Al Maghazehe, President & CEO, Capital Health
In an interview with Invest:, Al Maghazehe, president and CEO of Capital Health, discussed navigating post-COVID challenges while implementing innovative care models. He detailed how Capital Health is addressing staffing shortages through training programs and transforming care delivery through hospital-at-home services and robotic technology.
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Over the past 12 months, what have been the most significant milestones or achievements for Capital Health?
There has been a great deal done in terms of programmatic additions, changes, and upgrades. The most significant challenge any hospital faces nationwide is to deal with the implications not of COVID, necessarily, but post-COVID. Post-COVID had a dramatic impact on the supply chain, labor costs, and labor shortage. 2024 was filled with dealing with those issues and trying to adjust to the new reality accordingly.
On a broader level, how would you describe the state of the healthcare industry in the region today?
We’re facing some difficulties, with significant headwind for a number of reasons. AI, for example, has significant advantages in how we and other businesses operate. But it’s being used aggressively by payers, and to some extent, by those controlling reimbursement for providers. Unfortunately, providers — hospitals and doctors — aren’t fast enough to react. There’s an adjustment needed to level the field, and that’s creating issues such as an inability to submit bills correctly or fast enough, and challenges in reimbursement.
Understanding the new technology — assessing care, assembling records to reflect that assessment, and delivering invoices in a way accepted by payers — has become a major challenge. Technology advanced too quickly, and we haven’t caught up. That’s one major headwind.
The second is healthcare policy uncertainty, what happens to funding for providers. Research funding has already been affected. Medicaid may be impacted. Many hospitals treat significant numbers of undocumented immigrants, and partial reimbursement for that care could be eliminated. There’s a lot of uncertainty. This should clear up in the next five to six months, but these are the big challenges we’re facing.
Regarding technology and innovation, what new advancements have helped Capital Health stay ahead in the medical industry?
We’re constantly trying new technology in areas that will change hospital operations. Healthcare costs keep rising – labor, supplies, and medications are increasingly expensive. As people live longer, costs become unmanageable. Most healthcare dollars are spent in the patient’s last six months. The United States can’t sustain these costs without changing how we deliver care.
We’re pursuing two initiatives: hospital-at-home programs (30%-40% of future business) and micro-hospitals. These models dramatically reduce costs.
In technology, we received a rare cancer-treating robot (there are only 19 in the United States) this summer. Our Hopewell campus will offer histotripsy, which liquefies inoperable tumors (currently approved for treating liver tumors, with ongoing studies being done for other tumor sites). We’re using technology for admissions/discharges as well, and we’ve also developed 24/7 home monitoring services for patients living alone.
How have patient needs and expectations evolved over the past year?
I don’t know if I can say it has shifted, but certainly, expectations are higher. I would say over the last 12 to 24 months, people expect more from their healthcare providers than they did before. And now part of our reimbursement depends on how satisfied people are with our services. As a result, we now pay a great deal more attention to “soft” things than before. Things that people look at and measure how effective you are.
They may not know that you did the greatest surgery using robotics because they were not awake. And if they did, they wouldn’t know what it was that you did. But they can taste their meal and say it didn’t taste good. So, they think maybe they’re not in a good place. Or, for example, my window wasn’t as clean. Or my TV wasn’t working right. Or when I called, it took the nurse 15 minutes to show up.
Now, we are using a lot of different things, especially in the area of hospitality, and also to some extent, patient care. We’re testing this, for example, for admissions and discharges. We’re using a virtual nursing platform rather than a live nurse. That is interesting because it saves a lot of time and money, but also, patients are not left waiting. These are the kinds of things that I see happening more as we move into the future.
How is Capital Health addressing staffing challenges, particularly in nursing and licensed clinical positions?
We have done some amazing things in dealing with staffing challenges, especially with nursing, which is something that everybody’s dealing with. We have a nursing school with a new tuition waiver program. They come in, go to school, and we don’t charge them tuition. Instead, they commit to working for Capital Health for a period of time after they finish. This is how we attract them and keep them. It’s working well for us.
We also started our own nurse residency program, and I’m guessing we probably have graduated either 180 or 200 nurses already. Once they graduate and finish their nursing program and become a registered nurse, they need mentorship, and they may want to specialize in certain aspects of nursing. Let’s say that somebody wants to learn how to focus on oncology, critical care, neurosciences, or OBGYN. We provide these opportunities in our Nurse Residency Program. Nurses come from our own nursing school, and we also recruit from other schools. It’s a great way to integrate them into our workforce among our more experienced nurses.
We are also developing training programs in several other areas to train people, pay them, and then hire them. When we see a shortage, we look at whether we can develop a training program like that to help address it.
What is your outlook for the New Jersey healthcare sector over the next few years? What are Capital Health’s top business priorities in that time frame?
Our priority is to become a lot more efficient, to make sure that we create a larger margin, because a lot of uncertainties will be coming everybody’s way over the next few years. All hospitals have to be extraordinarily efficient. I see the regulations easing, and that will have a positive impact on healthcare providers. I don’t think you’re going to see as many mergers as we’ve seen in the past. The hospitals that are in place will continue to operate well, unless we see something happen that we can’t control.
Technology is also going to be massive, especially AI-related technology. We need to position ourselves to be able to have access to that in terms of capital. So, I see a significant need for capital expenditures moving forward.
