Balancing Growth with Stability

A community-focused healthcare provider set out on an ambitious journey—expanding its primary service area by taking on a billion-dollar project. This transformative initiative promised to enhance care access and reach but reshaped the financial profile of the organization considerably. To support its vision, the organization needed a strategic approach to managing resources and mitigating risks effectively, fluidly balancing the changing demands with financial capacities.

Challenge

With COVID effects still echoing, the provider set on a dramatic growth plan:

• The health system is navigating ambitious plans to expand its primary service area, anchored by $1B campus expansion.

• Given heightened growth and operating pressures, the system aims to sharpen its risk management and build a responsive balance sheet.

• A responsive, agile balance sheet was essential to support ambitious plans.

Solution

The chosen approach was a team effort. By bringing together its Enterprise Risk Management (ERM), Financial Planning and Analysis (FP&A), and treasury teams, they ensured every angle was covered. Here’s how they tackled the challenge:

• Risk Conversations
  The team conducted in-depth risk interviews, using insights from their existing ERM work to understand potential impacts and how quickly they could adapt.

• A Capital Strategy with Flexibility
  They developed a capital strategy designed to balance current needs with future adaptability.

• Staying on Track
  They introduced a simple yet effective monitoring program—a quarterly “pulse report” complemented by semi-annual and annual reviews. This kept everyone aligned and focused, serving as an early-warning sign for issue escalation.

Impact

Thanks to these efforts, the provider achieved some great outcomes:

• Managing Investments
  A detailed review showed that their capital risks increased year-over-year, primarily due to operational stressors. The team adjusted $300+ million in investments, phasing in changes to reduce risk while keeping plans on track.

• Staying in Sync
  The new pulse report and review process created a culture of awareness and efficiency, making both intra-year adjustments easier and garnering efficiencies for end-of-year planning.

By staying proactive and working together, the healthcare provider struck the perfect balance between growth and stability. Their thoughtful approach is a fine example of how to handle big plans with care and confidence.