Transcript
CHAD MULVANY
On today’s episode of “Achieving Health,” I’ll be joined by special guest Melinda Hancock, executive vice president and CFO at Sentara Health. Melinda will share her outlook for hospitals and health systems in 2026, including key industry trends, challenges, and growth drivers. Stay tuned.
ANNOUNCER
This is “Achieving Health,” a podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization. Here’s your host, Chad Mulvany.
CHAD MULVANY
Welcome to “Achieving Health.” I’m Chad Mulvaney, director in the Healthcare Practice at Forvis Mazars. Thank you for joining me. If you’re looking for our usual “Washington Watch” updates, let me remind you that we’ve moved those segments to biweekly standalone episodes. Our most recent “Washington Watch” episode was last Wednesday, January 7th, where we covered the delay of the 340B rebate model and other key policy and legislative updates.
I hope you’ll give it a listen if you haven’t already. I’ll be back with the next “Washington Watch” on January 21st. Be sure to follow us on your favorite podcast platform to be the first to know when we have a new episode. For today, we have our first of our monthly special episodes featuring in-depth conversations with industry leaders who will share insights on the challenges and opportunities they’re navigating.
So, without further ado, I’d like to welcome our guest for today’s episode, Melinda Hancock. Melinda is executive vice president and CFO of Sentara Health System, one of the top 20 largest nonprofit integrated health systems in the U.S., with 12 hospitals across Virginia and northeastern North Carolina, as well as a health plan that serves more than a million members in Virginia and Florida.
Melinda, thank you for joining us today. Looking forward to the conversation.
MELINDA HANCOCK
Thanks, Chad. Really appreciate the opportunity. And I think it’s going to be a great conversation.
CHAD MULVANY
Absolutely. Maybe as a place to start, could you tell our listeners a little bit about yourself and how you came to healthcare?
MELINDA HANCOCK
Certainly. So, I grew up as the child of a physician who actually encouraged me not to go into healthcare. However, I was a bit fascinated by it. But what I soon learned as I got into my college life, that biology and chemistry were not my strong suits, so, I pivoted. I always knew I had a knack for math and then, of course, discovered, wait a minute, I can marry my love of healthcare with my talents in math.
And so, I actually started taking the actuarial exams, and I had to take an accounting class for the second exam. And that’s when I actually discovered accounting. And so, I was able to marry the two. So, it’s been a great journey. I never imagined it would take me all the places I’ve been, but it’s provided me enormous opportunities to work for everything from Catholic Health System, to a 70-bed hospital, to academic, to public accounting, consulting, and now here at Sentara Health. So, it’s been an amazing journey. I’m very, very privileged.
CHAD MULVANY
No, it’s been an absolutely great journey. And I as long as I’ve known you, I didn’t realize you were almost an actuary. So that’s a fun fact that I never knew.
MELINDA HANCOCK
Not one that goes on my resume. But yes.
CHAD MULVANY
I mean, it’s a fun trivia question. What do you anticipate will be the most significant growth drivers for health systems over the next five years?
MELINDA HANCOCK
So, I think when we think about the challenges that we have before us, right now healthcare is just in a lot of change. I’ve seen the words recalibration, upheaval. I’ve seen a variety of different words to describe this really unique situation that we’re in right now. So, I think as we think what’s going to drive growth, I think it will adjust to how we scale our administrative investments.
Technology is a large investment that many, I think, if not all, health systems are spending quite a bit of time and energy on what is the right level of technology, automation, machine learning, AI, all of the above. And how do we invest in that? But then how do you get to scale as well? And so, when you look across your administrative functions, what is the right level of administrative functions to support the business?
So, I think growth might be centered a lot around how do we share in some of the investments that we’re making across our different platforms with partners. So, I don’t know that it’s always going to be a straight M&A as much as it may be, “Hey, I see you’re investing in this area, whether it’s revenue cycle or IT, cybersecurity, whatever it may be.
