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5 Questions with ... Joann Anderson

Joann Anderson, the longtime CEO at Southeastern Regional Medical Center in Lumberton, NC, is one of the country's most outspoken advocates for rural healthcare. Joann recently announced her retirement after leading SRMC through an affiliation process with the statewide UNC Health system, and she took the time to talk with RHI about that process ... plus community leadership, rural healthcare trends, and more.

Recently you’ve been getting a lot of national attention for your vocal support of Covid vaccines in a region with high levels of skepticism. Do you think rural healthcare leaders ought to have more of a voice in important community issues – whether related to Covid or otherwise?

I think it is important for healthcare leaders to understand the issues within their respective communities and to be actively engaged in addressing those issues. Quite honestly, I have not always taken advantage of opportunities to be that voice. COVID has given me an opportunity and a platform that practically demanded I speak and speak loudly. I must ask, why did it take a pandemic to get me to take such a public stand when there are issues facing our community that are just as urgent…obesity, heart disease, health literacy, poverty, substance abuse and misuse? Significant issues are present in every community. Yet, we as leaders, often leave it to others to get the message out to the community,

One issue that is often overlooked by healthcare leaders is the economic issues in the community. In rural communities, the hospital and healthcare overall are often the leading industries. For a hospital, physician practice, home health agency, pharmacy or dentist to survive, the community must have a population base that can afford those services. The economy determines the vulnerability of those services. As rural healthcare leaders, we must be engaged in the economic development efforts in our areas.

You led Southeastern Regional Medical Center through the process of affiliation with UNC Health. Talk to me about that choice – why did you decide it was necessary, what kind of outcomes were you hoping to see, and how has reality matched up to your expectation?

The journey began almost 10 years ago with a Board of Trustees retreat where education was provided about trends across the nation and the state. One trend gaining momentum was M&A activities, particularly with rural facilities. That educational process continued over the course of 6 years. Annually, the board addressed the following questions:

  • Are we doing enough, fast enough to meet the needs of our community?

  • Do we have the resources available to meet the needs of our community? Those resources included capital (financial and intellectual), workforce, technology, and time.

  • Do we have the ability to recruit and retain personnel needed to address community needs?

  • Can we negotiate contracts that are competitively advantageous to our organization?

  • Are we vulnerable financially? What is the financial outlook? Are our bond ratings dropping?

These questions were eventually put into a matrix for ongoing analysis. The decision to begin a formal exploration process for a potential partner began when the answers to the above questions began to show weakness in several areas. Two major hurricanes had dramatically impacted the financial performance of the organization and had resulted in a decline in the population. The community became more vulnerable, which made SRMC vulnerable. Competition was becoming more aggressive and eroding our market share.

As an independent organization, the executive management team found itself competing with massive organizations with many more resources than we could afford. The pace of change in the market was becoming more and more difficult to address, yet we were continuing to manage the organization well, grow our services, and address community needs. We were not in a crisis situation. There was not a burning platform requiring affiliation but an indication that we might be a stronger organization if an affiliation could occur with the right organization.

The right organization for affiliation would be one that:

  • Shared a common mission, vision, and value position.

  • Had experience in and interest in addressing population health.

  • Had experience in complex rural health organizations.

  • Had a plan to assist in capital needs, both financial and intellectual.

An interesting side note: the Board of Trustees embarked on an exploration to determine if affiliation would make us a better organization. They did not go into the process convinced affiliation was the answer and they were willing to stay the course as an independent organization if affiliation did not meet the above criteria. It took over two years to determine an affiliation with UNC was going to be beneficial to both entities.

One major issue was for the executive team to accept that an affiliation was a positive change. We all liked to think we have the answers and viewed affiliation as a failure on our part. Leading the BOT and the executive team through the exploration process required skills in change management, clear communication and a clear vision. I was fortunate to have a strong board chairman to partner with during this time. His support and focus were invaluable to the success of the process. One thing we kept in focus was that the decision to affiliate was, in the end, a BOT decision not a management decision.

The affiliation with UNC Health has been a positive change for SRMC. While we are early in our relationship, we have seen the value in affiliation. Examples of positive change include: access to intellectual capital in clinical situations, payer contracting, analytic capabilities, recruitment of providers and key personnel, legal and risk expertise, etc. We hope to see improvements in population health. Early discussions have begun with this in mind as strategies and initiatives are developed to address health issues.

Lots of other rural hospital leaders are facing the same kinds of financial pressure that you faced at Southeastern. What’s your advice to them in thinking through the affiliation process?

My advice to any rural hospital leader beginning affiliation process discussions is, first, be realistic in your expectations. The affiliation process is not for the faint of heart. You must know what you want/need from a partner and realize that the potential partner also has wants/needs in the potential affiliation. Those wants/needs should be shared interests. Second, do not go into an affiliation process thinking all you have to do is to let potential partners know you are looking for affiliation. Third, set aside your ego. The decision is about the organization, not you.

Fourth, secure unbiased advisors to lead you through the process. We used Ascendient for board education related to the process, strategy, and logistics. The Nelson Mullins law firm was used to address all legal issues around the process and eventual agreement. Jarrard was our communications leader. Some may think it is unnecessary to have a communication team, but we found them invaluable to our process. We decided to make the process public from very early in the process. The communication over a two-year timeframe was important internally and externally.

Finally, a couple of high-level questions. First, what’s the biggest overall trend that you’ve seen in rural healthcare – positive or negative?

Affiliation is definitely the biggest trend in rural healthcare. That includes providers affiliating with hospitals or larger groups and hospital affiliating with larger organizations. I think only time will tell if this is positive or negative. With any affiliation, there are losses and gains. I hope the gains far outweigh the losses.

My hesitation is that I fear the rural focus will be lost in the larger organization. Most often, rural hospitals affiliate with large metropolitan organizations. I believe those organizations need to have a clear rural strategy embedded in the organizational framework. Metropolitan, urban, suburban, or academic approaches do not translate well in rural communities. For the rural facilities to thrive and community needs to be met, the rural approach must be understood, appreciated, and supported.

And secondly, if you could change one law or policy that would make rural healthcare stronger and more effective, what would it be?

This is a difficult question because there are so many that have the potential to make rural healthcare stronger and effective. Some examples:

  • For those states that did not expand Medicaid…just do it!

  • Wage index calculations – rural facilities are at a disadvantage. We often must pay more to recruit to our communities, but the wage index is lower than our urban counterparts.

  • Coverage for telehealth services to include payment for all services safe to provide; eliminate geographic and setting requirements; facilitate virtual care across state lines; and federal investment in broadband.

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