Riverview Health CEO anticipates growth despite recent red ink

Originally printed in The Indianapolis Business Journal on July 14, 2023

John Russell

It’s turnaround time at Riverview Health, the small, 114-year-old hospital system owned by Hamilton County, which is trying to deal with a flood of red ink and competition from larger health care systems.

Riverview Health, based at its flagship hospital overlooking the White River in Noblesville, has posted operating losses totaling more than $75 million over the past three years as expenses have grown faster than revenue during the pandemic.

It’s an unusual feeling for the health system, which for decades operated as the sole major health care provider in Hamilton County and stayed comfortably in the black, year after year.

But unlike many other small hospital systems, Riverview is in a fast-growing county, and its new CEO, Dave Hyatt, said he wants to capture a good chunk of that growth. So instead of planning for layoffs or cuts in services, as other hospitals have done, Hyatt said he wants to tap into the county’s growth and prosperity to help pull Riverside Health back into the black.

“Our payoff is going to start,” said the 40-year-old Hyatt, who became CEO in March after a 14-month stint as chief operating officer. “And we’re here, ready for it.”

Before joining Riverview last year, Hyatt spent nearly 15 years with Indiana University Health, including time as president of several rural hospitals, such as Blackford Hospital in Hartford City and Jay Hospital in Portland. Several Hamilton County officials give him high marks for personal rapport, organizational experience and an energetic style.

“I think Dave Hyatt possesses the experience and the know-how and ability,” said Greg Murray, chair of the Riverview Healthboard of trustees. “I think he is the right person to lead Riverview going forward, without a doubt.”

Hyatt succeeds Seth Warren, president and CEO since 2016, who resigned in December. Warren will start a new job in August as president and CEO of Meridian Health Services, a mental health and addiction group practice based in Muncie. He could not be reached for comment

Riverview is certainly not alone in facing a tough situation. Roughly half of U.S. hospitals ended 2022 with a negative operating margin, according to Kaufman Hall & Associates, a Chicago-based health care consulting firm. And things are not expected to improve overnight.

“Expense pressures are unlikely to recede in 2023,” Kaufman Hall wrote in January. “Hospitals that embrace better workforce management strategies, secure more stable supply lines and more effectively negotiate with payers are likely to have better financial years in 2023.”

Across Indiana, many hospital systems face tremendous pressure to reduce the cost of care while increasing access and maintaining quality. And that is taking place as they try to recover from the pandemic, which closed many operating rooms for months at a time, delaying highly profitable, non-emergency surgeries, such as hip replacements and hernia repairs.

Poised for growth

But Riverview has the benefit of operating in a county known for its prosperous households and fast-growing neighborhoods.

Hamilton County boasts a median household income of $104,858, placing it first among all 92 Indiana counties. And with about 365,000 residents, it is the fastest-growing county in Indiana, expanding its population 26.5% from 2010 to 2020.

“They’ve got some great demographics,” said Ed Abel, retired longtime director of health care practice at Indianapolis-based Blue & Co., an accounting and consulting firm. “They can continue to build on that. They have a very good outlook.”

Hyatt wants to ride the growth wave by making Riverview Health the best place to work, practice medicine and receive care. And he wants to embrace the system’s reputation as a small-town environment that takes care of its families and neighbors.

So instead of planning for layoffs, Hyatt wants to attract more doctors, nurses and other employees to help staff operations and keep patients satisfied.

“I don’t think we’re going to get to where we need to go if we don’t have the right team in place,” Hyatt said. “My biggest concern right now is, how do we find enough people to manage this growth?”

One of his first key hires last month was Elizabeth Walker, a longtime health care consultant for several national firms, as Riverview’s chief operating and strategy officer.

Walker and Hyatt got to know each other two decades ago, when Hyatt was earning his master’s in health administration from Indiana University while interning at Health Evolutions, an Indianapolis-based consulting firm that is now part of McLean, Virginia-based Guidehouse. Walker, eight years older than Hyatt, was working as a consultant at the firm.

Walker, a lawyer who also holds a master of health administration degree and has done consulting work for hospitals in 49 states, also worked with Hyatt on several projects as he rose through the ranks at IU Health.

She echoed Hyatt’s sentiment that Riverview is still a growth story, unlike some smaller hospitals across Indiana that are downsizing.

“Riverview is at an amazing time in its history,” Walker said. “We are poised for growth, ready to serve this community, ready to continue its mission in ways that I’m afraid many systems can’t.”

Earlier this month, for example, IU Health announced it was closing the emergency room and inpatient services at its 15-bed Blackford Hospital in Hartford City, a rural community 80 miles northeast of Indianapolis, where Hyatt used to work as president. In December, Ascension St. Vincent closed Dunn Hospital, a critical care hospital in Bedford, about 75 miles south of Indianapolis.