Rae Woods (00:02):
From Advisory Board, we are bringing you a live Radio Advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae.

(00:14):
This episode is special because, as I just said, we recorded it live at the Advisory Board Summit in Chicago this fall. And when I thought about the kind of conversation that I wanted to bring to 300-ish healthcare leaders in person, and of course all of you at home, I found myself realizing that I spend a lot of time on this podcast talking about the challenges of healthcare, talking about all the ways that our jobs are getting harder, that our margins are eroding, that the assumptions that we had about how our business operates. Frankly, they're all in question.

(00:51):
But there's one organization who, at least on paper, might have everything going against them. They serve both urban and rural populations. A quarter of their state's population is over the age of 65 and on Medicare. Add to that, about a third of their population is on Medicaid. There have been rural closures in their state, and they're also an academic institution that's now facing cuts to research funding that they certainly didn't plan for at the start of this year.

(01:23):
See what I mean? You might be getting nervous about how this organization is going to fare in 2026 and beyond, but as we get into this conversation, you might find yourselves actually envious of the position that they're in, and it's because of the work that they started a couple of years ago and the efforts they're continuing today to not just shore up their core business but to actually grow.

(01:51):
Here's my conversation with Kelly Elkins, Chief Operating Officer of MaineHealth, a $4 billion, 13-hospital academic health system serving patients in Maine and New Hampshire.

(02:05):
Welcome to Radio Advisory.

Kelly Elkins (02:06):
Well, thanks for having me.

Rae Woods (02:08):
Level set with me for a second. If you were to describe the state of MaineHealth's business in Q4 2025, what is the state of your business?

Kelly Elkins (02:19):
I would say from a top-line revenue, a gross revenue utilization, maxed out. Hospital beds are full. We have long waiting lists for elective surgeries, imaging. We have patients still seeking primary care access, so the volume and activity is there. It's very robust. On the net side, we have some challenges, of course, with the evolving payer mix, 25% of our population is over the age of 65. Right now, close to 65, 70% of our Medicare patient base is enrolled in Medicare Advantage plans. So you can imagine that obviously makes contractuals fun.

Rae Woods (03:02):
Administrative burden a little high.

Kelly Elkins (03:04):
A little high. But I would say we are focusing on optimizing our overall performance, and so we've been able, at this point, to really strike a balance of the expense platform, support the organization, and support care. We still have opportunity, like everyone does, but even with those contractuals, we're still able to create a margin. And so that is something that we keep top of mind because our philosophy is we cannot fail. We take care of so many of our communities in Maine and the portion of New Hampshire we cover and we can't let what's happening around us take us off course.

Rae Woods (03:48):
Yeah. Your confidence is actually really comforting for me to hear, and it sounds to me that from a business perspective, things are actually stable, which continues to surprise me. Please allow me to just push a little bit here because if I think about my conversations with health leaders out in the market, they are staring down the barrel of pretty significant cuts, pretty significant changes, all of which are eroding their margin, but it's really important that we understand those changes in the context of individual organizations.

(04:21):
So give me the context for MaineHealth. Tell me if it's a big deal, a little deal, or no deal. I'm going to go through a couple other headwinds. Tariffs, big deal, little deal, no deal?

Kelly Elkins (04:32):
It's not a no-deal. We know there'll be impact for tariffs. It's not a big deal for us. So to me, I would rate it somewhere little to moderate, and here's why.

(04:42):
A couple of years ago, well in advance of even knowing what administration would be in place and what rules may come out around tariffs, it was time for us to do the right business hygiene and look at our GPO and make sure we had the right partner. And we made a strategic decision to move away from a partner we had used for 20 years-

Rae Woods (05:03):
Wow.

Kelly Elkins (05:03):
... to make a move to another organization, and that was the right move. Not only did they get us an immediate financial improvement in our spend on the supply chain side, but the way they negotiate their contracts, we have a little bit more certainty. This we'll be much more able to plan for and know where we're going to get hit.

(05:22):
So I'd say little to moderate, just you never know what's going to happen on the negotiation table.

