relatively flat inflation. Prior to that, costs of providing care were going up, but revenue wasn’t increasing proportionally and for some hospices this year, it’s going to be very flat.
What are the challenges that you’ll be focusing on tackling ahead?
Kelly: Of the two biggest ones that come to mind, obviously one is the Medicare Advantage hospice carve-in. That’s going to be a game changer for the industry rolling out. The changes are going to be more limited in the first few years, and it’ll be interesting to see what the long-term impact of that is.
The second major challenge is staffing. The national nursing shortage combined with workforce shortages in the Bay Area, and it’s been an employee’s market for over the last decade. Staffing is going to continue to be a challenge for our organization. We have a group that is brainstorming and putting together some very specific programs to boost our recruitment and to market ourselves more effectively and more appealingly to the workforce. It is probably one of the most significant initiatives we have going on right now.
How has the pandemic impacted your organization financially and how are you mitigating the potential damage?
Viscek: Staffing and payment models already posed challenges. Throwing a pandemic on top of all that, and it’s been a difficult year for us all. Unfortunately, it’s not going to get a lot easier with these issues and COVID-19 continuing. A huge part of the equation with tighter margins is that you can’t just throw money at problems and hope it works. You have to be able to offer staff and patients things that your competitors can’t.
Kelly: We had a bit of a delayed impact during the first 12 months or so of the pandemic. We were one of the few agencies that accepted COVID-19 positive patients in our area throughout this entire time. Being a well-known brand, we were looked upon and we were supported by our community. Now in the most recent several months, it does feel like there has been a delayed impact. The hospitals are empty except for COVID-19 positive patients in the last surge, and there’s definitely a relationship between the hospital census and our census that’s impacting our referral patterns.
What trends do you see unfolding in hospice? How is By the Bay Health adapting?
Viscek: A shift from hospital-based care to home-based care is very promising, and it is definitely the way the industry is moving. Whenever you’re transitioning, there are pitfalls that you don’t even know about and they’ll have to be navigated on the fly, because this landscape is morphing and you’ve got to be nimble enough to do that.
A lot of industry leaders have pointed out historically that insurance companies undervalue home-based care and hospice and haven’t been willing to reimburse at the level that [traditional Medicare] reimburses. If the industry is going to home-based care and morphing that way, then we need to put value on that care, or else there’s going to be a collision and the economic shifts won’t be there to support it. It’s going to be very interesting to see what happens, and it’s going to make some challenges tough to navigate.
When we’re developing a strategy or a path, we ask ourselves the question, “Is this appealing to the Medicare Advantage programs?” They seem to want a consolidation of systems. They want a large geographic footprint, and they want the one-stop-shop care and service lines. This is also better for the patient, in that they’re not moving from one provider to another during their course of treatment. We are always looking at what is appealing to a Medicare Advantage program.
Kelly: We’re still in the early stages, and we acquired a home health agency about four years ago. We’ve been in the palliative market for over a decade, but it’s really increased in the last several years. We just did an analysis a month or two ago, looking at the movement of patients in our system of care between home health, palliative and hospice. There was significant movement in and through these systems from palliative to hospice, but also from hospice to home health and vice versa.
One of the biggest surprises was how many patients we treated from the home health capacity that later down the road we then provided a palliative or hospice service, or both. We weren’t expecting that movement to be as large as it is.
One of the things that I brought to the table when I came here six years ago was enhancing our data analytic capabilities. Decisions will likely be more data-driven. There is a synergy in these systems of care, and it’s a whole other thing to look at the numbers of what’s been in place to navigate what could be ahead.
One strategy will be to continue to develop home health and palliative care, because it will become its own referrals to the hospice portion of our business, rather than depending upon just the hospitals.
Companies featured in this article:
