Finance Leadership in a Complex System: Michael Nuñez, UMCEP

Transcript

CHAD MULVANY

On today’s episode of “Achieving Health,” I’ll be joined by special guest Michael Nuñez, District Chief Financial Officer of El Paso County Hospital District. He’ll share insights from his experience in financial leadership at a complex hospital system comprising a diverse set of entities. 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 Mulvany, director in the Healthcare practice at Forvis Mazars. Thank you for joining me.

For today’s episode, I’m excited to welcome a special guest, Michael Nuñez. Michael is District Chief Financial Officer of the El Paso County Hospital District, a health system that includes University Medical Center of El Paso and several other entities in the county.

Michael, thank you for joining me. I’m looking forward to our conversation.

MICHAEL NUÑEZ

Okay. Thank you for the invitation, Chad.

CHAD MULVANY

So, maybe I’ve known you for a number of years now, probably more than either of us would care to admit, but why don’t you tell me a little bit about yourself for our audience and how you came to healthcare?

MICHAEL NUÑEZ

Okay, well, so, I’ve been in healthcare since about 1985 upon graduation from college. I was in public accounting with the former big eight firm known as Arthur Andersen. That was my start in public accounting, and I was with them for about eight years or so. Then I moved on to a regional, to a local firm in Albuquerque.

And then about 2001, I moved on to, that’s when I became involved on the operations side of healthcare. I was initially the assistant CFO for Memorial Medical Center in Las Cruces, later became the Chief Financial Officer. And then in 2006, I got the opportunity to come to, I’ll call it El Paso County Hospital District, doing business as University Medical Center of El Paso, and I’ll talk about the district in terms of its structure here in just a few minutes, in 2006. And then I’ve been in this role since about 2010. Now, if you’re going to ask me, how did I get into healthcare, when you talk about a moment in time where it could have gone left or it could have gone right?

So, my first day in public accounting at Arthur Andersen, there’s two of us that had started that January of ‘85, and the other person, early in the morning, the person had gotten up and gone to the restroom. Then all of a sudden, an audit manager came into the conference room and he says, “Are you new?”

I go, “Yes, sir.”

He goes, “Why don’t you come with me?”

Well, he ended up being our healthcare audit manager and I guess I did very well. So, after that, I was pretty much on maybe 2/3 of his audits. And that’s how my introduction to healthcare came. So, one always wonders if I went to the restroom, what industry would I be in right now. So, that’s kind of a telling story in terms of how I got into healthcare.

CHAD MULVANY

And here we are after a continuing, successful, thriving career in making a huge difference in your community. And so, will you share a little bit about El Paso County Hospital District and its unique structure?

MICHAEL NUÑEZ

Yeah, absolutely. So, when I talk about the El Paso County Hospital District, it is made up of several entities. One we do currently have University Medical Center of El Paso, which I'll refer to as the adult hospital. And then we do have El Paso Health. It started out as a Medicaid managed care organization pre-, I think, around 2001.

But now, it’s starting to venture into Medicare Advantage. We also do have the El Paso Children’s Hospital. Now, that entity was formed about 2012 after a community request to have a separately licensed children’s hospital in El Paso. And then we also do have two foundations: the University of Medical Center of El Paso Foundation, that’s the fundraising arm for UMC El Paso, and then we have El Paso Children’s Hospital Foundation, that’s the fundraising arm for El Paso Children’s Hospital.

So, that is what otherwise known as the El Paso County Hospital District. And I, as the District Chief Financial Officer, oversee the entire system with each of the respective entities’ chief financial officers reporting to me. Now, one thing that I will mention that our medical partner, since we are a major teaching hospital, Texas Tech University, you know, here in El Paso, they are a significant partner for both UMC El Paso and also for El Paso Children’s. They do provide the majority of the physician coverage, although we also do have a lot of relationships with a lot of independent physicians here in El Paso.

CHAD MULVANY

Yeah, I think that’s great context for the audience. And I think that kind of brings us to the next question. And certainly as I was thinking about this conversation and thinking back to how I know you from my days at HFMA and the AMC CFO Council, you know, you sitting around that table had a lot of unique responsibilities relative to your peers because, as you’ve just shared, you know, safety net provider in your community, academic medical center, children's hospital, district hospital. So, how does that sort of shape your role and maybe make it a little different than even peers that might have been sitting around that AMC CFO table?

