The buildings Jim Shmerling, DHA, FACHE, has helped put on the map are considerable. They include two children's hospitals built from scratch -- one in Colorado and another in Tennessee -- and several additions. But as he prepares to retire at the end of 2025 after a decade in leadership, ribbon cuttings are not top of mind when he reflects on his accomplishments.
"It's not the buildings that I'm most proud of, it's the people that I've worked with," Dr. Shmerling, president and CEO of Hartford-based Connecticut Children's, told Becker's.
"There are, right now, at least six people that are CEOs around the country of children's hospitals who worked with me before. My true legacy is helping the next generation of leadership in children's hospitals and affecting that next generation, because they'll affect kids' health going forward, and I know that it's being left in good hands."
Dr. Shmerling joined Connecticut Children's in October 2015 from Children's Hospital Colorado in Aurora. Earlier in his career, he held leadership roles at other organizations, including Monroe Carell Jr. Children's Hospital at Vanderbilt in Nashville, Tenn., and Le Bonheur Children's Medical Center in Memphis, Tenn.
He has seen Connecticut Children's grow from a standalone medical center to a pediatric health system with more than 40 locations across Connecticut, Eastern New York and Western Massachusetts. In addition to the pride in the people with whom he has worked, he shared how his organization is preparing for Medicaid funding challenges and opportunities that come with artificial intelligence.
Editor's note: Responses were lightly edited for length and clarity.
Question: As you prepare to step away from your role, what accomplishments at Connecticut Children's are you most proud of, and what do you hope will be your lasting impact on the organization?
Dr. Jim Shmerling: This is a tremendous health system with great potential, and helping realize that potential has been something I'm very proud of, building scale. It's a great children's hospital, but comparatively, it's small. Look at other children's hospitals across the country, and that makes it difficult to build scale and to have economies and be efficient. And so we needed to build scale, and over the last 10 years, we've been able to grow and expand our services to cover the region now. The completion of the new patient tower will increase our bed size by 30%. We'll bring new services and expand existing ones. It positions the institution to really thrive in the coming years.
Q: What leadership lessons have you learned during your time at Connecticut Children's, and how have they shaped your approach to running a pediatric health system?
JS: I start my perspective as a parent and now as a grandparent, and what would I do for my own kids. You're dealing with very smart people and a very diverse group of team members, and trying to build consensus and rally around the common denominator that we all have, which is the mission, and keeping that in focus, has been critically important to our success. There's a lot of diversity of opinions about whether it's politics or it's the way we deliver care, how we prioritize investments in pediatrics, but when we always start with what's in the best interest of children and families, it brings people together, and that's been a key to success.
Q: What do you see as the biggest challenges ahead for Connecticut Children's?
JS: In Connecticut, the difficulties with Medicaid funding is an extreme challenge for Connecticut Children's in particular. It's the whole hospital industry, but for us particularly, because over half our patients are enrolled in Medicaid, as Medicaid goes, so goes Connecticut Children's.
When we're not recovering nearly what it costs us to provide care and the Medicaid enrollment keeps going up, it's an existential crisis for us. The potential for Medicaid to be losing funding from the federal government puts even more pressure on the state. And then, of course, it rolls downhill to us from the federal level.
Some of the executive orders and policies are in direct conflict with our mission. We're grappling with how to care for children, including transgender patients, without violating federal law or risking our funding. It's creating moral, ethical and mission-related dilemmas that could become existential challenges for us.
Q: You mentioned Medicaid being a major factor and also touched on transgender care. Are there any specific steps you're taking now to prepare for potential Medicaid cuts or other funding challenges, or measures you've already put in place?
JS: The first thing is you have to educate before you can advocate. And for us, educating the commissioners that are running the programs to understand the needs of the children's hospital. On the one hand, the state doesn't want hospitals to go bankrupt and then not be available to provide services. There's also an aversion to more mergers which are in direct conflict, because that's where we would have to go if our Medicaid funding got cut. We're already barely breaking even, maybe losing a little bit of money now, and it's getting worse. We haven't had a rate increase in 10 years, and so if we were looking at cuts, that would accelerate our demise, and force us to look at other alternatives.
I believe in my 45-year career, I've worked in every legal structure there is for a children's hospital. The best for children and for delivery of care to kids is in an independent children's hospital where all of the decisions are what's in the best interest of the child and the family, versus competing for resources that are going to adult services that are more profitable.
Q: Children's hospitals are facing financial pressures, workforce shortages and rising patient demand. How has Connecticut Children's navigated these challenges, and what strategies do you believe will be key to long-term sustainability?
JS: One of the things that we've done, that we are very proud of, is to try to create a working environment that people want to be a part of. Our turnover rate is below 10%. There is a shortage of nurses and respiratory therapists and OR nurses and techs and almost all the disciplines, even in the trades, there are shortages, but we're finding that we're able to recruit. Retention is a big priority of ours, and how do we create that work environment, whether it's salaries or benefits or the culture that we create? I'm very proud of what's happening here. We still have the same challenges most hospitals do, but we're not nearly as extreme; I'm most worried about funding issues and then the policy issues that are coming down.
Q: Connecticut Children's recently expanded its partnership with Xerox to introduce AI-driven solutions into pediatric healthcare. How do you see AI shaping the future of care delivery, and what excites you most about these new capabilities?
JS: Having the ability to be predictive and be proactive from a clinical perspective, from an operational perspective. The one that excites me is how we can improve care. Children who have cancer, we've come a long way. Some forms of cancer used to have a 90% mortality rate, [and] are now 90% survival, and that comes through research and innovation. And over the last 20-30 years, we've made major strides. But what happens with these drugs that we're using is there aren't longitudinal studies. So what's the impact 15-20 years later, if any? And what we're finding now is those children who are 3 or 4 years old who survived cancer at the age of 19, 20, 21 are developing significant heart conditions and secondary to the drugs that they were given to save their lives. But now we're creating a whole new problem, and it can be really a critical issue. We've identified that phenomenon, and now, using AI, we can say, what are the factors so that you can identify which children are at greatest risk for those complications? And if you've identified that on the front end, we can either alter the therapy or know to monitor it before it becomes a problem. It will save more lives.
On the operational side, we have a child who's coming in with a particular issue, and we know, but when they're in the ambulance and they're calling in and saying they're coming in with these symptoms, with AI, we can say, when we hear those symptoms, these are the things that usually ends up being these are the supplies, the supplies, the equipment and the people we need to line up. So rather than wait for the patient to get the ED, do that evaluation and then start therapy, we can have everything ready to go before they even arrive at the ED. So it improves care, we can get the patient seen much faster, we'll have better outcomes.
And then the other from an operational standpoint, is in pediatrics, there's a lot of fluctuation in our patient census. And in the winter, we see a lot of pulmonary disease. But when we say the winter, it could start in October, or it could start in January, and lining up the resources, we can go up 30%, 40% in our patient volume, and it's hard to react in real time to get enough staffing. But if we can predict when that's going to occur day by day, we can staff more appropriately and be prepared. It allows us again to be proactive and be more efficient in our resources, because we can staff up in November, waiting for that significant influx. If it doesn't happen until January, we've got two months of staffing, excessive staffing that we didn't need because the patient volume wasn't there, but we need them to be there just in case. Well, now we can do this predictive modeling with pretty significant accuracy. Know that, all right, the census isn't going to be at peak census until January. Then we can staff more appropriately.