Healthcare is a capital-intensive industry that takes more money to operate and grow than other industries. With that in mind, you’d assume that financial leaders (especially the CFO) in healthcare have a hard time managing all of the financial operations, teams, priorities and responsibilities involved. Interested? We invited Mike Grover to come and either confirm or debunk these perceptions for us.
Mike is the Chief Financial Officer at Greater Good Health, a company looking to expand primary care access and build a new system that supports the needs of both nurse practitioners and patients. He has over a decade of progressive finance experience, including six years working with risk-bearing primary care groups at DaVita Medical Group and Optum. Mike also has deep expertise in value-based payment mechanisms and partnership models.
Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results. With your host, Megan meese? Let's jump right in today.
Megan - 00:00:31: My guest is Mike Grover. Mike has over a decade of progressive finance experience, including working with risk-bearing primary care groups at DaVita Medical Group and Optum. Across the finance, contracting, analytics, and strategy functions. Mike has deep expertise in value-based payment mechanisms and partnership models. He collaborates with Payer Partners to develop highly aligned primary care delivery models centered around greater good health and peace. Mike, thank you very much for joining me on today's episode.
Mike - 00:01:04: You're welcome, Megan. Thanks for having me. Looking forward to the discussion.
Megan - 00:01:08: Yeah. Today we'll hear about your journey, of course, but we'll also be looking at finance from a healthcare perspective, which is an area that I'm looking forward to learning more about. So let's get started.
Mike - 00:01:18: Great. Let's do it.
Megan - As always, let's start with you, your journey, and how it is that you got to where you are today.
Mike - 00:01:25: Sure. So I started my career in finance. I've always been attracted to numbers. I was a math and econ major in college and ended up working on Wall Street for about four years. At Barclays, I was on a currency sales and trading desk. So it was hyper, hyper-specific to what was going on in the interest rate markets, what was going on in the macroeconomic climate. It was a great first job out of college to really understand business and finance but was hyper, hyper-specific, and ultimately wanted to be in a broader role. Didn't know exactly what I wanted to do. So I went and got an MBA at Northwestern from 2014 to 2016. And that's where I was exposed to finance roles within operating companies rather than in kind of the Wall Street arena and really was drawn to healthcare. It was an opportunity to, as they say, do well and do good at the same time, really make an impact and help healthcare companies drive financial results and financial sustainability. So I joined DaVita out of MBA in what's called their Redwoods Leadership Development Program, where they throw a ton of resources at training and retention and really provide fresh MBAs with roles that are a bit more stretched. So learned a ton about healthcare in that role. After about three years, DaVita sold off its medical group business to Optum, and I went with that transaction. So did about three years at DaVita and then three years at Optum. My work was financed-centric, but a bit broader for a bit. I ran an analytics team and got that off the ground for a bit. I worked on a lot of contract negotiations to understand how we would get reimbursed for our services and how we pay other healthcare providers for their services. And then ultimately, my last role at Optum was running strategic finance for the CFO of a few of our markets on the West Coast. And that role was really focused on high sticks decisions that healthcare companies were making. So things like acquisitions, contract negotiations, product strategy, investment, a lot of the health care decisions that you kind of have to get right the first time because they'd be cumbersome and costly to reverse. That was kind of my background leading up to Greater Good Health. I worked with Sylvia Hosten at DaVita Medical Group and Optum. She founded Greater Good Health in the middle of 2021 and then had an opportunity to bring on a CFO earlier this year. So I was really excited about the opportunity. My first CFO role had a really, really interesting mission-driven startup. I made the leap in July of this year, and I've been at Greater Good Health for about three months now.
Megan - 00:04:31: Wow, that's an impressive background in the medical field. So let's just talk about the leadership development program at DaVita. I always think that there's a lot of value in those. So what did you learn from that and kind of what have you taken away and implemented with your organization?