MICHAEL NUÑEZ

Yeah. So, I mean, I found even when I go to meetings in Austin with my, what I call my sister hospitals, although we’re not legally related. But when I think about the large public hospitals in Texas, when you think about Harris Health in Houston, Parkland in Dallas, JPS in Fort Worth, University Health in San Antonio, and us, me being over these roles gives me a different picture in terms of overseeing many of the entities where some of my peers are strictly maybe over the hospital function only and not necessarily even over their health plan if they do have a health plan.

Now, in our situation of the large public hospitals, no other public hospital has a separately licensed children’s hospital like we do. So, that’s another differentiation that I have that my current peers do not have.

CHAD MULVANY

Yeah, I think that’s important context to kind of shape the rest of the conversation, for folks to have that in the back of their minds. Kind of switching gears and kind of what we’re seeing in the market. I think, you know, when you think about Texas being a non-expansion state, certainly saw a significant uptake with the enhanced exchange subsidies. Curious as to what you’re seeing both for the hospitals within the district and then also in the community as well, in terms of changes in the uninsured or underinsured since January 1st?

MICHAEL NUÑEZ

Now, that is one item we are definitely keeping a pulse on monthly. Now, odd to say, when we’re looking at statewide numbers here in Texas, you know, we actually saw an uptick in Medicaid members across the board from December to January. But that was before the subsidies expired. Now we’re still waiting to see statewide data to see as to if those numbers are dropping, and if so, how much.

But in terms of right now, particularly more on the adult hospital, UMC, because on the children’s side, you know, they have about a 95% funded ratio, of which 65% of it is Medicaid. So they're, in my opinion, they’re probably going to be least impacted by the ACA subsidies being, you know, going away. But it’s more the UMC adult hospital. Now, at least until now, we just closed our quarter-end numbers, you know, for March.

Now we have not seen a material change in our underinsured or uninsured numbers yet. So, I mean, we do keep an eye on that. And, you know, quite honestly, one of my biggest fears, and kind of going back to the pandemic, is: are individuals electing to defer their healthcare because if they no longer have insurance coverage and then months down the road, does that mean we’re going to probably see them sicker and then possibly showing up in our E.R.?

So, that’s my biggest fear. We haven’t seen an impact yet, but is that coming down the road in the next three, four, five, six months if they have deferred their healthcare?

CHAD MULVANY

That’s, I mean, I think that’s a great point. So, as you say, kind of taking those lessons from the pandemic, what are you guys doing to prepare for that? Because I think you’re right. Eventually it will show up in your E.R. if it’s happening.

MICHAEL NUÑEZ

Yeah. So, one of two things. Now, when we look at our health plan, now we have seen in terms of the Medicaid membership, El Paso Health, they are the market leader in what’s called the state of Texas Access Reform program. That’s their adult Medicaid program. They have seen about a 5% decrease in their Medicaid membership since a year ago.

Now, from January 1, they’ve seen about a 2% decrease. But this decrease is being seen statewide as they still remain the market share leader in El Paso County. So, it’s not only just happening in El Paso, but it’s also we see that it’s happening statewide. So, currently now we’re we are keeping our tabs on that because obviously it’s that once we start seeing an uptick in our uninsured, we need to start preparing in terms of what, you know, what are we going to do.

And I think one of the questions down the road is, you know, is that shift going to increase uninsured, increase our or reduce our margins. And then at that point in time, we’re going to need to start thinking about, okay, now that transfer responsibility fiscally, it’s kind of shifting more to the local community in terms of, local community, are you willing to, like in our case since we are a public hospital, a county hospital, is that, you know, will the county be willing to increase the property tax rate so we continue to provide these services, or are we going to need to continue to start looking at services and start looking at do we need to reduce services?

Now obviously, that’s one of the last things we want to do, since our mission is to be here for the El Paso County for, you know, for the healthcare, for the county residents.

CHAD MULVANY

You know, kind of shifting gears a little bit, Texas’ Medicaid waiver expires in 2030. Can you say a little bit about if a replacement waiver isn’t approved that can provide a similar level of support for safety net systems like UMCEP? What does that mean to the organization?