Is there an opportunity for us to share in some of those investments and also some of our learnings?” I do think they’ll continue to be M&A due to financial constraints. Because I think obviously we’re in a really unique situation where our finances, right now are projected, I’m sure with every health system will go down.
CHAD MULVANY
And it almost sounds like on the back-office piece of it, the IT investments around administrative, it almost sounds like an MSO for health systems.
MELINDA HANCOCK
I think that is one concept that, I think is worthy of exploring, and what does that look like? I think the challenges is the different instances of IT platforms and the different data sets. Those will be the things that are hard to do. But if you can figure out firewalls and you can figure out how to work across different instances, I think that is an opportunity.
As you know, each health system has its own unique blend and build of different administrative functions. And so, the ability to then standardize and be able to share a platform is going to be critical to that.
CHAD MULVANY
Right. That’s the thing that’s always been challenging in getting to economies of scale. So, Melinda, from your perspective, what are the biggest forces that will impact hospitals and health systems over the next five years?
MELINDA HANCOCK
Regulatory is the first thing that comes to mind. Of course, that takes a lot of different shapes. So, I think whether it’s H.R. 1, or whether it’s the challenge that we have before us on expiring tax credits or state-specific issues since every state is in a different situation, that will be, I think, the largest force impacting us.
That’s going to impact everything from expenses to your top line, since the component of this is Medicaid reductions, and that’s our largest percentage, that we care for through our health system between our health plan and our care delivery. So, I think the ability to be prepared for that. Could there be mitigating circumstances and changes between now and then?
I don’t think we can bank on it. I think you have to basically plan for what you know today, but I think that’s going to greatly impact almost every aspect of your health system. And, you know, from how much leverage you want to have now going into that, to the investments that you’re making before the revenue reductions really start coming down through the state directed payments, it’s going to drive a tremendous amount of effort.
CHAD MULVANY
Melinda, I would agree with your assumption that the base case is the thing that you’ve got to plan to, kind of, what we know today, because trying to predict whether or not there’ll be relief in some way, shape or form in a future Congress is a big roll of the dice if you’re wrong.
MELINDA HANCOCK
It really is. And the fact that we all start, Chad, from a different place, I think as I educate people on H.R. 1, they’re surprised to hear about the variations by state and how some states are impacted greater than others. Virginia is at the top of that list. So, I think it’s interesting when people actually realize that the Medicare payment rates, while they start from a standard rate, they quickly blossom into different variations based on wage index and whatnot. And that is a lesser known fact when people understand the impact of H.R. 1.
CHAD MULVANY
You know, I hadn’t thought about an analogy, that is, an analogy between the two. But I think that’s exactly right. And that’s, to your point, whenever somebody asks me, well, what’s the impact of H.R. 1, my next question is, well, what state are they in? What type of provider are we talking about? Or are we talking hospitals, health systems? Are we talking physicians? Are we talking long-term care? It’s, you know, beware the stock answer.
MELINDA HANCOCK
Very well said. Very well said. And it’s something that we’re using to help educate legislators and community members when we talk about our impact, because if they hear it from another health system in another state, it sounds different sometimes. And so, we want to try and educate on that. We’re also trying to educate those who might be able to mitigate some of this in the future as well.
CHAD MULVANY
Yeah, absolutely. You know, given the complexities in the environment, given the ambiguity with some of the things that we’re trying to navigate, what trends do you think we’ll see in capital allocation over the next five years? And I also realize this is going to be somewhat market specific.
MELINDA HANCOCK
Right, so, I think, you know, put my crystal ball or I’ve got my eight ball around here somewhere. As we try and look out, I think the easy answer for me to answer is capital allocations are going to come down. I mean, I think, obviously they’re going to be leaning more towards IT and technology, to my earlier comments, but I think overall the benchmarks will fall.
I think there’s going to be a need to preserve capital, to make sure that we have the balance sheets to withstand the changes all the way up through 2032. So, I think people are going to be much more cautious about their balance sheets and how they spend and leverage their capital at this point.