Rae Woods (05:28):
MaineHealth is also an academic institution. Big deal, little deal, or no deal, research funding cuts?

Kelly Elkins (05:35):
I would classify that in the big deal category, and here's why. A $4-to-$5 billion health system, we have our own institute of research, and that's something we're very proud of and contribute greatly, I think, to advancing science and education, particularly in northern New England. But a big portion of the work we're doing there is funded through NIH-funded studies.

(06:01):
We've had some very minimal impact to date, so it's hard to gauge if we're going to get hit with any big major funding grants pulled from us, but it's a concern. And if we don't balance how we bring revenue into that institute of research with maybe partnering more with industry and others to bring in some of that funding, it could be a big deal.

(06:27):
The other element outside of that agenda is we have an extremely large community health improvement office. In the states of Maine, New Hampshire, this is pretty common in northern New England, most states have a pretty robust public health service that's either funded by state or local communities, municipalities, in our states, that's not true.

Rae Woods (06:51):
Wow.

Kelly Elkins (06:51):
So we essentially fund a lot of the public health work and actions and we use a lot of federal grants to help fund some of that great work. I think that's also a big deal and risk point for us. We supplement that with some operational funding to match it, but that would put then the public health situation for our communities, it's a double whammy if we see any major funds pulled back beyond what we have today.

Rae Woods (07:19):
And you're doing a good job of naming the cuts in the here and now and what it will mean in the future. I want to ask you one more, which is Medicaid cuts. Maine is the oldest population in the country, and about a third of your population is on Medicaid. If we're staring down the barrel of pretty significant Medicaid cuts through the One Big Beautiful Bill Act, what is that going to mean for MaineHealth, big deal, little deal?

Kelly Elkins (07:42):
It is a big deal. For us, we are anticipating between the work requirement changes and the shifts in coverage for the immigrant population, we have a fairly large immigrant population in the state that are covered today by Medicaid, there's probably going to be about 40,000 individuals who lose coverage because of those two programs.

Rae Woods (08:04):
Wow.

Kelly Elkins (08:04):
For us as an organization, that's about a $50 million annual impact in terms of revenue that we received today that wouldn't be coming in.

Rae Woods (08:13):
And that's just the direct impact. That's also the implication of, all right, these folks lose insurance. They're probably less likely to seek care. That means they're going to become more acute, they're going to become sicker. So when they do show up at MaineHealth's doors, they're going to be more expensive.

Kelly Elkins (08:26):
Right, that is the scenario, and we even saw some of that scenario play out in COVID, even when people had coverage, right?

Rae Woods (08:32):
Mm-hmm.

Kelly Elkins (08:33):
The other element too is with the bill and the change in subsidies for the health exchanges, that 40,000 are not going to be able to now go buy something on the exchange. There's estimating around five to 10,000 individuals who will probably drop their exchange coverage because of those subsidies. So now we're looking at closer to 50,000 folks in the state of Maine alone who likely will have no coverage source.

(09:01):
And so it's that clinical challenge, that could be a huge deal, but it's also we've got to find ways to offset that revenue in other places. And that makes it really tough when the way you offset that from a pure payer source is commercial or employers who fund their own healthcare, which doesn't feel great either, right?

Rae Woods (09:21):
Yeah.

Kelly Elkins (09:22):
That you're asking for more to offset those losses. So it's a big deal, but we're not being crippled by the thought of that forward.

Rae Woods (09:30):
I would be crippled by the thought of this. I want to be clear. When I first heard about your story and all of the headwinds, I mean, truly, it feels like every single headwind that an organization could face, MaineHealth is facing and to the nth degree, and I want to come back to the fact that you described your business state as one of relative stability, and that has to be because of the work that you've done.

(09:58):
So tell me, reveal for us, what is the survival agenda for MaineHealth?