Mike - 00:04:57: Yeah, I would say there's kind of two main buckets of learning that I had from DaVita. First of all, healthcare, I think, like many other industries, kind of has its own jargon, its own industry-specific knowledge. And Davido is really willing to place bets on folks that hadn't necessarily worked in healthcare and teach them all the in and out of how the healthcare system works. And I mean, as any of us have experienced in our own receiving of healthcare, it's always fairly convoluted. So they really provided a great basis for understanding healthcare and understanding how that ecosystem works and some of the financial decisions that go into healthcare that was really helpful from more of the hard skills perspective. But then DaVita also does a really, really good job on soft skills training and leadership development. So there are all sorts of courses that they run away from, teamed away of leadership that trains up and coming leaders, really how to hone their interpersonal skills and their leadership skills. So that was really helpful. And a lot of the tools that I learned at that point in my career, I've carried with me through to Optum and through to Greater Good Health.
Megan - 00:06:13: And let's talk about your current organization, greater good health. What is it that they do?
Mike - 00:06:19: Yeah, so at its core, Greater Good Health is trying to empower nurse practitioners and expand primary care access through healthy, happy, well-trained nurse practitioners. So maybe if I back up just a minute. When Sylvia was founding the company, I think she had two main insights. The fairly obvious insight that you hear about all the time in the news is that we have a primary care shortage and it's only getting worse. A lot of doctors are aging out and retiring. A lot of people coming through med school are not choosing to go into primary care, they're choosing to go into a specialty. And as a whole, our population is getting older and thicker. So the demand for primary care is going up and the supply is going down. I think the really unique solution to that that is still being identified and that we're all honing in on is that nurse practitioners are essentially the highest training that nurses can get. It requires a bunch of experience and a bunch of extra education paths. In our end, nurse practitioners are really, really well positioned to be the solution to the primary care shortage. So in 26 of the 50 states right now, nurse practitioners have what's called Full Practice Authority, which means they can practice primary care without the oversight of a physician. And there's just a much, much greater supply of nurse practitioners. And a disproportionate amount of nurse practitioners coming out of school are choosing to go into primary care. That's really where we're focused. We're aiming to delight the MPs by building an employer around the MP. Whereas historically a lot of MPs have been employed by more physician-centric practices. We're aiming to help patients by increasing their access to primary care. And then we're aiming to partner with health plans and risk-bearing provider groups to really manage population health in a differentiated way and enter into what's called value-based care contracts, where we're paid more based on the outcomes that we can generate versus the historic healthcare system of being paid based on the volume of services you do. So we're really focused on our outcomes and on taking care of the population's worth of patients and improving population health.
Megan - 00:08:55: And just out of curiosity, what is a risk-bearing provider?
Mike - 00:08:59: Yeah, so a risk-bearing provider is essentially what I came from at both the Vida Medical Group and Optum. It's a provider group like your traditional primary care practice, that also takes risks as if it were an insurance company. So the insurance company serves more of an administrative role and then passes what's called total cost of care risk to the provider. So not only is the provider responsible for providing primary care services like a normal primary care provider, but the risk-bearing provider is also financially responsible for everything that happens outside of the walls of the primary care clinic, like Er visits, hospitalization surgeries, things like that. And the whole theory behind passing the risk to primary care provider groups is that if the group can over-invest in really good, high-quality, coordinated, preventative primary care, then they can generate a surplus on that risk by avoiding downstream events that would otherwise be avoidable, like Er visits or hospitalizations or chronic conditions that go unmanaged. It's really about aligning incentives for the most upstream providers and having them fully manage the care of their patients, both within the walls of the primary care practice and every other healthcare need that population has.
Megan - 00:10:27: And you've been in greater good health now for a few months. What attracted you to this company, to begin with?
Mike - 00:10:35: Yeah, so a few things that really attracted me to greater good health. One is I knew Sylvia, our founder, and CEO from working together at David Medical Group and Optum. I love working with Sylvia and really respect her and her vision. So, personally, Sylvia was a big reason why I made the jump from the kind of big corporate Optum to a small scrappy startup. But I was also at the point in my career where I built the healthcare skill set over about six years within bigger organizations, where no matter how big the decision you're making is, you're just a small cog in a huge healthcare machine. Like, I think Optum is owned by United Health Group. It's fortune five. DaVita is probably Fortune 50 or so. I was really looking for my next role to be a much bigger role in a much smaller organization. So the kind of combination of knowing Sylvia, trusting Sylvia very much, believing in the vision of greater good health, and the role fit, where it's a much bigger role in a much smaller organization, all drew me away from Optum and integrated good health.