CHAD MULVANY
Sort of anything that you’re doing in terms of significant investments is more likely than not going to be replacement of something that absolutely needs to be replaced as opposed to a significant investment is kind of an offensive move unless there’s a real clear opportunity.
MELINDA HANCOCK
Well, and some of us have aging plant that we can only put so much off, and we have to make sure that we’re continuing to not defer maintenance on these buildings. I think that will be some of the challenge going into these years, is people might want to preserve their capital and pull back some. We also can’t build up the deferred maintenance on buildings that need to be replaced or continually updated.
So, I think that’s going to be the balance and how we finance or how we might do some larger projects, I think will be on the more conservative side. Again, in the in the overall effort to preserve the balance sheet.
CHAD MULVANY
And I think about my friends in California with their seismic requirements and those that aren’t yet meeting the standard. It’s an incredibly tough place to be for them right now.
MELINDA HANCOCK
Absolutely.
CHAD MULVANY
What are some of the underappreciated risks you’re tracking that could impact hospitals and health systems in, say, the next 18 to 24 months?
MELINDA HANCOCK
Workforce. First thing, understanding the need to invest in long-term solutions for your workforce. I think that’s a huge opportunity. I think when I looked at the AHA 2026 Workforce Scan, I think they had some really good components of that when they talk about the financial stress that our systems are under, and the ability to continue to invest in our teams is going to be so important.
We then have an aging nation. So, when we also think about the workforce itself, it’s aging. And so, from an upskilling perspective and how do we think about the different generational differences on what they expect from their workplace and from their employer? We also have that rapid technology transformation that we’ve already referenced. I mean, I think when you think about a couple years ago, how frequently did you say the word AI?
And then, can you get through a single conversation today without the word AI? So, I think it’s an evolution, a very quick evolution, that we’re undergoing right now with technology. Also, there’s just an urgent need for new pipelines and for new skill sets that come also with this technology, but also people redesigning care.
So, for example, for us, we are increasing our APP-to-ND ratio. So, that’s a whole new pipeline that we need to make sure that we are thinking proactively about and being very clear in how are we going to be able to hire what we need to hire. And retain, giving that changing workforce expectation. And then also just the geographic disparities, that we are now having to access our pipeline and our workforce through and making sure that we understand, who can be remote, who can be hybrid, who needs to be resident.
Obviously, direct care delivery is one. But then when you start getting into virtual nursing, how does that play into the overarching expectations of our nurses at the bedside? And then, of course, I can’t not talk about physicians. You know, we recently heard record class for medical school enrollment this year. So that’s great news, except for the fact that we don’t have a good residency pipeline to make sure they match into.
While I understand we have plenty of slots. It’s where they are and what specialties they’re in. They don’t seem to be aligned to the preferences of our students who are graduating from medical school. Then you add to that the challenge of clinical sites for training, as well as the need for preceptors. And so, I think there’s a lot of challenges as we think about that workforce as well. And how do we change some of those expectations? I could go on about workforce, Chad. I’ll stop.
CHAD MULVANY
Yeah. No. And, honestly, if you want to keep going, let’s do it. Because I think it is a fascinating conversation. And there were a couple threads on it that I’d like to pull. You know, when you think about kind of emerging pipelines or talents, if we were to make you queen of the world, if you will, what would you do to sort of strengthen the pipeline? And I’m not talking about Sentara specifically, but like, what’s one societal investment that you think would be most leveraged?
MELINDA HANCOCK
Great question. I think we have to understand, we have to look far out. And that’s hard right now. I mean, we’re doing three- and five- and seven-year plans to match up with H.R. 1, but it’s very challenging to know what healthcare’s actually going to look like in seven years. What we do know, though, is we will be more technologically advanced.
I think then we have to start setting the expectations for our workforce to be comfortable with technology and also be nimble with it. And being nimble means understanding also, how does that change my job? And that’s okay. It’s a good thing. And how do we make sure we do it in the best interests of our patients and our members?