Kelly Elkins (10:04):
Well, one, it's not a survival agenda. If it was the survival agenda, I probably shouldn't be on your podcast. We have a growth agenda, focus on growth and innovation as well as optimization because that's what it's going to take to keep the business stable and sustainable, not just for the next three to four years. We have to think five, 10, 15, 30 years beyond. And so for us, it's a combination of growth, innovation, and optimization.

Rae Woods (10:36):
What is that agenda then? I mean, that's a tall order. Get specific for me. What's on the to-do list?

Kelly Elkins (10:42):
Sure. I'll start with the fun stuff, which is growth. That's what you hope that you have the opportunity to play in. And we're thinking about growth really in three different lanes.

(10:54):
The first lane is our core business, and is their ability to still grow in the core business? And when I say, "Core business," that's our hospitals, it's our hospital-based physician clinics and outpatient services. You heard me say we still have huge demands for care. So the business is out there and if we can optimize and maximize how we operate those sites of care, we can create just inherent capacity to allow us to still realize growth in those core business areas, but we can't just focus there.

(11:32):
The second lane is in the emerging business line perspective. In my opinion, it's really the emerging core. I think it's where five, 10 years from now, that probably becomes our core business.

Rae Woods (11:44):
So if the core was the hospital business, what's the emerging core?

Kelly Elkins (11:47):
It's the non-hospital. It's outside of the four walls of the hospital. For us, it's going to be really strategic investment in true freestanding ambulatory retail pricing strategy footprint. So ASCs, retail urgent cares, infusion, looking at how we leverage our virtual care, our care-at-home opportunities, and really understanding where care is delivered, where care needs to be delivered. And the more we can put that care in lower-cost setting, even though the reimbursement will likely be less, we believe we'll still have ability to have a fairly similar margin because we're also right-sizing the cost profile.

(12:32):
And then the third lane is what I call the adjacent business lines. We have an institute of research, we have an innovation institute. Those are both platforms, take aside grant funding to support those, but where you really truly can partner with other industry to enhance revenue streams, we can spin off ideas and perhaps help launch and trial some new business opportunities with our innovation institute.

(13:00):
So for us, it's focusing in on what are those other opportunities to diversify where our earnings and revenues come from so that while we are doing that dance between hospital base, non-hospital base, we still have this other avenue of bringing in some additional revenue and hopefully contributing to our margin stability.

Rae Woods (13:25):
Yeah. Before I talk about how you're executing on this, I actually want to talk about when this all started. You're actually relatively new to the MaineHealth organization, and you saw the writing on the wall, not waiting for immense policy shifts to make some of these changes. When did this work start?

Kelly Elkins (13:44):
So I arrived at MaineHealth in January of 2022 and-

Rae Woods (13:49):
Another difficult time in healthcare, okay.

Kelly Elkins (13:51):
Yeah. And for the state, particularly the state of Maine and New Hampshire, that was the peak of COVID at that time. They were not hit as hard in the earlier couple of years of the pandemic, but I came in. We essentially were operating as a federation of institutions under the umbrella of MaineHealth, but we hadn't done all the work we needed to really operate as an integrated health system. And out of the gate, there's immediate opportunity there. We're not optimizing our assets, our resources. So the work began then to say, "We have to fundamentally change how we are organized as an organization, how we operate, and start taking advantage of optimizing the business."

(14:34):
It was also a time in which when I came in, it was in the red and that was the first-

Rae Woods (14:39):
And you wouldn't be the only organization.

Kelly Elkins (14:40):
No.

Rae Woods (14:41):
I mean, 2022, this was the low point for most hospital and health system margin coming out of the pandemic.

Kelly Elkins (14:46):
Yeah, yeah. And we were a health system that really hadn't happened to. Prior to the pandemic, had always been profitable, had maintained a really nice margin.

(14:56):
And so I've had the privilege of working in other health systems that had to constantly deal with optimization and making sure that there was a margin to re-contribute back to the not-for-profit mission of the organization. And so myself and several other leaders, including our CEO, came in and said, "We got to focus now on how we're going to get back."

(15:22):
Now, when I tell you what our three-year margin target goal is, you'll be like, "Well, that's not that impressive," but our goal was by 2027 to get to a 3% operating margin.