MICHAEL NUÑEZ

Yeah, what that means for the organization is that it is a vital, you know, component of the of the hospital district revenue. It’s more on the adult hospital than it is on the on the children’s hospital. And I looked at our financial statements for last year and our, what I call our Medicaid supplemental revenue programs, which is a disproportionate share program, the uncompensated care program, graduate medical education, and others that are part of this Medicaid 1115 waiver program.

That makes about 8% of the of the district’s total revenues. Now, when you talk about the Medicaid waiver program being approved for 2030, that is true. But however, each year stands on its own. And what I mean by that is Texas Health and Human Services Commission needs to submit a blueprint annually to CMS for the approval for these programs, whether you were going to change their program, the funding level.

So, each year really stands on its own. In fact, right now there’s still one element, one of our directed-payment programs where we are six months into the state fiscal year that ends August 31st, and we still don’t have approval from CMS. So, that is a little nervous because we’re already halfway through a year. We are receiving funding for this particular directed-payment program, but as a chief financial officer, with no approval I’m reserving that on my balance sheet and not recognizing that as revenue until we do get approval, you know, from CMS.

So, each year is always, it seems that there’s always a different nuance in terms of getting approval for the state-directed payment programs from, you know, from CMS. But, going back to, you know, going back to the original question in terms of if there’s no waiver program after 2030, oh, that would completely change the dynamics, not only for UMC El Paso, but also statewide Texas.

CHAD MULVANY

And, you know, that’s, the delay in approval, certainly not an uncommon thing or a unique thing to Texas. When, you know, when I was in California, we had the same issue where it was CFOs calling every day going, is it approved yet? Can we book it? So, and I think that’s just, unfortunately, given how important state-directed payments have become as part of the financing component and the sustainability component.

MICHAEL NUÑEZ

You know, when you talk about that, when I do report to my finance committee and the board of directors, and I also have upcoming rating agency calls in terms of now, because I know the first question they’re going to be asking, what’s your forecast for 2026? I’ve got three of them. I’ve got current scenario, which is almost worst-case scenario.

And then I’ve got another likely in terms of what I think is going to come through. And then and then if all three programs are right now? Okay, best case scenario. So, I’m going to have a range. I mean I have a rating agency call here in about two weeks. And I’m going to, one of the first question they will ask: okay, what’s your what’s your forecast for, you know, for 2026. It’s going to be a very interesting call, I mean in terms of, you know, explaining to them, you know, we have, you know, one of the items, you know, when you came to our board of directors meeting last fall was about the disproportionate share funding.

Now, fortunately, yeah, the DSH cuts were delayed through September of 2027. That’s the good news. Now, the only thing we do not know yet is what’s the funding level for 2026. And we probably won’t know those numbers until maybe the June timeframe from Texas Health Insurance Services Commission. And then there’s a couple of other programs. There’s one program that was supposed to get started in October, it’s going to start in April, but it’s for the year, that’s very likely to happen.

But we still don’t know what that funding level is, albeit it’s a smaller amount, but it is still revenue. And then the one item that I was just talking to you about that there’s still no agreement on a preprint amendment between CMS and HHSC that were just, the whole state of Texas is waiting, you know, for that to happen so we can go ahead and start recognizing that as revenue.

So, it is very challenging when we come up to the dynamics every year, we all talk about, amongst ourselves with the healthcare CFOs, can we have a normal year? You know, we just don’t know what the new normal is anymore.

CHAD MULVANY

I was going to say, Michael, I mean, a normal year might take all the fun out of this.

MICHAEL NUÑEZ

It probably would, but I probably would sleep better at night.

CHAD MULVANY

I’m sure we all would. I mean, I know I absolutely would. You know, kind of to that point about, you know, we talked about the exchange subsidies, the potential for increased uninsured, the uncertainty around state-directed payments and other supplemental payments. I mean, just a bunch of headwinds out there. Can you give me a couple of examples of where the organization is focusing on performance improvement and long-term financial stability?

MICHAEL NUÑEZ

Absolutely. And as with any organization, yeah, you know, we’re always looking at operational efficiencies. And, you know, whether you’re looking at, you know, on the revenue side, how do we improve the revenue line, looking at the expense side, how do we how do we improve and and maintain cost controls? And oftentimes, at least in my opinion, it’s usually easier to look at the expense side first.

