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Monday, Jun 5, 2023

CFO Balances Fiscal Health and Patient Well-Being

HEALTHCARE: Balboa United’s Shaun Edelstein Perseveres During Chaotic Times

South Africa native Shaun Edelstein said he remembers well immigrating to America with his wife, three suitcases and $2,700.

Now nearly 30 years later, Edelstein is CFO at Balboa Nephrology Medical Group, Inc. and Balboa United consortium of companies.

From those humble beginnings “to being the CFO of a big company …  grateful is the word I use,” said Edelstein, awarded CFO of the Year honors in the Private Company, Medium category.

“I have had every opportunity to succeed here,” he said. “We are living the American dream.”

Edelstein, 55, grew up in South Africa and attended Stellenbosch University, where he earned both a bachelor’s and master’s degree in economics.

A New Beginning

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He and his wife, Yael, arrived in the United States in 1996 looking to give their two children the best opportunities for education and success in America. Yael Edelstein had previously lived in the South where she attended a university in Tennessee and played tennis at the collegiate level.

After they landed in San Diego, where he had family already living, Shaun Edelstein not only discovered the myriad hiking trails around the county that he still traverses to this day, he also quickly found a niche in healthcare.

Along his career path were several years as executive director of Surgical Specialty Associates, California’s largest multi-specialty Independent Physicians Association with more than 250 surgeons. In 2001, he transitioned to the University of California San Diego, as administrator for surgical services and in 2010, joined Balboa Nephrology Medical Group as chief operating and financial officer.

Kiku Boyance of Balboa United nominated Edelstein for the award and said his work facilitating Balboa’s entry into one of the country’s largest Value-Based Care joint ventures to create a revolutionary new paradigm in clinical care model delivery has been a game-changer.

Under his leadership, Boyance said Edelstein has facilitated a partnership with CMS Medicare, entering into a substantial risk-based reimbursement model arrangement to totally reform the compensation model of physician professional fee clinical care even as the company has maintained fiscal strength and security in some of the most difficult market forces in the last five decades.

Edelstein has restructured and refined Balboa’s entire financial portfolio of companies to withstand the negative economic market forces, he consolidated office locations and Infrastructure to gain efficiencies, he renegotiated payor contracts and lease holdings to create revenue increases alongside expense reductions, he restructured the company’s IT platform management and cost to cater for a changing workforce and work environment, and he helped maintain strict workforce efficiency to streamline Balboa’s effort and associated cost burden.

But even with all that, Boyance said Edelstein, the treasurer for ReMend, an organization that empowers those with kidney disease make informed decisions about their kidney health, brings much more to the proverbial table.

“While one may not expect a CFO to have the empathy Shaun Edelstein does, his connections to the individuals of Balboa are deeply appreciated,” Boyance said. “Shaun continuously cultivates the well-being of the staff and physicians at Balboa United and Balboa Nephrology while tending to the fiscal health of the practice’s business enterprise and medical group. He consistently demonstrates leadership at Balboa United and in our renal community.”

Fingers on the Pulse

Edelstein said gone are the days where “a CFO is a numbers guy who sits in a room and crunches numbers.” He said now CFOs are often in charge of HR and that the work they do “is so embedded in the day-to-day, with our fingers on the pulse of the organization.”

Edelstein, on the planning committee for Balboa’s sponsorship of last summer’s Transplant Games of America held in San Diego, also recently received the Distinguished Practice Administrator Award for the USA at the Renal Physicians Association’s national conference.

Edelstein backs away from taking credit for any honors that have come his way.

“It’s one person standing there with an award,” he said. “But it’s a team of people that stand up there with you. One person may lift the trophy but in no way is that indicative of the recognition received. It’s absolutely a full-blown team approach and everybody’s passion to accomplish those great things. Our business is about the people we serve. Our mission of ‘Patients First’ is at the core of every single person here.”

After receiving his award, Edelstein took some time to answer a few questions from the San Diego Business Journal.

Q: At what stage in your life did you set your sights on the CFO’s office? What put you on the path to getting there?

A: As probably most CFOs, our paths to the office started in many diverse ways. My wife and I emigrated to San Diego from South Africa 27 years ago, and I have been fortunate to have incredible opportunities to work in healthcare leadership along the way. For my first 13 years here in San Diego, I worked more in clinical operations, management and leadership roles primarily serving at UCSD in the Department of Surgery where I was responsible for directing surgical services for 10 years. So my exposure to the real nitty-gritty of the finance arena was actually quite limited at that time.