Megan - 00:11:45: Yeah. How is that transition going from a large company to a scrappy startup?
Mike - 00:11:51: It's been so much fun. I joke that I think we make more decisions in a week at greater good health than we did in a quarter at Optum. It's just a really fun fast pace and a much broader scope. I feel like I'm able to partake in a much broader array of decisions facing the organization versus the big organizations, where your scope is generally much narrower.
Megan - 00:12:18: And how has it been being a CFO? Do you feel like you were ready for it, or has it been trialed by fire a little bit?
Mike - 00:12:26: I would definitely say the latter. When I was coming into the role, I kind of divided my mind into three buckets kind of financial process, financial decisions, and investor relations. And it was really only that middle bucket financial decision that was square in my wheelhouse that I felt super comfortable about. The financial process had always been run by the FP and A team, which I was never a part of. And investor relations are something new, being part of a small venture-back company instead of a big publicly traded company. So I would say I came in feeling well-prepared for about a third of the role. And the other two-thirds, I'm in the middle of my trial by fire right now, but having fun. I really haven't been challenged in this way in years because it's so much being thrown at me all at once. And I personally find that's the best way to learn. Just dive into the deep end and figure it out. If you go, yeah.
Megan - 00:13:33: So how are you getting comfortable with those other two areas? Do you look to like, hire people that are good in those or like, what's your technique to feel comfortable in the two areas where maybe your skill sets were not as strong?
Mike - 00:13:46: Yeah, so on the financial process, there's a woman on my team who's been with Greater Good Health for over a year at this point and I'm really lucky to have her around. She mostly runs the chef on the financial process, so she has that under control. We have an outsourced accounting firm that we use that's really helped us clean up the books over the last handful of months. So we've outsourced some of that work and then we have some tools and technology, but nothing super sophisticated yet. I think as we grow more, we'll look to invest more in sophisticated tools and technology around FPNA, and then investor relations is a bit more external learning. Talking to our current investors, and our current board members, talking to other friends who've either been at startups or at VCs and doing a bunch of reading outside is how I learned that side and become more comfortable with it. Definitely still early in that learning journey, but it's a little interesting to me we're on the financial process side of things, and when I got there we had some pretty good resources in place in-house to help get me up to speed. Whereas on the investor relations and fundraising side of things, it's been a bit more self-directed through connections with investors, advisors, friends, colleagues, and things like that.
Megan - 00:15:13: And I know it's only been a few months, but what are your proudest achievements since joining Greater Good Health?
Mike - 00:15:19: Yeah, I think we did a ton of cleanup work in the first few months I was there of really, really digging in and understanding the business model and the unit economics. So that was one of the first things I wanted to do when I got in on the ground floor, is figure out what our unit economics looks like then how should that drive our pricing strategy and how should that drive our productivity target. And in my mind, a lot of creating a scalable business comes down to how good or bad your unit economics are and how much can you scale that. For me, that was a really important first project to get a super strong grasp on because it's really going to inform how we invest and how we grow going forward.
Megan - 00:16:06: So I'm just curious, what was your 30-60-day plan when you started? What were your goals just for the first month?
Mike - 00:16:17: The first 30 days really were doing nothing productive but learning. So it was a ton of going to La. Meeting the team, figuring out what was on everyone's plate, and what decisions each lane of the business was focusing on because we're such a small organization that finances intertwined with every other lane in the business. So the first month was really mostly spent on the learning and developing relationships and getting a pulse for where finance was serving the needs well of operations and what the big outstanding questions were that groups like Operations or Sales or Product had for finance. So that was month one and then month two was really prioritizing and starting to tick through that list of what are somewhat large pressing problems that we should be able to answer in the next month or so. That figuring out our unit economics and pricing strategy was a big piece of that. Putting in place financial reporting that tied to operational reporting all in one consolidated view part of that. So it was really a lot of foundational finance things that I started working on in the second month.
