E73: Achieving Systemness: Competitive Challenges With Scott Nygaard MD, MBA
Every health system leader has unprecedented executive management challenges facing their organization in the wake of the pandemic. The Baldrige Foundation and ABOUT Healthcare welcome you to LeaderDialogue Radio, where leaders glean valuable insights and practical takeaways to help navigate effectively through these challenging times. The show airs on the 1st and 3rd Tuesdays of every month at 1:00 pm (ET) on Business RadioX.
Scott Nygaard MD, MBA, the COO of Lee Health System in SW Florida, is joining Leader Dialogue co-hosts Dr. Roger Spoelman, Dr. Charles (Chuck) Peck, and Ben Sawyer on April 18th, 2022, podcast. The podcast topic is Achieving Systemness: Competitive Challenges and will be exploring how Lee Health has navigated through the pandemic and some of the key learnings as they emerge into the post-pandemic healthcare environment. Dr. Nygaard shares his perspective and insights on this important topic, providing practical suggestions from which all healthcare leaders could benefit.
Lee Health is one of the largest public health systems in the U.S. and one of the largest not-for-profit public health systems and safety-net health systems in Florida that receives no direct tax support. They have four acute care hospitals, two specialty hospitals, and many clinics and outpatient service centers. Lee Health System has more than 1.5 million patient contacts each year with a staff of 14,000 employees, more than 4,500 volunteers and auxilians, a medical staff of more than 2,200, including the Lee Physician Group made up of 750+ primary and specialty care physicians and advanced practitioners in 80+ practice locations throughout Southwest Florida.
Listen to the podcast here
Achieving Systemness: Competitive Challenges With Scott Nygaard MD, MBA
I’m glad that you’re here for another fascinating conversation with another senior experienced leader in healthcare. It’s going to be a little bit different because we’re going to have a roundtable discussion that’s a follow-up to a roundtable discussion that Ben Sawyer, Dr. Chuck Peck and I had with a group of leaders. It was a great time. It was a very intimate gathering and a time for us behind closed doors. We agreed that we weren’t going to share a lot of this so people could say whatever they want and share their feelings. It was a great time, and we got to talk with some incredible leaders. We have one of those leaders with us, Dr. Scott Nygaard. Scott is a good friend to all of us on the call. We have been able to work together in the past. We’re delighted that could join us, Scott. Thank you very much.
Roger, Ben, and Chuck, thanks for having me.
I’ll give a little bit more detailed background, which is quite a remarkable and very accomplished physician and physician leader. About Healthcare is our sponsor, that’s your employer. We are brought to this audience by the Baldrige Foundation. They allowed us to do Leader Dialogue. We wanted to stop and take a couple of minutes to talk about the Baldrige Foundation because I don’t know that all of our audience knows exactly what the Baldrige is all about. It truly is more than just winning an award. Perhaps, Dr. Nygaard will talk about their Baldrige journey. Tell us what is important to the Baldrige Foundation with regard to healthcare leadership.
The roots of the Baldrige were to be able to clarify exceptional performance. It was originated by President Reagan. Malcolm Baldrige was his Secretary of Commerce. Reagan was very interested in American exceptionalism but you couldn’t just talk about it. You had to have a reference. For the four years that Malcolm Baldrige worked with him, he worked on preparing the Baldrige framework, which is now housed within the National Institute of Standards and Technology.
What Baldrige has created is a truly transparent performance excellence environment. I had the opportunity to participate in their national quest for excellence conference in the Washington DC area. I was struck by the incredible exchange of information and openness. There were fourteen winners because they were unable to hold the event during COVID. It was remarkable to see the transparency, the number of interactions, and the shared learnings around leadership, strategy and workforce.
You never see that in almost any other environment because people are typically concerned about intellectual property and not giving away the special sauce or whatever. In the Baldrige, it’s all about curiosity. It’s all about transparency. It’s all about being servant leaders and making sure that the organizations can be successful. Every one of those leaders on the stage said, “It’s not being the recipient of the National Baldrige Quality Award. It’s actually the journey.” There were multiple winners. There were some that have won three times. There were some that had won twice on the stage. It was remarkable.