Rae Woods (15:33):
I think that sounds great. I think folks in this room would be happy with a 3% operating margin.

Kelly Elkins (15:38):
And so to me, we just got back to the basics, right?

Rae Woods (15:41):
Yep.

Kelly Elkins (15:41):
We brought in rigor around operations, creating accountability, going after the things folks can control. That was really important. And then doing strategic things, like saying, "We need a new GPO partner. We need to really investigate and assess our corporate shared services. Are they delivering the value for our system? And if not, how do we make tweaks and changes to that?"

(16:05):
So we've been doing that work, and in a way, our laser focus has been on getting us back to what we think is the optimal margin for us to be able to reinvest in our organization, our care team, our communities. So that's been the burning platform, and along the way, yeah, the other external forces or headwinds come at you.

Rae Woods (16:25):
You get hit with more things. And to be clear, the real impacts of some of these policy changes are just beginning to start to hit organizations. And so I appreciate how clear-eyed you are about the reality and about the road ahead and the work it is going to take, even as some of the headwinds get stronger, you get added new headwinds that you weren't expecting.

(16:45):
So I want to talk about each of your growth goals, and I want to start with shoring up the core business. Every organization that I talk to now in the fall of 2025 is saying, "I want to maximize my cash on hand right now. Before things start getting worse, we need more money coming in the door and we need to minimize our expenses as much as possible. Maybe some hiring freezes are happening, we're minimizing our expenses, but we want volume. Not just volume, we want the high-margin volume."

(17:16):
What makes me really worried about that is that this is one of the rare moments in healthcare where it is truly a zero-sum game. There are only so many volumes to go around. There are only so many of the lucrative margins to go around, volumes to go around. And you, again, if I think about the challenges of MaineHealth, have the problem of competing not just within Maine for those volumes, but also with the greater New England area. I mean, Portland, Maine is not that far from Boston, Massachusetts.

(17:42):
So how are you thinking about capturing those high-margin volumes in the near term as part this shoring up your core business?

Kelly Elkins (17:51):
Yeah. Well, again, it's nothing revolutionary. It's how do we ensure that our advanced tertiary service lines are functioning at their highest potential? How are we continuing to recruit and retain the top talent of physicians in that space so that we can not create an element where folks have to bypass us because we don't offer that higher level of care and have no other choice but to leave the state and perhaps go to Boston, but it's also about looking at our capacity. Our biggest limitation today at Maine Medical Center, which is our tertiary academic flagship facility, it's an 800-bed facility. We rent at 100% capacity.

Rae Woods (18:36):
Yeah, the problem is not demand. The problem is do you have the beds? Do you have the staff? Exactly. It's the capacity.

Kelly Elkins (18:42):
How we're going to get the growth is we have to improve our capacity management, which is throughput, flow. It's how we deal with the post-acute network and the challenges we have in that space. And it's really doing all the work that you know have to do. There's nothing new there.

Rae Woods (18:59):
That's right.

Kelly Elkins (19:00):
We all know the things you have to do, but it's approaching it with intentionality. And for us, that was a space where we said, "We could use a partner to help us do this work because it's going to take many hands and we can't take our eye off of our long-term vision and our growth goals, but we also have to make this a priority." And so making sure that we had the support we needed to advance that capacity and optimization agenda was really important.

Rae Woods (19:30):
Especially because you're not trying to tackle one source of operational efficiency. I think I heard you say three: length of stay, post-acute management-

Kelly Elkins (19:41):
Well, actually it's six. Six.

Rae Woods (19:43):
So name them.

Kelly Elkins (19:45):
So throughput, which is your bed capacity, length of stay. Perioperative throughput. Anybody ever had to work on that? I'm sure you all work on maximizing your OR capacity. Our emergency department, it's the front door, so how do we make that more efficient? Post-acute, we have a huge post-acute issue in terms of just availability of different levels of care. So we have specific work on how we bolster our own strategy and partner with others.