So, as we look at upskilling the pipelines and thinking differently about the pipelines, I think it’s setting those expectations and is the curriculum of today, is that feeding what we want for the future? And so, it’s really important that we examine all of our different curriculums and all of our different pipelines at this point to say, is it training the workforce of tomorrow?
And sometimes that’s a hard conversation to have, because again, do you have the right faculty and do you have the right expectations of what that graduating class should look like to then be able to come into your organization and be productive, especially in the new ways of care model redesign, of more technology assisting in the care delivery.
So, it’s a really important conversation to have. And for all the different pipelines that you have, how do you have that consistently?
CHAD MULVANY
Yeah. You know, I hadn’t thought about it. Obviously, managing change and change management from a leadership perspective is a skill. But then on the back-end of it, if you are someone who the change is being enacted upon, or your processes, it’s almost how do we build into the curriculum the ability to be flexible, to be nimble. And I don’t know what that looks like, but I think that’s an important call out.
MELINDA HANCOCK
I talk about nimbleness a lot, and it’s a little vague. I recognize. But if you think about, so, let’s take it from a financial perspective. Our ability to be nimble means that all the leaders here at Sentara Health know their business so that as we get new regulations, as we get the final outpatient rule for ‘26, and that has made some significant changes, how do we adapt to that?
How do we make sure that we know our finances well enough, not only what changes in the regulations, but how do we make sure, strategically, that we are still meeting the needs of our communities and serving our patients and members in the best way? And by knowing your business, financially and otherwise, that’s how you stay nimble. And when you think about the amount of change we’re going to have for the next seven years, it’s critical.
So, 100% agree with you about change management. We have to be able to bring people along, and whatever methodology you use, it’s important that you have one so that we can also make sure that our leaders are well equipped as well as our team members.
CHAD MULVANY
Yeah. No, I think that’s fantastic. And then the other piece of it is I just sort of think about it from hiring. How, from an HR process, do you start to screen people to make sure that they are nimble? You know, what are the questions you ask? What are the screeners that you put in? And that’s obviously well beyond my skill set to think about that. But it’s certainly something that if I were in HR, it’d be something I’d be staring at the ceiling, spending a lot of time thinking about.
MELINDA HANCOCK
Well, I’ve hired a couple leaders this year and some of the, you know, behavioral questions that I ask related to that are to give examples of times where it didn’t work. People love to talk about their successes and what they’ve done and their accomplishments are on their resume, but what’s not on the resume is tell me a time when it didn’t work and why? And did you have the information you needed at the time? Was your team informed? What could you have done differently? Because that tells me then how are they adjusting? Did they learn from it? But the ability to critically step back and say, well, what if? What if I had done it this way, that way? And that way I can course correct. So, I like to do my examples in my interviews along those lines.
CHAD MULVANY
And I think that’s a great question, particularly the “what did you what did you take away from this experience to help you next time?” You know, the other thing you said in the conversation around workforce was just the increasing, and this is, you know, all health systems are seeing this, the increasing number of APPs as part of the provider mix. How is that impacting the design of your provider enterprise, physician enterprise, your medical group?
MELINDA HANCOCK
Well, let’s start with the consumer. So, we do like to use the word consumers just to recognize that there are choices. And it may not be the patient making the choice. So, when we think about who’s delivering the care, I know I have members of my family that expect a physician. And so, there’s a certain level of education to the consumers of who is the right person to see you, given your current situation.
So, we have started some of that, but there’s a lot to be done, I think, across the organization. I don’t think this is health system specific. I think it’s helping educate consumers on who can treat you. And when we started thinking about saving the physicians for the complex and the really, you know, medically challenged patients, then how does that free up their time?
If we can get those lower-level cases to APPs and, but it is getting the consumer used to that. So, we’ve been deliberate in how we segment our patients and making sure that we get our most medically complex in on a regular basis to see the physician. But then, how does that follow up happen? Perhaps with advanced practitioners. Or, you know, if you need a vaccination or a prescription update, does that really need to involve the physician?