One important learning from the pandemic is that we now have to be prepared for the next pandemic. Click To TweetI love the fact that one of the requirements for winners is that you must share your secret sauce. It’s not so secret. It’s pretty formulaic but you have to stick to it. Maybe we’ll get a little bit of insight from Scott. Scott is the COO of one of the premier health systems in America. It’s an interesting organization because Lee Health in Central Florida, in Fort Myers, in that whole region is still a public health system. You have a governing board of how many people?
We have ten publicly elected board members.
CEOs out there, think about your own board or people having an interaction with them. Think about that. It’s hard enough when you select them but what about the public voting for people? You’ve gotten great success and you have those ten publicly elected board members and no direct tech support.
That’s correct, Roger.
You get the oversight without the benefit. Scott is a Minnesota-native and a Midwest guy for most of his career. He’s a Pulmonary Critical Care Specialist Consultant, which is a great specialty for having insights to come through COVID. I’m sure that you get pushed back into your clinical role oftentimes, and we would love to hear about that.Lee Health is the dominant provider in his area. It’s a safety net hospital. You’ve been there for a number of years. It’s remarkable to see how that system has grown. There’s no doubt in my mind that you’ve been a critical player in helping direct and strategize that growth. Scott is one of my favorite healthcare leaders. It’s fun to have watched your career. Don’t you have about 750 in your multi-specialty provider network?
We’re approaching almost 1,000 clinicians. That’s 500 physicians and about 400 advanced providers, 90 locations across the county in Southwest Florida, and then some presence in Charlotte and Collier County near us.
In our past conversation at this roundtable table, we talked about how COVID is the gift that keeps on giving, isn’t it? There have been plenty of negative things that have come from it, but we also talked about some of the positive things. Chuck, you have a unique relationship with a lot of health systems. We’re looking for your insights, as well. What are some of the things that Lee Health found after your head stops spinning and you see what’s going on? What are some of the things that have changed forever in healthcare because of COVID?
In terms of what has changed in healthcare and what have we learned, one of the learnings I hope for the world, not just for Lee Health, is that we should have foreseen that we were going to have another pandemic. We’ve had several across the world in the past. Unfortunately, due to some of the methodologies, which were more focused on cost reduction, in-time inventory and things, the supply chain issues manifested in a totally different way. We weren’t prepared for the magnitude it need for, in this case, in particular, personal protective equipment.
Our people never went without it. We had a very industrious supply chain but we had a lot of travelers coming in who testified that in many other places, people were simply going without adequate personal protection. That’s unfortunate for anybody who’s at the front lines and serving in healthcare in terms of trying to do their best. If they don’t feel safe and well-cared for, it’s hard to provide a safe environment for the patients that they’re trying to serve. That was one learning early on from the pandemic and one that we have thought about and said, “We now have to be prepared for the next pandemic.”
I created an opportunity for us to aggregate supplies to be available with a six-month inventory, something we’re going to have to turn on a regular basis so it’s enough to last. We can’t count on everybody else to be prepared. We’re going to have to become prepared for our region since people count on us to provide that service. The other thing during the pandemic was the hospital became the center of the universe again. We’re moving to more ambulatory care. We’ll return to that as time goes on.
However, the focus on acute care, somebody who people expect doors to be open 24/7, 365 came to the forefront. Do we have enough ventilators? Do we have enough ICUs? Do we have enough oxygen? Do we have enough personal protective equipment? Do we have the right drugs and treatments? Do we have enough doctors? All of that manifests itself in magnitude. As things return back to normal, more and more people will want to return to the outpatient setting. How do we continue to focus on the long-term needs of healthcare and not just the short-term impacts of COVID?
The third and last thing that I’m still concerned about is the emerging and continued mental health and well-being of our workforce globally, but manifests particularly in healthcare. I know we’ve had a number of physicians and nurses who exited the profession. I talked to one of our physicians who’s decided to make a career change based on the burden and stress to recognise some things and maybe reprioritized. It’s not all bad, but the importance of family, for example, and a different work-life balance would allow them to spend more time on the things that became important.
