FirstHealth of the Carolinas is a not-for-profit healthcare system based in Pinehurst, North Carolina, serving communities across 15 counties in the Carolinas. The organization operates four hospitals and a network of primary care, specialty and outpatient facilities, with a particular focus on rural and semi-rural communities.
FirstHealth has been investing heavily in expansion projects across the region. What is driving that growth?
Growth is essential, even in a rural health market. Being a nonprofit, independent rural health system, one of our advantages is being flexible and in a position to be able to do the right thing to meet the needs of the communities we serve. That means choosing to invest in the future of rural health care. One example is at our Hoke campus in Raeford, N.C. This is a growing área with high demand for health care services. There are days that emergency room cares for as many patients as our flagship hospital, Moore Regional in Pinehurst, so we had to expand to meet the needs of that community. We're adding inpatient beds, outpatient space and medical office building space on that campus, marking the third expansión in just 12 years.
We're also investing in continued access to high-quality care in our most rural market in Montgomery County, N.C. Montgomery Memorial Hospital is the oldest hospital in our network and it's at the end of life. We just broke ground on a new critical access hospital that is right-sized for the community's needs.
Together, those two projects represent nearly $100 million in capital infrastructure for rural markets. Those projects are examples of living our misión and core purpose to care for people.
Why has FirstHealth remained financially stable while many rural hospitals are struggling?
We have a 70% government payer mix of Medicare and Medicaid, which reflects the rural communities we serve. Historically, FirstHealth has learned to live off the Medicare and Medicaid dollar. We intentionally keep our organization structure lean and efficient and operationally effective, while continuing to place the highest priority on patient experience and quality. In fact, Healthgrades just awarded us the Outstanding Patient Experience Award for the 19th year in a row putting us in the top 10% in the nation for patient experience.
We've built a system where patients don't need to travel outside of the market for most services. We provide neurosurgery, cardiothoracic surgery, OB-GYN, labor and delivery, a NICU, primary care, behavioral health and even three infectious diseases physicians. Fifty-one percent of patients treated at Moore Regional come from outside Moore County. We opened the FirstHealth Cancer Center in 2023, and we've experienced double-digit growth and record patient satisfaction results. That was simply the result of us listening to our patients and being able to deliver what they needed and wanted in a cancer program.
How are you preparing for the impact of HR1 and reimbursement changes?
HR1 is a disruptor for everybody. It's going to affect rural and urban providers alike, and size and scale will determine how much impact it has. We started preparing early. At our recent Board of Trustees retreat, the entire agenda was focused on preparation for HR1, and we've already created five bodies of work around growth, operational expense and revenue cycle improvement.
Thirty-five to 40% of hospitals, particularly in rural markets, are already operating with negative margins before HR1. I'm very worried about what happens to those hospitals afterwards. We've maintained a steady profit margin throughout my tenure, and our focus over the next two years is making sure we maintain the profitability and operating margin needed to survive those changes.
How is AI improving patient care at FirstHealth?
Our cardiologists saw Cleerly as a way to improve patient care and patient outcomes. But one of the most successful AI investments we've made is ambient listening in primary care. The technology handles documentation while physicians focus on patients. I've never seen a product that has made primary care physicians happier. This technology supports patient care, productivity and provider engagement and satisfaction.
We're not front-runners in innovation—that's probably the academic medical centers—but we're not going to be at the end of the rope around AI either. When we evaluate technology, we ask whether it supports our purpose of caring for people, improves quality or patient satisfaction, and provides a return on investment. That return can be quality, patient satisfaction, throughput, employee engagement or physician engagement.
How much advanced care can now be delivered closer to home in rural communities?
We're the only provider in the region offering services such as open-heart surgery, neurosurgery, OB-GYN and a NICU without patients traveling 70 to 80 miles. Decades ago, we made a conscious decision that we wanted to provide almost everything a community would need from their local health system.
Ambulatory care has been a major driver of growth. A decade ago, we had roughly 10 to 12 ambulatory practices; today, we have more than 100 and we're adding 5 to 10 a year. Most of that growth comes from independent practices joining FirstHealth. When I became CEO, net revenue was around $680 million; today it's $1.2 billion, and a lot of that growth has come from the ambulatory side.
How is FirstHealth addressing workforce shortages?
Nursing is the biggest issue affecting workforce shortages. Forecasts suggest North Carolina could face a shortage of 10,000 nurses by 2030-2032, so we decided to be proactive. Through our FirstHealth Foundation, we're fundraising for a $20 million endowment called FirstFutures. This is a collaborative effort to recruit and train the health care staff and providers of the future. FirstFutures offers community college sponsorships, pre-apprentice and apprenticeship programs, internal academies for medical assisting and nursing assistants, and so much more. The interest generated by that endowment will fund 100 nursing scholarships every year for local students. We'll pay for their education and they'll come back and work for us. If you invest in people who live here and grew up here, they're much more likely to stay.
What do patients expect from a regional health system today, and what should policymakers understand about rural healthcare?
Patients want access. That's why virtual care has become so important. We've expanded virtual, convenient and urgent care services because patients want healthcare delivered where and when they need it. We're trying to meet patients where they are.
For policymakers, I'd say keep a close eye on independent rural health systems. They're much more vulnerable to legislative, policy and payment changes than larger consolidated systems.
Throughout my career, I have placed a lot of emphasis on culture, because the only way to provide great quality care and achieve exceptional patient satisfaction scores is through engaged and fulfilled employees. We've been recognized by Forbes and Becker's as Best Places to Work. We are committed to investing in the health and well-being of our employees. An example is providing all employees a free membership to one of our six fitness centers. We went from 7% of our workforce using those facilities to several thousand employees. When we invest in the well-being of our people, they can bring their very best to care for those who depend on us.