Okay, if we’re missing our margins, okay, where, you know, where can we reduce costs. And normally the largest items are going to be salaries and wages. And then our physician fees and also our, you know, some of our vendor contracts. But the other thing that we are really looking at right now is how do we improve the revenue side?

I mean, because there’s, you know, being in healthcare, there’s so many issues that you have to deal with. And so, we currently are going through what I’m calling a complete revenue cycle assessment, both at the adult hospital, UMC, and the children’s hospital and looking at at every component of the revenue cycle, looking at the front end, the middle, the back end.

And what I mean by that is, you know, we’re, you know, so we have people coming in and trying to help us get, do we truly understand the Two-Midnight Rule? You know, so we’re seeing that there’s some areas definitely for improvement on that. You know, some people in our hospital are saying well okay, that’s 48 hours.

Well, not necessarily 48 hours because that all depends upon when that person goes into your E.D. It could be 11:45 one night. So, you’re really looking at 24 hours and 15 minutes. It’s not like, oh, we have 48 hours to convert them to an inpatient. So that’s, you know, that’s the key thing.

We’re also looking at our, you know, at the physician documentation. As we are seeing, more so on the Medicare Advantage payers now. And we’ve seen this uptick probably over the last six months. You know, we’re not seeing denials from them. But what we are seeing is DRG downgrades. So, we’ve been looking at those and you know trying to determine okay, so we did get paid, but why was the DRG downgraded?

And, you know, and now kind of getting back into I don’t want to call it the games between the hospitals and the MCOs. But in essence, you know, sometimes that’s what it is. So, we’re trying to find ways to improve our physician documentation, you know, and we have a consultant in right now and literally going to the definition of the Medicare rules and looking at what’s called the four complex medical factors, you need to find a way to get that into your system.

So, we’re finding, so we’re working with our IT, with the EMR system in terms of trying to, how can we make it easier for the physician? One of the last things that you want to do is make a physician’s day even harder, because all they want to do is do patient care.

So, that’s another thing that, I mean, that we are looking at. We’re looking at also, particularly in the areas of some of our outpatient cases where they may be a little bit more acute, higher acuity. Depending upon the physician documentation as well, there is probably some opportunity that we’re finding, maybe about 25%, that we could actually classify those as inpatients rather than just a standard outpatient.

And then finally, we’re looking at our managed care contract language. Now oftentimes, you know, even here we go to renegotiations. We concentrate on the “rates, rates, rates, rates, rates.” But it’s always that managed care contract language that we are seeing. That is the quote unquote “gotchas” that if you look at over a year’s performance, if you’re expecting to get x-percentage increase, you know, we’re finding out, well, maybe we’re getting only 85, 90% of that simply because there’s some language in our managed care contract language, now that we’re trying to clarify, that’s working in our favor. So, that is very detailed, but that is one of the biggest things that we are looking at. Because at the end of the day, we simply want to get paid for the services we provide.

CHAD MULVANY

You know, I want to circle back to some of the opening conversation where you talked about having the health plan under the corporate umbrella. What opportunities does that create?

MICHAEL NUÑEZ

You know, ther’s a, let me tell you about that, because kind of even going back to when I started, so back in 2006 when I started working with the El Paso County Hospital District, the health plan was going through some financial difficulties at that time. And the chief executive officer at that time and the chief financial officer at that time, he goes, we’re going to send you out to the health plan and don’t come back until it’s fixed. Those are literally his words.

So, you know, and for me, you know, and at that time we were going through a management change. We hired a new chief executive officer, so between her and I over the next two years—now, I was spending about 80% of my time at the health plan, about 25% at the hospital.

But that enabled me to truly understand the managed care industry. And from that moment in time, particularly because—so, at that time, when I go back to the hospital district, it was literally just the two entities; you had UMC hospital, and then you had El Paso Health—and at that time, even though they were under the district umbrella, there was not a lot of working back and forth with each other. Literally two separate organizations.

So, when I started getting involved, and with a new CEO, then we really started working a lot more together in terms of, you know, we should be like, you know, this is a healthcare delivery system. You’ve got the provider, you got the insurance company arm, and then a couple of other things that the board, the El Paso County Hospital District Board, made a recommendation that, going forward, the Chief Executive Officer of UMC and the CFO of UMC, were now going to be on the board of El Paso Health, and that has been in place since 2006.