(20:13):
The other space is because we are the only Level I Trauma, the only AMC, the only tertiary referral center in the state of Maine, particularly, we have to make sure that we are actually able to accept those tertiary-level transfers. So we have a whole initiative around our access center and how we don't just utilize that to get folks into the AMC, but how do we use that across our system to put the right patient in the right bed in the right community?

(20:45):
And then the last piece is a whole workstream around care variation reduction. A huge opportunity. So those are the six, oh, just the six things that we're working on.

Rae Woods (20:55):
Just the six things. I mean, this is a huge, full-court press that you are doing. At what point did you realize, "We need some help. We can't do all six of these at once alone"?

Kelly Elkins (21:08):
Yeah. I would say it was probably about three, three and a half years ago. We had decided to engage because I had had past experience with Optum Advisory and some consulting engagements, had brought that team in just to focus at Maine Medical Center to look just at capacity and some perioperative opportunity. But as we were there, we started talking about, "If we just tackle this as a six-month engagement or a six-month mindset, this won't stick."

Rae Woods (21:41):
No.

Kelly Elkins (21:42):
"We will get some great ideas, we'll put stuff in place, we'll see a little bit of improvement. And then when folks walk away and leave and we don't have the rigor and focus, it won't sustain and then we'll be right back in the cycle."

(21:55):
So we started talking about to really affect sustainable change, because that's what we're aiming for here is change that will stick, and change how we operate as an organization, you can't do that in six months or even 12 months. So we said, "It's probably a multi-year engagement. It's got to be a system-wide engagement with each year fanning out to other regions and communities, and it has to be our work. We must own it." The team hears me say this a lot, "This is our work to do. This is a MaineHealth-led project."

(22:33):
But what it allowed us to do in the moment was to access experts in the field, other resources, folks who could come in and, at the elbow, work with our care teams and our leaders to help hardwire process, put those processes in place, and help us create that accountability journey so that when the four years is done and we part ways, it'll be sad because we've made great friends and everybody's working together well, but we won't slip. We will sustain the gains that we've made.

Rae Woods (24:04):
I appreciate a few things that you've said. I really appreciate that you've said, "This is MaineHealth-led, supported by partners," and I appreciate that you know that this needs to be a sustainable change. In fact, I would actually call this a new definition for growth, growth that starts with getting better before you think about getting bigger. It is still important to think about those new lines of revenue, how you are expanding, but it starts with getting better. That's what smart growth really looks like.

(24:34):
You're a few years into the journey here. How's it going?

Kelly Elkins (24:38):
Yeah, I would say it's starting to work. Year one, we had a lot of lessons learned. We saw progress not as fast as I would have liked to seen progress because, as a COO, I'm pretty impatient, but some of that was understanding that the biggest barrier to this work being successful is people and culture, right?

Rae Woods (25:04):
Yes.

Kelly Elkins (25:04):
If you don't have the right cultural mindset and mindset shift to embrace the work, it's going to be harder to get there.

(25:11):
So I would say the first year, we made some progress, we started getting people to really understand and buy in that this can work, this will work. Now that we're in year two, we just had a meeting earlier this week. We have a couple of at-risk metrics that we share with our partner in this journey, and there's four of them for this year, and three of them are already close to or achieving the year-end target we set for them.

Rae Woods (25:40):
Amazing.

Kelly Elkins (25:40):
So that work is really accelerating because the rigor is taking hold and we're starting to see more of that cultural buy-in and ownership of the work.

(25:50):
Still work to go. And the targets we set, I would tell you, are still not where we want to end up, but we do a year-over-year approach. The area that is still our biggest opportunity is length of stay and excess days, but we're starting to see movement there. I don't know how it is for others, so I'll share a little bit of dirty laundry.

Rae Woods (26:10):
Let's do it.

Kelly Elkins (26:10):
Because of our post-acute challenges, particularly at our tertiary center, we historically have had a very high census of long-stay patients. And when you think, "Long-stay patients," you're like, "oh, greater than 10 days, greater than 20." Back in March or April, we had, I think it was 58 patients with a length of stay greater than 100 days. And most of those patients were like 200, 300 days.