As we have workers returned who went out and became travelers, interfacing with people who feel they were abandoned in COVID by their coworkers is a real point of potential conflict and something we need to proactively manage. The last thing is I still think there’s a lot of unprocessed grief out there. It’ll manifest in different ways. A lot of it will be behavioral and maybe ongoing resignation from the workforce. In Florida, we had a task force that said 1 in 4 nurses is at risk to leave the profession, which is significant.
During the pandemic, the hospital became the center of the universe. Click To TweetSome of the nurses, I know anecdotally just by talking to my friends in the profession. With CARES Act money coming in, we began to throw money. Systems begin to throw money at the problem. You get people’s expectations up, “You’re paying me this much for working in a super high-risk environment. I stayed and did it. Now you want to cut my pay?” You’ve got all that stuff filtering through. This profession attracts good-hearted and sincere people who are caring. They are helpers. It attracts helpers. I’m sure you’ve seen that even helpers have their limits and they get exhausted.
As we went out and get rounds on some of our people, one of the things you’re reminding me that I had to tell people is despite all being short-staffed and the burden of not having families present, to be communicators, and help share some of the burdens in communication which changed the dynamic. Being the intermediary of communication with devices via FaceTime or other mechanisms of connecting family, the entire workflow changed. People would feel guilty about the fact that they were not able to provide the same level of care as pre-pandemic. Empathy, compassion, and fatigue are the words that have been used in the industry. I would have to tell them, “We’re in a crisis. We have to prioritize our work. We have to decide what’s most critical.”
At least in our system, I felt like our staff did a great job of prioritizing what was most important. Unfortunately, not everybody got a bath every day or had their linen changed every single day unless it was necessary. Some of those things could wait and they were not the top priority, but the guilt of the healthcare worker just struggling to think, “I’m not doing my job the way I want to do my job,” was manifested significantly. We have a lot of people who would break down in tears feeling that they were not giving the patients what they deserved or needed.
I’ve even heard people say very snarky and negative comments because they can’t come into the hospital. They can’t see their loved ones. They are concluding wrongly that, “They’ve never wanted us there anyway. Now, they got what they want. They don’t want us family members interfering with their care.” I said, “No, you have that all wrong. It’s a help.” Of course, every once in a while, there are difficulties. In your practice, you’ve seen a few difficult patient family members and you have to deal with them. For the most part, family members, having them there is a big plus. It’s a help.
The behaviors that come out are mostly out of fear, confusion, fear of loss, and feeling vulnerable. In healthcare, you’re in a foreign land and foreign language. It’s difficult to navigate on a good day, and then the unknowns of this pandemic. There are so many unknowns that we have been continuing to learn about and will continue to learn for the foreseeable future about the pandemic.
I do have to say one thing. Our community was incredibly gracious. The amount of generosity being handed on, masks and food brought to our people. Sheriffs and police departments were putting on light displays in our parking lots to encourage our staff. It was a rallying cry for the community to come together. I know our staff truly appreciated that.
I’m sure you have a strategy that you have in your head and are getting laid out post-COVID. I’m sure that you had a vision and a strategy in mind years ago on how you’re going to get the system to where you’ve gotten into already after those years. I’m just wondering with everything that you just described, how do you get your team members to actualize the strategy?In other words, they are overwhelmed. They’ve had a million things on their plate. They’re understaffed. They wanted to do the right thing for the system, for the doctors, for the patients, for their coworkers, etc. How do you actually get them to act day-to-day on getting the strategy to move forward?
In the middle of the pandemic, we had a heart-to-heart conversation with our leaders. Everybody was caught up in the activity trap. We had to start planning for the next year. One of the conversations I said is, “We have to set aside time despite everything that’s going on around us to have time as a senior group for strategic planning.”
People were like, “We can do that later. We don’t have to do that now.” My response was, “That’s the duty of leadership. We don’t provide for future direction, thought leadership, and stay focused. Yes, we have a crisis. Yes, we need to do all those things, but we cannot forego what is going to be required of us in the future. Things may change in terms of pace or the what or the how, but we still owe it to the organization to provide a long-term direction, and to communicate regularly about both the short-term and the long-term need to stay focused.”