And quite honestly, that has really enabled because not only am I involved in terms of the monthly financials, but so is our CEO. So, we work very well on the hospital side and the managed care side. I was having a discussion with one of my peers at one of the other public hospitals here in Texas, they also have a community health plan such as we do.

But they don’t have the same structure we do. They don’t have representation of the hospital on the health plan board. And she found it very interesting and says, you know, we probably need that. And I said, I would really recommend it. And that, I think, has really helped our organization, particularly now when the El Paso Children’s Hospital came on board as well.

Now we’ve got two providers, we’ve got the insurance arm, and then when we have our clinics, you know, as we start talking about OB3, the Big Beautiful Bill Act and the Medicaid redeterminations that are going to be happening here starting January 1 of 2027, you know. So, between the hospitals, the clinics, and the health plan, we need to find ways to try to make sure that we don’t lose members administratively. So, that’s one of the benefits of now having everyone talking to each other and working with each other.

CHAD MULVANY

I think it’s, you’ve got that, you know, the board representation is fantastic, and I think that helps to keep the senior leadership aligned. But how, kind of, do you keep, at the operational level, both the plan and the delivery system aligned.

MICHAEL NUÑEZ

So, during like the busy healthcare season, normally during the winters, the health plan margins are slim, hospital margins are higher. Then, during the slower season, the hospital margins are lower and the health plan’s margins are higher. But in terms of, you know, in terms of working together, so, I mean, not that we don’t want to use a word steerage, but at least we can try to emphasize from the health plan members in terms of utilizing the healthcare system.

One perfect example is about two years ago, one of the Medicaid programs—it’s called Star Plus, and it’s on the adult side but it’s for your older Medicaid members—El Paso Health got into that program. Prior to that, when there was another insurance company, we were not, we, UMC hospital, were not getting a lot of steerage or patients coming from that health plan.

But now that it’s part of El Paso Health, we’ve seen an increase in terms of those services coming to UMC. So, that’s a perfect example of having the health plan, its membership, utilizing its hospital for their healthcare services. So, that’s been one of the things that has really helped out from, you know, in terms of quote unquote “trying to keep the money within the family.”

CHAD MULVANY

Right? Certainly. I’m sure that, you know, kind of the countercyclical nature of each business or, you know, one does well, one doesn’t, probably also helped tremendously during COVID, because that was certainly something that we saw.

MICHAEL NUÑEZ

Yes, absolutely. And, you know, and it goes back to one of those things about just, you know, diversification. So that, you know, when one entity’s not doing well, maybe another entity is doing better to help the district as a whole try to maintain its fiscal year goals, you know, financially.

CHAD MULVANY

Well, and kind of keeping along this thread of conversation, you know, some health systems have invested in health plans, some backed out, some are still considering. What advice would you give for a system that’s considering investing in a plan, be it, you know, joint venturing with an established product, or maybe getting their own paper and issuing their own insurance product?

MICHAEL NUÑEZ

It all goes back to, you know, what’s the overall strategy? So, you know, a perfect example with El Paso Health for, you know, for many years it emphasized only Medicaid members. But a couple of years ago now, the reason for that is that on the state side, you’re limited in terms of the amount of profits you can make off of a Medicaid plan after a certain percentage, like, say, after the first 3% margin of your premium revenues, anything after that, like 80% maintains with health plan, 20% goes back to the state.

And if you continue to go higher, it eventually goes where it’s like 80% goes, anything above that percentage, 80% goes to the state. You only keep 20%. So, you’re kind of capitated in terms of what the margin is on the Medicaid product. So, that’s why we made the decision to venture into Medicare on Medicare Advantage.

Now, kind of getting into a new plan, now obviously, you’ve got to know the marketplace because obviously on Medicare Advantage, very, very competitive. Much more so than on the Medicaid side. You got to know the competitors. You got to know the marketplace. You got to know what the potential member size is. And then, at the end of the day, doing strategic partnering, particularly in managing the medical claims.

Because typically, when you look at a premium revenue dollar to an insurance company, usually 85% of that goes to medical claims. And then the other maybe 10, 12% goes to your administrative costs. So, those are the key things particularly, you know, managing the medical claims. That’s the biggest risk that you have. So, that would be the advice that I would give anybody.