Megan - 00:17:38: And I saw on LinkedIn that you're hiring financial analysts to help build the finance function at Greater Good Health. So what is it that you look for when you're hiring?
Mike - 00:17:50: We are, and I'm very excited to be growing the team and have someone at an early career stage come in and help us grow and build our function. For me, I think it depends a little bit on the seniority of the position. But specifically, this role is a fairly early career position. Maybe someone with two to three years worth of experience. And at that stage, I'm always looking for someone who is inquisitive and hungry, and smart. I think you can train a lot of hard skills. You can train on how healthcare work. You can train someone on how to build better models, but you're really in that higher looking for a mix of raw intelligence and then the willingness to learn and grow and try things and fail and learn from those failings. And I think the mindset is so, so important with early career hires because that's just such a steep learning curve at that early point in someone's career. You need someone who's growth-oriented.
Megan - 00:18:59: And as you look to grow your team, how are you tackling the talent issues, or scarcity, I'll say, of talent at the moment?
Mike - 00:19:07: Yeah. I'm lucky that we only have one open role right now. I think it would be a lot more daunting if we were trying to build out a huge team. But generally speaking, a lot of these functions were small enough that I'm currently comfortable using third-party contractors or vendors to help us out. And then once we hit a certain scale, we'll look in the source that so like, I think accounting is the perfect example right now. We just hired a new accountant maybe two months ago and they've done great work and we really trust them. And it's just much more efficient to have that sort of talent outsourced versus in-source. But maybe ask me again in a year. Hopefully, we've grown a lot as an organization, and finance.org will grow a bit more and source a bunch more functions.
Megan - 00:19:58: Yeah. And to all the people out there who are looking for roles like you. I've worked for big companies and now a small company, and it is much more fun working for a small company.
Mike - 00:20:11: I agree. Where were you at before you I was with Accenture.
Megan - 00:20:19: Yeah. I think when I left there were about 475,000 employees. So definitely feeling like just a cog in a wheel.
Mike - 00:20:26: Yes.
Megan - 00:20:28: And you've been working on the financial side of the healthcare industry since 2016, so a little bit. So since then, have you found that your role or priorities have shifted, particularly in the last two and a half years since Covid?
Mike - 00:20:45: Yes, I'll tackle that, I think in two parts. My role has shifted a lot. I've been really lucky to have bosses and one boss in particular who has continued to throw me into the deep end whenever I feel comfortable in a role. So when I first started out, I was in more of a financial strategy role, looking at different business lines we had, analyzing them, and figuring out how to optimize them. And then the next role I was in shifted where it was much more about building an analytics team and a contract negotiations team around some of the high-stakes provider negotiations that we would go into. So building the analytics and building the strategy and then passing it off to a team in the market who would go out and negotiate contracts based on those analytics and strategies. That was kind of the second role. And then the third role, that front line leading the negotiating team opened up and I was able to step into that role. So kind of using the analytics and strategy that I previously developed and then being the person to implement that. And then my final role at Optum was much more around financial decisions and that's where I got much more exposed to acquisitions and partnerships and product strategy and things like that. I was really lucky. In those six years at DaVita Medical Group in Optum, I really had four distinct roles, each of which challenged me in a very different way and contributed greatly to my learning. So that was really important. And then in terms of the healthcare industry and the shift in the last couple of years due to COVID I think a really exciting opportunity is around digital and telehealth. Before COVID telehealth was something that everyone in the industry seemed to think was a great idea. They had a really challenging time getting adoption, both adoption from providers, adoption from patients, and then adoption from payers, being willing to reimburse for the model. And I think going forward, COVID has really, really accelerated the prioritization of Telehealth and it's fantastic for access. I know personally, I'd much rather sit at my computer, click into a virtual visit, do my 15 minutes visit and beyond with my day versus drive 20 minutes to a physician's office, sit in the waiting room for 20 minutes be seen for 20 minutes and drive 20 minutes home. So that's just a really interesting one that I think the whole healthcare industry has seen in the last couple of years is the adoption of telehealth and the ability for telehealth to enhance access for a lot of folks who might have transportation issues or just inconveniences of going and seeking healthcare in person every single time they needed something minor.