Rae Woods (26:39):
Oh my goodness.

Kelly Elkins (26:40):
This past week, we had eight patients in that category.

Rae Woods (26:45):
Wait, wait, wait. That's a change from April to October?

Kelly Elkins (26:47):
Yes, yeah.

Rae Woods (26:48):
That's a big deal.

Kelly Elkins (26:50):
It is a big deal, yeah. And how that happened was we got really intentional with our post-acute strategy, and we got intentional to say, "We have to have dedicated leadership that owns the post-acute realm." Just like I have hospital presidents, just like we have a medical group, you have to have someone who really owns and lives and breathes what happens in that post-acute continuum.

Rae Woods (27:13):
Even though you don't own the post-acute centers?

Kelly Elkins (27:15):
We own some, but not all. And we decided we could never own enough to solve the problem. You got to have a partnership and some owned assets to make it work. But we brought in some experts from the partner side to help us leapfrog and get started, and then we landed some really talented individuals who, in a very few short months, started activating on the strategy. And we're starting to see those extreme length-of-stay patients obviously contract pretty rapidly. Now, it's the hard work. It's the 10-plus-day length-of-stay patients, right?

Rae Woods (27:55):
Yep.

Kelly Elkins (27:55):
And that's where momentum is building, not quite where we need it to be, but we're feeling much better that that ball's going to roll more and more this year and that we'll ultimately hit where we want to land in that space.

Rae Woods (28:09):
You brought up culture and the impact of your staff, your clinicians, and I want to go there for a moment because I'm imagining a world in which I'm a long-time employee of MaineHealth. New CEO comes in, new COO comes in, all of a sudden all these consultants come in and you want me to work a lot harder and have all of this rigor added to my operations. And I can imagine that that could go south very quickly, especially when all these folks are non-Mainers.

(28:39):
Did any of that happen?

Kelly Elkins (28:41):
I mean, I'm not going to tell you that it didn't happen and may not still exist a little bit, but we were very intentional of trying to help people understand the why we were doing the work, the fact that it was ours to own, these are our problems to solve and sometimes when you need to solve big problems, you need some helping hands. And we wanted to bring in someone that could help leverage expertise.

(29:06):
And I will tell you that was one of the ways that really won over some of our toughest critics of the work. I remember in our very first kickoff retreat, one of our physicians who we had asked... I'll say this is another key thing. For each of those six work streams, we have a dyad that leads those work streams on the MaineHealth side. We have a physician leader and more of a business operational or clinical leader. They own those work streams, they run them, and they use the partner resources to help them with that. But one of the physicians we had tapped started the day off by saying, "Kelly, I've been here over 20 years. I've done a lot of these things. They're never going to work. We're wasting our time. They can't teach us anything new."

Rae Woods (29:51):
I've been in a room with a few of those naysayers.

Kelly Elkins (29:53):
Yeah. So skeptical, right? By the end of the day one, he said, "This is the best retreat I've ever been to in my career," and it was the legitimacy of the experts that our partner brought to the table. It was clinicians, it was physicians advising our physicians, and physicians they could respect. They worked at similar institutions, they had the same kind of background, and that allowed them to have confidence in that this isn't just consultant speak; it's folks who have been in the field and did this work as part of their careers and now their next phase of their career is helping others with what they'd experienced.

(30:37):
So that has been important, and it's really been about, at the leadership level, our senior-most leaders have to own it, they have to walk the talk. And what we're working on now each year as it rolls forward is we have to take that accountability culture closest to where the patient is, and so that's the journey.

Rae Woods (30:58):
But the journey doesn't stop there. And I actually think this is really important because as health leaders are thinking about the time that they have now, the short period of time they have before some of these big cuts start hitting, a lot of them are focused on operational excellence. And my message is always, "Yes, you do need to do this work," but if all you do is focus on operations, that may not be enough to face the level of margin erosion that we are seeing. And that's why you have two other pillars that you're focused on when it comes to your growth agenda.

