Issue link: https://beckershealthcare.uberflip.com/i/1538336
22 HEALTHCARE NEWS 22 Health systems wrestle with the 'true cost of care' By Alan Condon A s Executive Vice President and COO of Winston-Salem, N.C.- based Novant Health, John Gizdic is helping steer a nonprofit system through some of the most financially turbulent times in recent memory. With a deep background in hospital operations and a sharp eye for innovation, he is focused on balancing investment in care access, workforce and infrastructure while navigating shiing reimbursement and policy headwinds. In an interview with Becker's, Mr. Gizdic explained how Novant defines the "true cost of care" in 2025 and why nonprofits such as Novant are uniquely positioned — and burdened — in delivering it. Beyond the price tag: Defining the 'true cost of care' At Novant Health, cost is not simply what it takes to deliver care today; it's about investing in a healthier tomorrow, according to Mr. Gizdic. "When we think about the true cost of care, we're focused not just on delivery, but on the cost to create a healthier future," Mr. Gizdic said. "at means looking at the total investment — not only clinical, but also financial and social — that's required to improve outcomes for our patients and communities." A recent study published by researchers from Emory University's School of Public Health found that hospitals account for only about 30% of traditional healthcare spending. To truly understand cost, leaders must consider the full care continuum — from ambulatory and virtual care to post-acute and, increasingly, at-home services. "We also consider the investment in the people who deliver that care," he added. "Supporting our clinicians and building a healthier workforce ultimately supports healthier communities." One example: Novant's living wage commitment, currently set at $17 per hour. e system also offers tuition reimbursement and earlier this year announced more than $300 million in pay increases and bonuses for 2025. "Finally, and perhaps this sounds counterintuitive, we have to account for the cost of delaying or avoiding care," he said. "at has real, measurable consequences — both for individual health and for the broader economy, in both the short and long term." Policy turbulence puts mission at risk Widespread Medicaid cuts and ACA reforms — part of President Donald Trump's "One Big Beautiful Bill" — will force hospitals and health systems across the country to make difficult decisions about staff, and Mr. Gizdic said Novant is preparing for a future where policy volatility could strain its ability to serve. "What's interesting is that when we talk about the true cost of care, we haven't even touched on payers or policy," he said. "e needs of our communities don't change, even if reimbursement does. Our mission is to provide care, regardless of shis in policy or reimbursement." But the stakes are high. "ese changes can significantly disrupt our ability to care for communities, particularly the safety net services that are already underfunded," he added. Profit is not a four-letter word Despite their tax-exempt status, nonprofit hospitals and health systems must remain financially viable. ey typically operate with much lower margins than their for-profit counterparts while continuing to maintain and expand essential services for the communities they serve. ey are two completely different models, according to Rob Allen, president and CEO of Salt Lake City-based Intermountain Health. "eir [for-profit health systems'] success oen depends on treating illness; ours focuses on preventing it, and that changes how and where we invest," Mr. Allen said in a recent interview with Becker's. Mr. Gizdic echoed that sentiment: "ere's a misconception that not- for-profit means we shouldn't make a profit. e reality is, we absolutely must. And 100% of that profit is reinvested into the community." at reinvestment supports team members, expands services and funds essential programs like trauma care, behavioral health and inpatient dialysis — services that for-profit systems oen reduce due to low or negative margins. "By definition, not-for-profit hospitals are required to treat everyone who walks through our doors, regardless of their ability to pay," he said. "We go beyond that at Novant Health and provide hundreds of millions of dollars in community benefit each year. "Maybe we need to do a better job of telling that story, but that's not why we exist. We're here to care for the community and provide essential services. We serve the entire community, not just the profitable pieces." Managing care gaps with innovation, not cuts To sustain access and affordability, Novant is doubling down on strategies that lower cost while improving outcomes. One initiative Novant recently launched under a company called MedVenta focuses on supporting patients with chronic diseases — particularly diabetes — through more effective medication management. "We all know pharmaceutical costs are skyrocketing and make up a growing share of the total cost of care," he said. "rough this program, pharmacists work directly with our primary care and specialty physicians, and with their patients, to conduct thorough medication reviews. ey focus on safety, education and affordability." In just the past year, 80% of the 15,000 patients enrolled in the program saw their out-of-pocket costs decrease, according to the health system. Beyond the financial impact, the clinical results have been significant: on average, patients saw their A1C levels drop by about two points. "It's another way we're trying to lower the total cost of care — both financially and clinically — by addressing one of the fastest-growing areas of healthcare spending," he said. Expanding access to care Novant is also expanding its ambulatory footprint through imaging centers, ASCs, infusion centers and care-at-home programs. e system aims to more than double its ASC count in the next three to five years, reaching up to 50 surgery centers. "We've made a strong push into outpatient care, including freestanding imaging centers, ambulatory surgery centers, infusion centers and more recently, care-at-home programs," he said. "Patients tend to prefer these settings, and they're more cost-effective when appropriate."