Megan - 00:23:52: And what do you see as a healthcare CFO prioritizing in the future or needing to prioritize in the future?
Mike - 00:24:01: Yeah, there are a few macro trends going on that I think are all going to be important to the healthcare CFO. The first one that just come about in the last handful of months is, with rising interest rates, I think CFOs are going to be under much more scrutiny when it comes to capital efficiency. So really understanding how your business is funded and what projects are high enough ROI to warrant an investment in them. I think when interest rates were a lot lower, there was probably a bunch more leniency when it came to financial decisions in ROI. And now that we're moving to a higher interest rate environment, capital efficiency is going to be really important. And especially because healthcare services is a capital-intensive industry, especially kind of brick and mortar clinics, and things like that, it just takes a lot of capital to operate and grow. That's a really important one. Another macro trend that we're personally riding at greater good health, and I think is the future is a continued shift to value-based care and more and more of these provider groups becoming risk-bearing provider groups. In the few geographies within the US. Where value-based care has really, really caught on, the quality of care is noticeably higher and the cost of care is noticeably lower. So as healthcare becomes a bigger part of GDP and healthcare inflation continues to be a problem both for government spending and people's personal spending, I think the shift to value-based care is really important. And every healthcare CFO needs to figure out if their organization going to fight it or if their organization going to figure out how to play within the value-based care ecosystem. Those are a couple of things that I think are going to be particularly in front of me for a lot of healthcare CFOs in the coming years.
Megan- 00:26:07: Maybe you already touched on it, but what's the difference between value-based care and regular traditional care?
Mike - 00:26:15: I think the simplest way to describe it is that medicine has historically been what's called a fee for service, which essentially means you pay for the services that you render. So there are some bad incentives there where it incentivizes overutilization of certain services, especially specialist services and hospital services, which are the most expensive services in the healthcare industry. Whereas value-based care is paying for outcomes, not for services. So that's really a mindset and a financial incentive team where outcomes are generally driven upstream with primary care. So there's an over-investment in primary care that actually drives down utilization in specialty care and hospital care. So this is kind of the exact opposite incentive of what fee-for-service medicine creates. So anyway, I think a lot of parts of the healthcare ecosystem are migrating more and more to value-based care. And essentially what that means is an overinvestment upstream in the practitioners doing preventative services, which should lead to a reduction downstream of more acute events with specialists, Er visits, hospital stays, and things like that. And the really nice thing about value-based care is it's a huge benefit for the patients. Because generally the events that we are trying to avoid by investing in prevention are chronic diseases that are unmanaged, hospital stays that could have been avoidable, er visits that could have been avoidable, and all this stuff that's really unpleasant for patients to go through.
Megan - 00:28:04: Yeah, catch it early rather than when it's too late. So, as you look internally, what is one of the biggest challenges that you and your team are facing, let's say in the last quarter of 2022, maybe even the first quarter of 2023, basically the near term?
Mike - 00:28:23: Yeah, I think the biggest thing that we're trying to work through right now is our growth plan. So, like I was saying, Healthcare Services is a fairly capital-intensive business. With interest rates rising, the funding markets are a lot tighter than they were six months ago. And we're trying to figure out what the correct growth plan should be for our business in order to be capital efficient enough that investors want to invest in our growth. That's the big thing that's top of mind for me right now is really figuring out what our growth plan looks like, how we finance it, and what are the really discreet, concrete proof points we're going to be able to show along the way at various points in time to continue to be able to raise external funding to fuel the growth of our business.
Megan - 00:29:17: And as the business grows, what tools and technologies within accounting and finance are you looking to invest in? Where's your focus?
Mike - 00:29:28: All sorts of yeah, so right now, right now, we're pretty basic. We're a very early-stage company, so we have a payroll system. We're just putting in place a better expense management system. We have some cloud accounting software, but all pretty entry-level technology staff when it comes to financing and accounting. So as we move forward and as we grow, I'm definitely looking for more automated budgeting, more automated forecasting, more automated FPA, and probably a bunch more sophisticated systems around HRIS and things like that, where a lot of our Stem will go. So I think the answer is we're pretty broadly looking to upgrade our financial tech stock over the next handful of years in a bunch of different places.