So, we’ve been trying to be deliberate on our workflows and how we actually then distribute that across our different practitioners. But again, it also is about educating the consumer.
CHAD MULVANY
No. And I think that’s the important piece because sometimes you talk with folks it’s like, well, I didn’t get to see the doctor. And it’s like, well, you probably didn’t need to see the doctor.
MELINDA HANCOCK
Right. Right, and we will always have patients who want to see the doctor. So, how do we also, you know, part of our purpose here at Sentara Health is to meet people where they are on their journey of health, because everybody’s in a different place. And so, how do we make sure that we have multimodal opportunities for people to meet healthcare needs in their comfort? So, whether it’s virtual, it’s in person, email, whatever it may be, how do we make sure we have to meet our patients and members where they are?
CHAD MULVANY
You know, I think that patient-member focus is going to serve you guys well. I mean,it has traditionally, but I think will carry forward. Over the next 18 to 24 months, what are some of the underappreciated opportunities?
MELINDA HANCOCK
So, I think being purposeful about the technology advancements that we’ve talked about, what does that mean, and how do we think differently about that? We’re in the process of reimagining our revenue cycle. And so, how do we make sure that we think of each component much more holistically? And where is the where is it best served for our patients?
And imagining a world where, you know, we have minimal touches to that patient up until care delivery. And so, how does technology help us with that? But then to my earlier comments about meeting patients where they are, also always having that opportunity to not use technology when some of our patients are not comfortable with it. And so, I think that’s going to be the challenge is we’re in this kind of in-between world.
Banking is always a great example, incredibly comfortable doing all your banking online. But sometimes you just want to walk in the bank. But there are people who would prefer to always walk in the bank. So, how do you make sure you have both? And, while still pushing the technology since obviously generationally, that’s where the expectations are moving.
CHAD MULVANY
And how do you manage that consistent customer experience across all the access points, all the sites where you interact?
MELINDA HANCOCK
Correct. It’s, you know, health systems have many, many front doors. So, how do you standardize where you can, at least from a consumer experience perspective? And then, how does technology then feed that and support that? It shouldn’t be technology first, it’s still patient-member-consumer first, but then how does the technology then advance and support that? And then back to, again, the education that we need to have on the workforce.
CHAD MULVANY
Yeah. It’s, you know, you always have to remember that it’s the technology is a tool to solve problems, but you have to find the right problem and apply the right tool, not the other way around.
MELINDA HANCOCK
Very true. But you and I both probably have many examples of look at this cool technology and then building a process around it instead of to your point, what are we trying to work, where are we trying to get to? And then how does the technology advance and then support that? Because healthcare’s always going to be about human experience, always.
Yeah. No. Absolutely. You know, Melinda, you’ve been a leader and in leadership roles for a good chunk of your career and I’ve always found you to be a very compelling leader. What’s one piece of advice you’d give to someone who’s moving into an executive leadership role for the first time in 2026?
MELINDA HANCOCK
First of all, thank you. I feel myself getting a bit red, it’s good thing it’s a podcast. So, thank you for your comment. I think the one advice that I’m giving these days to folks is about knowing your shadow. I think as you move into an executive leadership position, it’s so important to understand the shadow that you cast, and you have to be able to be aware of that regardless of the situation, especially now that we’re entering very challenging times.
A lot of questions, a lot of concerns. What is healthcare going to look like? Back to all of our previous comments, casting the right shadow of confidence, and we may not have all the answers today, but we have the team to figure it out. And the biggest gift you can give is your reaction. It’s very easy to react negatively and in the moment to situations and to news, but I think it’s important as leaders that we understand what message we’re sending with our reactions.
And so, it’s easier said than done. You have to know yourself very well to be able to stay calm in perhaps not calm events and situations, but it’s all part of that shadow that you’re casting. If you are not paying attention to financials, you are sending the message, whether you intend to or not, that it’s not important to you.