However, when I joined Balboa Nephrology Medical Group 14 years ago, we were a small organization back then and at that time I was thrust into the “you do everything” role. Talk about a leap into the deep end of the pool! I was responsible not only for finance and accounting, but also HR, operations, clinical strategy, legal, IT, etc.

Over time as our organization grew to more of a conglomerate of multiple companies and corporations, we had the ability to invest in staff and infrastructure to meet the demands of a growing and dynamic organization. When I joined originally we had 25 staff members, and today we’re over 10 times that amount. From one small medical corporation those many years ago, our group has now 17 corporations, joint ventures and LLCs, so the complexity of running the support platform needed has been in direct correlation to our rapid growth.

About eight years ago my focus shifted more so to the financial, legal, HR and revenue cycle aspects of the companies, as the operations and clinical portions needed specific and dedicated leadership and clinical expertise. So at this time I segued into the CFO role holding this unbelievable opportunity and position.

As I look back over my career, I sometimes do think how past decisions could have changed the direction of where I am today as a CFO, but there’s absolutely nothing I’d go back and change! I’m so grateful to have the support of incredible mentors along the way, staff that have stayed with me (many for over a decade) and of course my family as a pillar of strength encouraging my journey over the years.

Q: Think back over your career. Up to this point, what is the accomplishment you are most proud of?

A: I’d say over my career I’m most proud of my internal compass always maintaining the direction and “balance” of my position of fiscal responsibility vs. providing the absolute best care to our patients. I think in healthcare especially, company leaders can lose their way as they try to satisfy shareholders, managers and other stakeholders needs. Over time their fiduciary responsibility tends to be weighed by pressures that actually influence a shift away from providing paramount care, to one of continuing fiscal advancement for shareholders. The key here that I always determinately striven to achieve, is to accomplish both, by driving financial investment decisions that directly assist and contribute to the platform of quality care delivery (great for patients) yet at the same time create efficiencies in cost that the shareholders can recover down the P&L in profitability.

This is far easier said than done, as it mostly involves some form of risk (value) based contracting, but it’s something our organization is fully invested in, and our actions over the past 15 years have been driving this direction of care reimbursement model to great successes. I hope that in the future I can look back and say that we have led the charge to recalibrate the traditional fee-for-service model of healthcare delivery, and then (only then) will I be most proud of that accomplishment.

Q: Of all the economics and business issues in the news right now, what are you following with most interest and why? Which one most directly affects your organization?

A: One could write an entire book on the question posed, especially in light of how the healthcare industry was shoved into a tumble dryer of chaos on February 2020 when the COVID-19 virus changed our world forever. Even before then, the ability for the Centers for Medicare & Medicaid Services to adequately compensate medical providers was under huge strain trying to balance a zero-growth federal goal in Medicare spend to an out-of-control ballooning cost! When COVID hit, the true ability of our healthcare infrastructure to handle adversity was tested, as we all know … to some success, but great failures in other. One of the lesser-known effects, is the rapid and continuing decline in qualified graduating physicians into the system, combined with an accelerating withdrawal and retirement of Baby Boomer doctors and nurses. This double pronged dagger in the heart of healthcare will be felt by many generations to come. With rising costs of tuition and debt, as opposed to (an almost) arbitrary increase in physician compensation by CMS over the past decade, no wonder our country is left with less and less young professionals opting for a medical career. These decisions in Washington weigh on our industry every day, and affect every decision we make, even in a small corner of Southern California.

Q: What is the next big step your company hopes to take? If appropriate, tell me what challenges you face in getting there.

A: To change the course of care, and to alter the paradigm of healthcare compensation associated with that, will need a gargantuan effort by many parties. Fifty-plus years of doing things relatively “the same way,” while the rest of the world has matured, has left healthcare in the dust. Our company is an integral and substantial partner of CMS Medicare to make that change, as daunting as it may seem. Last year we began the first steps to a multi-$100 million joint venture with Medicare to finally change our approach and model to healthcare delivery … and be compensated on the quality it delivers, not the quantity. Challenges we face are change, change and change for not only ourselves but everyone in the care delivery circle. Change often means more resources, which means more dollars, but we are finding ways to partner with industry to balance our higher fiscal needs with the new models to the advantageous fiscal results derived from Value-Based Care. This is by no means a quick fix solution to decades of old outdated methodologies, but at least our organization is progressive enough to start steps toward a better delivery for quality care for our patients. Mission One at Balboa is always “Patients First!”


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