Megan - 00:30:24: And lastly, what advice do you have for CFOs who are looking to drive strategic value and grow revenue and margin within their organization?
Mike - 00:30:35: Yeah, I'm a huge believer in the 8020 principles, so as a CFO, there are going to be dozens, if not hundreds of levers at your disposal at any point in time. And I think it's super important to pick the four to seven levers that are the most impactful to your business and really focus on optimizing those. It's kind of one of those things where if you're trying to track and optimize 100 different things, it's going to be really challenging to do each one of them well. Whereas if you're just going to pick five to seven of the most important metrics to optimize, your journey is going to be a lot more focused and a lot more effective, in my opinion.
Megan - 00:31:22: Yeah, I love that advice. I'm a big believer in the 80-20 rule too. Mike, thank you so much for being my guest today.
Mike - 00:31:30: Thanks, Megan. I appreciate you taking the time to interview me. This is really fun.
Mike - 00:31:34: Yeah, I really enjoyed speaking with you and hearing about all of your experiences and the resulting insights, and I wish you greater good health. All the best. Sounds like you're both doing wonderful things. And to all of our listeners, please tune in next week, and until then, take care.
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In this episode, we discuss:
Empowering nurse practitioners
What is a risk-bearing provider?
The four roles of a healthcare CFO
What healthcare CFOs should focus on
Value-based versus traditional care
The Healthcare CFO Empowering Nurse Practitioners
Greater Good Health aims to empower and expand primary care access through well-trained nurse practitioners. Doctors are aging out and retiring, while many students coming through med school choose to go into a specialty instead of primary care. Therefore, as our population gets older and sicker, the demand for primary care rises while the supply lowers. In response, the company aims to support the needs of nurse practitioners and patients.
“We're aiming to delight nurse practitioners by building an employer around them, whereas historically, a lot of nurse practitioners have been employed by more physician-centric practices,” Grover said. - 06:13 - 08:55
What Is a Risk-Bearing Provider?
A risk-bearing provider operates like a traditional primary care practice that takes risks as an insurance company. An insurance company plays more of an administrative role and passes the cost of care risk to the provider. The provider is thus responsible for primary care services and financially for everything that happens outside the walls of the primary care clinic.
“The theory behind passing risk to primary care provider groups is that if the group can overinvest in high-quality and coordinated primary care, they can generate a surplus on that risk by avoiding downstream events that would otherwise be avoidable,” Grover said. - 08:55 - 10:27
The Four Priorities of a Healthcare CFO
When Mike started in healthcare, he was in more of a financial strategy role, looking at different business lines to analyze and optimize them. Afterwards he shifted to building the analytics and strategy, then into implementing the analytics and strategy he had previously developed. His final role was focused more around financial decisions, where he got exposed to acquisitions, partnerships, and product strategy. In terms of the healthcare industry and the shift in the last couple of years due to Covid, the role of digital and telehealth has grown substantially.
“I had four distinct roles, each of which challenged me differently and contributed to my learning,” Grover said. - 20:27 - 23:53
What Healthcare CFOs Should Focus on
There are a few key macro trends healthcare CFOs should consider. With rising interest rates, CFOs should be under much more scrutiny regarding capital efficiency. The future is a continued shift to value-based care, and more provider groups will become risk-bearing organizations.
“Now that we're moving to a higher interest rate environment, capital efficiency will be important, especially because healthcare is a capital-intensive industry and takes more capital to operate and grow,” Grover said. - 23:52 - 26:08
Value-Based Versus Traditional Care
Medicine has historically been what's called a fee-for service, which essentially means you pay for the services that you render. However, value-based care focuses on paying for outcomes, not for services. That's a mindset and a financial incentive scheme where outcomes are driven upstream with primary care, so there's an overinvestment in primary care that drives down utilization, specialty, and hospital care.
“The nice thing about value-based care is that it's a huge benefit for the patients because the events that we are trying to avoid by investing in prevention are unmanaged chronic diseases, hospital stays, and ER visits that could have been avoidable. All this stuff that's unpleasant for patients to go through,” Grover said. - 26:08 - 28:05
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