(31:32):
So have you started expanding into the new core, as you described it?

Kelly Elkins (31:38):
We are almost launched, so we are getting ready to open our first retail-based urgent care setting. So really excited that'll happen this fall, followed shortly behind with an orthopedic specialty ASC. So really getting ready to launch those. Those, we keep viewing these as creating the model that can be replicated that would allow us in the future to say, "We've got it down. We know how to do this. Now let's go to the next geography."

Rae Woods (32:10):
How did you know that now was the right time, fall of 2025?

Kelly Elkins (32:13):
I would tell you there's never a good time to do these things. And for us, again, it was about being proactive. Fortunate or unfortunate, I've been in several other major markets in this country where the payers drove you to these things years ago, forcing-

Rae Woods (32:32):
Getting an ambulatory infrastructure in 2025 is not something that-

Kelly Elkins (32:35):
It's not a novel concept.

Rae Woods (32:37):
Correct.

Kelly Elkins (32:37):
But novel where we are because we aren't yet getting that pressure.

Rae Woods (32:42):
Wait, so you're actually saying that in your market, you're a bit ahead of the curve on this?

Kelly Elkins (32:46):
Yes. So for us, it was saying, "Let's not wait until our commercial payers force our hands and we're not ready to react, and let's not wait for site-neutral payments to become a reality because they will be a reality."

Rae Woods (33:01):
Yes, they will.

Kelly Elkins (33:01):
And so that's the conversation we had with our boards, which is, "Yeah, we're taking a risk, but we don't want to be left behind and we want to be in control and be proactive and be ready and have a proven model that actually hopefully would allow us to adapt to those changes when they do."

Rae Woods (33:19):
But I appreciate that you're naming that there is risk here, and we find that there is real tension between shoring up the traditional hospital-based business and expanding into new avenues.

(33:30):
I want to be blunt for a moment. How are you affording this? I mean, again, I just keep coming back to the headwinds that you're facing. How are you able to say, "All right, now is the time. We are doing this"?

Kelly Elkins (33:44):
Yeah. Well, one, we would always love a super rich balance sheet.

Rae Woods (33:49):
I though you were going to say, "A super rich donor," and head out, looking to the audience.

Kelly Elkins (33:52):
Well, don't discount philanthropy, right?

Rae Woods (33:54):
Absolutely not.

Kelly Elkins (33:54):
Philanthropy is a huge piece of a growth agenda, and we, in the past year, have reoriented our development office to really be a system function. So we can be much more-

Rae Woods (34:04):
You would agree.

Kelly Elkins (34:05):
... strategically oriented in how we use those funds. But I think we do a nice job of balancing the investment needed to maintain the existing book of business, but saying, "We're going to be much more focused on the strategic capital that we need to spend," and with limited capital funds, you never have enough.

Rae Woods (34:24):
But it's an investment to know, "Here is where MaineHealth is going in the future, and if we don't make this investment now," especially when you have this window of opportunity again, "let's make the smart investments now so that we don't just exist as a hospital system that happens to have a plaque on the wall. We're still meeting the mission of MaineHealth."

Kelly Elkins (34:43):
Exactly, exactly.

Rae Woods (34:45):
Your last bucket here, adjacent services, is that something that's happening now or is that a future step?

Kelly Elkins (34:51):
I think that's probably more of a future step for us. We talked a bit about our institute of research. We have a new leader over that, coincidentally came to us from the NIH, so is very aware of what's at risk, but also is really excited about how do we balance out that portfolio so we aren't always going to be just dependent on NIH-funded elements of research? So I think that's a future step.

(35:21):
Similar with our innovation institute, that's been a little bit more of a grassroots effort, smaller-scale innovation projects, and we have a lot of discussion about, "It's probably time to shift a little more dollars into that so we can start seeing maybe some more immediate or maybe some more robust returns on some of those more innovation activities."