If you’re thinking about going into a health plan, you know, overall it does sound good, you’re diversifying. But in terms of the product, you got to understand the risk. And then, you know, if I were to go back and relook at maybe the previous five years before we made this decision, I would have said, you know, I need to have a little bit more cash reserves in place, because obviously when it’s a startup, you know, there’s some unanticipated costs that you didn’t figure that you need to make sure you have the cash reserves to withstand the early years of a new venture.

CHAD MULVANY

You know, shifting gears, I always like to close out with a couple of questions about lessons learned or advice for the industry for, you know, kind of thinking about this conversation for other finance leaders working in safety net or academic health systems. But what lessons have you learned over the course of your career that’s really helped you navigate the complexity of an organization like yours?

MICHAEL NUÑEZ

You know, in terms of going back, I mean, as with any situation, you know, we all learn from our mistakes. And, you know, I’ve made I’ve made a few during my career. And it’s like, okay, so one is identifying it, learning from it. But then also, and I tell this to my team, I mean, all organizations, whether it’s each entity or each close is, you know, if there’s an issue that comes up, communicate that immediately.

You know, I always have a motto of, you know, share bad news faster than you share good news. Because if you do that, then you usually have more time to react. As opposed to, well, you know, can I hide it under the rug for about a month or two because one, it normally gets bigger and then you have less time to react to it.

So, that’s always the one that I always tell people just, you know, don’t be afraid. And going back to when I started out at the health plan, our chief executive officers that also came in, she had the same motto in terms of I want to know bad news, you know, sooner than I want the good news, just simply because we have time to react to that.

The other thing that I would say is. surround yourself—I mean, you know, this is across any organization—surround yourself with good people, good talent. People that you know that you can trust. And if you don’t have, now we’re a smaller public hospital when you compare us to the other large publics; Dallas, San Antonio, Houston, etc.

So, sometimes we don’t have the bench strength that those other organizations do. So, we need to find outside partners that you can trust, that are dependable, that know their stuff, particularly here in Texas with all the Medicaid supplemental programs. 20 years ago, it used to be just disproportionate share and something else. But now, with all the directed-payment programs that the state of Texas has, it has become fairly complex.

So, you need to partner with people that know that, understand that. And then, I also found just networking with other organizations. You know, I often call my friends in San Antonio, my friends in in Dallas. We often share the same issues just at a different level. I mean, they are sometimes three, four times our size, but they have the same issue as we do and also become, you know, become aware.

I mean, I’ve learned so much through HFMA, Healthcare Financial Management Association, America’s Essential Hospitals, and also like Teaching Hospitals of Texas, Texas Hospital Association. Because at the end of the day, I mean, you know, they always say knowledge is power, but the more you know, the more you understand. So, those are some of the, the lessons, you know, which, particularly—and I think one of the next questions we’re going to talk about is going to be succession planning—but that’s very important for people to recognize it’s not only just the, you know, on the finance side, the debits and credits and the financial reports, financial statements.

But you need to know the industry. What’s the dark clouds coming down the road, what’s happening legislatively in Washington. And in my case, what’s happening at the state level in Austin. Because you have to stay on top of that.

CHAD MULVANY

You know, I like the pieces of advice and, you know, bad news doesn’t age well, good news probably ages a heck of a lot better than bad news. And then, I do like the point about just sort of making sure that you’re networking and talking to others, because one, I’ve yet to find anybody that’s got the market on good ideas cornered, right?

And just understanding how other people do things and how they think about things. Just over the course of my career, and kind of similar to you, I’ve always sort of had an attitude of, you know, if somebody’s willing to have a conversation with me, I’ll have a cup of coffee, share what I know, listen to what they’re doing, and see what I can take from it. And I think it served me well. I know it served you well.

MICHAEL NUÑEZ

Yes, absolutely.

CHAD MULVANY

And then, that piece on succession planning, I mean, just about every conversation I have, my colleagues have, with senior executives and folks in the leadership suite, it’s top of mind. So, what are your thoughts on the best ways to prepare the next generation of talent?

MICHAEL NUÑEZ

You know, this is a discussion we have a lot here at UMC or the El Paso County Hospital District in terms of, you know, the next round of leadership. Because, I mean, when you look around at our senior leadership, we’re all kind of like I mean, and the board has realized this and said, you’re all within probably five to seven or eight years of each other so, you know, here in the next, you know, ten years, there possibly could be significant turnover.