A simple example of that is our staff, by the way, because if you look at the literature, there was a lot of corrosion of quality outcomes and hacks and stuff. Our team actually sustained their performance throughout. They remained a 4 to 5-star performance across all of our various areas which were pretty amazing. It says something about the focus and the prioritization of the work at hand, both short and long-term. We had a lot of discipline. We were upside down financially. At one point, $100 million ended up through some of the funding and CARES mechanism, but our people rallied to try to help the organization and focus from a financial perspective, despite all these challenges of rising costs of labor, supplies and whatnot.
That plan, we’re refreshing again. We’ve stayed on the course. We did become more focused, which isn’t a bad thing. We took a few things off the list that weren’t necessarily priorities and didn’t seem to make sense going forward. Maybe they were services somebody else in our community could already do or was doing. Why compete with that?
We created a few joint venture partnerships. We have a rehab hospital that was already coming to town and said, “Let’s not compete. We have a rehab hospital. We’re trying to relocate anyway.” We could give a better footprint of service by partnering with somebody. It’s been difficult. We had to offer services in the telehealth space. Those ebbed and flowed, we gave them away for free for a while just in service to the community to create better access.
We didn’t want financial to be a barrier to access despite all the challenges we had. It’s served its purpose trying to find the sweet spot going forward. We’ll have to figure that out as the reality of payment and whatnot comes back for that service. It’s pretty price-sensitive in terms of the use of it, and whether or not it’s going to be reimbursed.
There's a lot of unprocessed grief out there that people manifest in different ways. A lot of it will be behavioral. Click To TweetIf I could summarize what I’m hearing, it’s rare to hear this in action but it sounds like the vision and mission of the organization is not just a piece of paper in a frame on the wall somewhere. It sounds like it’s lived by the organization. When you say that you did all these things for the community because you feel like that’s your role and your responsibility, it sounds like that’s part of the fabric of the organization. It’s not just something that somebody looks at every couple of years.
We’ve worked over the last few years hard on mission, vision, and values, and trying to articulate those in a way that makes sense to our staff. We’ve engaged our staff in building something we call the Lee Health promise, which is a way or set of words they can relate to and own. I do think that got a little bit lost in this. We’re talking about refreshing that commitment to our promise because there have been a lot of changes over time and a lot of weathering, but we will refresh that at this point. That’s one area of opportunity for us to bring back to the forefront but yes, our mission, vision and values served us well.
You talked about talking to providers about their frustration and thinking about leaving. Are there some things that have helped them like telehealth visits? I know in my own experience, I tried pre-COVID to get groups of physicians interested in that. It took a pandemic to get them to see that that could be a positive thing. “Where are all our patients? How quickly can we get this televisit thing going?” Long term, do you think people will continue accessing the system that way?
The different mechanisms of providing care have allowed physicians to reach out in service to more people. If there’s a risk to it it’s, “Now I have even more points of contact. Does it lead to burnout?” I don’t know that. It’s a to-be-determined chapter. I will tell you one thing that did go on in our organization that physicians took advantage of. We had what we call the Rest Team who went around and visited with staff and physicians. They created dialogue on the various units and did various aspects of reflection, meditation, prayer or whatever people wanted. They started a keycard service.
It’s interesting how many people are taking them up on the opportunity for fellowship and interaction. The most common thing I hear post-pandemic is it’s so good to see people in the endemic face, and actually see them and not just know them by their eyeballs. It’s to actually see a smiling face or even a sad face where I could provide more comfort care, and engage with the human being again. I know that’s learning for both our physicians and staff.
I don’t know what your exact numbers are, but I’m guessing that your revenue mix, like most systems, is pretty heavily weighted to outpatient. Certainly, net revenues are more profitable to care for your outpatients. How are you experiencing the patient flow? Has it come back?