And so, that’s the shadow you’re casting. Similarly, you can take that with anything across the business, how you react to it, the attention that you paid to it does get cast. And so, I think that’s one of the most important things that you can do as a leader is to know your shadow.
CHAD MULVANY
No, I think that’s a great piece of advice. And I think, you know, if I had to say one of the things that I’ve always been impressed about with your shadow is the fact that, just through this conversation, and it’s not just at Sentara, but across our interactions over our careers, when we bumped into each other, it’s always been about the patient, about the member. And that’s sort of always been the North Star. And I’ve always admired that. So, thank you for sharing that.
MELINDA HANCOCK
Well, thank you. I’ve been fortunate to work for organizations that feel the same way. And so, that has definitely fed that. But at the end of the day, we are in an industry where we experience our own business, and so do our neighbors, and so do our family. And so, it’s so important that we understand through that lens, all that we do has to come through that lens.
CHAD MULVANY
Yeah. And just to kind of date it and to sort of, I remember when I was at HFMA and you were on the board, I don’t even think you were chair track yet, but you were one of the first CFOs that I’d encountered that was heavily focused on understanding the quality measures and really pushing HFMA to move in that direction. And that, to me, was always one, incredible, incredible foresight, but two, very much patient-focused. So, I’ve always appreciated that.
MELINDA HANCOCK
Well, thank you very much. I feel our outcomes are critical. Are we improving people’s lives? And so, how we measure that is still a journey. However, I think, at least having consistent measures and how we measure it also gives us opportunities to compare, which is really important. And now get paid, that we should get paid for the quality provide. Absolutely. I just wish it was a little simpler, Chad.
CHAD MULVANY
If I could snap my fingers, I would snap my fingers out of a job and just make it simple.
MELINDA HANCOCK
Right, right. But think of the progress that we’ve made. I think back to, you know, 2010, when all this was really kind of getting geared up. We’ve come a long way, but we still have a ways to go to truly put our dollars on the line from a risk perspective for the quality of care that we provide. And are we improving patient outcomes?
CHAD MULVANY
Yeah. You know, progress has been slow, but I do think we’re getting there. So.
MELINDA HANCOCK
Agreed. Very much so. And I always appreciate your attention to it as well. Thank you.
CHAD MULVANY
Well, Melinda, thank you again for joining me. I enjoyed the conversation. Always insightful and so, really grateful for the time that you’ve given us. So, thank you very much.
MELINDA HANCOCK
Thank you, Chad. It’s really been fun and great to catch up with you again and appreciate the great conversation.
CHAD MULVANY
I also want to thank our listeners for tuning in and following “Achieving Health” wherever you listen to podcasts. If you want to learn more about the topics we discuss here, be sure to check out the show notes for related content and information about how to get in touch with me and the team at Forvis Mazars. As I mentioned up top, I’ll be back next Wednesday, January 21st with the next round of “Washington Watch” updates.
We also have something exciting planned for the podcast later this month, and I look forward to sharing more details next week. Until next time, here’s wishing you good health for you and the communities you serve.
ANNOUNCER
You can follow “Achieving Health” on your favorite podcast platform or visit forvismazars.us/AchievingHealthPodcast to learn more. “Achieving Health” is produced by Forvis Mazars LLP, an independent member of Forvis Mazars global, a leading global professional services network. Ranked among the largest public accounting firms in the United States, the firm’s 7,000 dedicated team members provide an unmatched client experience through the delivery of assurance, tax and consulting services for clients in all 50 states and internationally through the global network.
The information set forth in this podcast contains the analysis and conclusions of the panelists based upon his, her, or their research and analysis of industry information and legal authorities. Such analysis and conclusions should not be deemed opinions or conclusions by Forvis Mazars or the panelists as to any individual situation as situations are fact specific.
The listener should perform their own analysis and form their own conclusions regarding any specific situation. Further, the panelists’ conclusions may be revised without notice, with or without changes in industry information and legal authorities.