(35:44):
And I say this because I can't talk about any of the three growth lanes without mentioning two words that everybody hears too much about right now, which is AI. We truly see that we have to accept and believe we have to accept AI's going to be a part of our future. So it's incumbent upon us to make sure that we are investing in that wisely because it can have benefits on both sides of the equation. It can help us with continuing to lower our cost of care, those administrative, more business side of those repetitive tasks and help us with revenue cycle and all of the standard stuff, but we also truly believe it will impact how we deliver care. And so for us, we are treating it as an enabler for both the growth agenda and the optimization agenda.

Rae Woods (36:38):
Has anything come off your to-do list? I keep thinking about the rigor that you're bringing to this, the investments that you're making. Is there anything that you are saying, "You know what? We're going to stop doing this or we'll at least push it down on our to-do list"?

Kelly Elkins (36:51):
It is more about the constant prioritization of where folks are spending their time. And I think what we have done a nice job of is all of these things are important, the work needs to continue, but you can't do that if one person is driving all of that. So it's really been about who's going to own the care variation work? Our CMTO is leaning into that. We have two executives who are really thinking about the AI enablement and the innovation platform and moving that forward. I'm doing a lot of work in that ambulatory emerging core space.

(37:30):
So some of it is just about how do you assign the right leaders to have their focus be on a few set of things that then allows your organization to focus on all the things?

Rae Woods (37:44):
I appreciate that you're being realistic about just how much needs to get done. And then as a leader, you're thinking about, "Okay, then how do we titrate the efforts? How do we titrate who is doing the work? How do we stay flexible and nimble? Because really, we need to continue this full-court press."

(38:02):
Kelly, if you were to give one piece of advice to the leaders, the operators, the partners that are listening to this conversation, what do you want them to take away? What do you want them to do next?

Kelly Elkins (38:14):
Well, first, I was going to say, "Maybe evaluate another industry." No, I'm just joking. No.

(38:22):
I think those of us who've been in this work for our whole careers, you're in it for a reason, and here's the advice piece. There is always another headwind coming at you and you cannot allow a moment of the distraction of what's coming. You need to use that moment to say, "Okay, how are we prepared for that? How are we going to get ahead of it?" I talk to my team a lot of, "We're going to operate now like it's 2027 and 50,000 people have lost coverage because if we get the discipline and know how to do that now, when that happens, we're still able to grow and do the things we need to do."

(39:08):
And so that's my advice is it's so easy to get distracted and feel overwhelmed by everything occurring, and it's taking the time to say, "That is important," and, "yes, we need to have those short-term plans, those mitigation plans, we need to be focused on that," but while you're doing that, you cannot lose sight of the long-term vision and goals you have for your organization.

Rae Woods (39:34):
Couldn't have said it better. Thank you so much for coming on Radio Advisory. Thank you so much for sharing your story with all of us.

Kelly Elkins (39:39):
Absolutely. Thank you.

Rae Woods (39:48):
The biggest thing I want you to take away from my conversation with Kelly is that MaineHealth is operating as though it is already 2027. They aren't making assumptions about what's going to happen with the federal government or changes that might lessen the impact of health policy. They're doing the classic plan for the worst, hope for the best, and it's that realistic, clear-eyed approach that I want you to take back to your home organizations.

(40:17):
And remember, as always, we are here to help.

(40:23):
Next week on Radio Advisory, I'm talking with Advisory Board nursing experts Allyson Paiewonsky and Miles Cottier. Allyson and Miles are going to talk to us about the state of the nursing workforce in 2025 and how nursing leaders should be thinking about engaging and retaining their nurses.

(40:41):
New episodes drop every Tuesday. If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts, and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Chloe Bakst, and Atticus Raasch. The episode was edited by Katy Anderson with technical support provided by Dan Tayag, Chris Phelps, and Joe Shrum. Additional support was provided by Leanne Elston and Erin Collins.

(41:11):
We'll see you next week, and maybe I'll catch you at our November Summit, which is in Nashville, Tennessee on November 18th and 19th. You can find more details about our events in 2025 and even our events in 2026 at the link in the show notes.