Outpatient flow is broken still, not because people don’t understand the opportunity but just like we’ve had labor supply issues, so does the whole community. Whether it’s home health agencies or long-term acute care hospitals, or whether it’s skilled nursing facilities, they simply have had trouble getting staff. Again, who should take on all that burden from the hospital, 24/7, 365? We have had our length of stay gone for a full day. We’ve had an excess of 30,000-plus days during the pandemic. Despite all the thoughts out there that we’re receiving revenue enhancements, it’s not significant to offset the cost.
We went through an analysis and noted that if we were to improve our flow, we could reduce our cost by $33 million and still have the same revenue. We have to fix the flow. It has to be addressed over some period of time. We are reaching out to our sniff community partners, with Alpex, with Hospice, and starting a bunch of workflows to try to address that problem, both short and long term. It should be addressed regardless of the pandemic. It’s just good business practice.
You’re feeling pretty comfortable that everyone is getting the message. How about your customer-facing communication? How are you signaling to the community that it’s safe to come back to the hospital?
From the very beginning of the pandemic, we chose to be totally transparent with our numbers. Our number of admissions, our number of discharges, our deaths, the number of people on ventilators, and the number of people in our ICUs. We were totally transparent with the community throughout. We’ve had daily briefings. The news media was there every day. The TV stations were there every day.
That did a lot of good in terms of reducing anxiety and letting people know exactly where we stood. There was confidence in our system and the ability to handle it. We were honest if we had delays or people in hallways, or we were struggling to serve people. That was probably the best thing. We’ve continued to be transparent as we’re going through the next phase and getting things back on track.
Being almost the sole provider, at least the major provider in your community, puts on a lot of responsibility. You had to go deep into this and care for your community. It’s wonderful that they have responded and given you the support, understanding, and affirmation that you need. Is there anything else that you can share with our audience? What does the future look like? What’s going to be different in the future? There are obviously things we’re going back to. Things that we had to put on pause. We’re going to get back to those things, the planning horizon and the strategy are so important. What’s new? What are you looking forward to over the next few years?
For us, it’s focusing on as the market moves towards value. We are replacing a legacy hospital, which nobody is investing in hospitals except for health systems these days. We’ve scaled it back based on use rates and projection, but we may have more competition. My caution to our system is not to overbuild the high-cost fixed asset model of healthcare. It’s the one thing that could get us into trouble.
Perhaps we should even let somebody take a few of those bets and patients for beds and focus on the ambulatory growth and the access. We have been rigorous about outpatient growth. When I got here, the system revenue was about 15% on the outpatient side. Today, we’re a little over 50%. We’ve grown significantly there.
It's difficult to navigate on a good day and then remember the unknowns of this pandemic. We'll continue to learn for the foreseeable future about the pandemic. Click To Tweet
We understand that we provide service to the entire community, including an emergency room and hospital, but we’re so much more than that as a system of care. Trying to articulate that value to our community is the next challenge, and engaging our patients or community members, and trying to help them understand all that it does to keep our community functioning and strong.
Congratulations, Scott. You have done an awesome job. We’re proud of you and great to know you. We’re great to count you as a colleague. I thank you for the work that you’re doing. This has not been a fun period of time and you’ve stayed steady in your leadership and your team. I know you believe in them. You are one who’s committed. We didn’t talk too much about Baldrige, but your leadership is long and effective. I know that you invest in your teams and education. Thank you for that.
Thanks for having me.
It has been our pleasure. On behalf of Ben and Chuck, we are grateful to you our dear friend, Scott, and we wish you all the best. We thank our readers and we look forward to having more conversations like this in the future.
Dr. Scott Nygaard serves as Chief Operating Officer for Lee Health. In his role, Dr. Nygaard is responsible for all clinical operations throughout the health system, including all hospitals, ambulatory, post-acute and ancillary services. Dr. Nygaard joined Lee Health in 2010 as the Chief Medical Officer for Lee Physician Group. He was later promoted to Chief Medical Officer for the health system and then Chief Medical and Clinical Integration Officer.
During his time at Lee Health, Dr. Nygaard has spearheaded several key initiatives, including the Florida State University College of Medicine Family Medicine Residency Program at Lee Health to address the shortage of primary care physicians in the community.