So, you know, so what are we doing about that? So, I mean, definitely we have all, as a chief, whether chief financial officer, chief nursing officer, chief information officer, is that we’ve all been tasked with in terms of identifying who that future leader is going to be, and in terms of starting teaching, mentoring, educating. If we go to seminars or to conferences, you know, bring them along with you so that one, they can start knowing what’s going on.

But then also starting to—we talked about networking. Who are your fellow peers? And in case you have a question, it’s easier to pick up the phone and call somebody if you know that person, you’ve met them at a conference in Austin or a conference in Louisiana or, you know, whatever the case may be, that because you already know that person, you know that person by face, you can call them up.

I talked about, you know, encouraging people. Yeah, you have your day-to-day work, but it’s also an investment in your career, an investment in your future. You got to stay current on federal issues, legislative issues, work with your peers. I work well with our government relations team. Because what’s happening, I mean, they’re the ones that are telling you, you know, what is going on in Washington.

You know, then, well, then I have to start assessing what’s the financial impact? And then also just be involved with your trade associations, your state hospital association, as I mentioned HFMA, I think that’s how you and I met years ago, etc., and just network. And then last thing is, don’t be afraid to ask questions. Do not be afraid to ask questions.

CHAD MULVANY

Yeah, I think that’s all great advice. And just particularly in terms of, I like the thinking around making sure that as you’re identifying new leaders, making sure that they’re getting out and sort of taking advantage of the same networking opportunities and encouraging them to grow their network as well. As we start to wrap up, what’s one accomplishment during your time at El Paso County Hospital District that you’re especially proud of?

MICHAEL NUÑEZ

So, when we’re talking about the El Paso County Hospital District, and this is one of the things that we as management are proud of, our board of managers are proud of. So, back in 2006, when I started in terms of when you look at the at the community service, our funded payer mix, we had about 52% funded, about 48% unfunded.

So, 20-plus years later, because of the investments we have made in the plant expansion—we’ve had like three bond issues since 2006—but also with our partnership with our medical school, the recruitment of specialists: neurosurgeons, neurology, orthopedics, cardiology, etc. Our payer mix combined when I combined UMC and now El Paso Children’s, we’re about 80% funded.

So, that has grown almost what, 28% over 20 years. And that just goes to show in terms of one, the level of service we now provide to the community, but then also two, how the community has responded and have entrusted their healthcare services to come to the county hospital, now, University Medical Center. Previously was known as Thomason General Hospital, but now it’s the University Medical Center of El Paso.

So, that’s one thing that I wanted to share in terms of the things that we have done over the last 20, 25-plus years just to advance healthcare in El Paso County since, you know, since that is our mission.

CHAD MULVANY

I think that’s also a great example of, you know, 20 years ago there was an identified gap in the payer mix, and there was also a need in the community and you were able to marry those two things together and with a very, I’m assuming it was a very detailed and also long-term plan to sort of put the capabilities in place, align with the physicians, acquire the physicians to sort of start that ramp to build that revenue stream that also met the community’s need. So, I think it’s a fantastic example of just how you were able to align growth with needs in the market and also the organization’s financial needs.

MICHAEL NUÑEZ

And that was validated by the county residents two bond bills, or two years ago when we went to we just went out for a $400 million bond issue. It went out to the public and we were, you know, we were ecstatic when early results were coming in. And it was almost approved by 67%.

You know, normally a bond issue in any community, if you get to 55%, that’s considered a significant win. But it was trust that the county residents, you know have put in us that they that they entrusted. Yes, we want to, and primarily the main thing was we were going to increase critical care beds, intensive care beds, we’re going to build a burn unit, because right now we don’t have a full-fledged burn unit. We’re going to build a cancer center program with our medical school partner, Texas Tech.

So, those are, you know, so those are key items. But it was good to hear that the county residents entrusted us and said yes to that. Now the other part now is now we need to deliver and keep the trust of the county residents.

CHAD MULVANY

Michael, as always, great talking with you. I mean, we could probably sit here for another two hours and do this. I’ve enjoyed it.

MICHAEL NUÑEZ

Probably so. Yes, we could, Thank you, Chad.

CHAD MULVANY

Thank you. 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. I’ll be back next Wednesday, May 13, with the next round of “Washington Watch” updates. Until then, here’s wishing good health for you and the communities you serve.

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