Here's how one Bay Area healthcare CEO is navigating "challenging" times

Since Paul Lorenz’s arrival to Santa Clara County, things haven't been easy.

Lorenz came on as CEO of Santa Clara County's healthcare system in 2012 and since then has navigated Obamacare going into effect, a global pandemic that strained healthcare systems around the world, and acquiring three hospitals.

"I don't think there's one year that I've been here that hasn't been a challenging year," said Lorenz in retrospect.

Lorenz runs Santa Clara Valley Healthcare, a public system mandated to serve those on the margins – like those who lack insurance, are underinsured or are on Medicaid, the federal health insurance program for low-income individuals.

Since he took the helm, Lorenz helped build that into a public health behemoth with four hospitals, 15 health centers and multiple clinics. Currently, Santa Clara Valley Healthcare is the second largest public hospital system in the state, handles nearly half of all ER visits in the county, and operates one of only three burn and trauma centers between LA and the Oregon Border.

Now, it faces a new threat: The massive cuts to Medicaid in HR-1, the "One Big Beautiful Bill Act," have led to a billion-dollar shortfall in the county's healthcare budget. While Santa Clara County voters approved Measure A – a tax measure that could help stymie the financial bleeding — the system still faces hundreds of millions in shortfall.

We caught up with Lorenz to learn more about what it is like to navigate the healthcare system through the newest threat and what keeps him going forward in difficult times.

This conversation has been edited for length and clarity.

Q: How would you describe your mission and who you serve to someone who doesn’t really understand what you all do?

A: We are here to serve the entire community.

While we’re known as a safety net hospital, this system has grown to really benefit the community to a much larger degree than any other public system, and that is because health care is evolving, and we as a public health care system have actually made the right investments to support the community at a much greater degree.

We serve one in four residents in the county of Santa Clara. There’s no other public system that has that level of service to the community as a whole. We probably serve about 65% of the Medi-Cal eligible and a large percentage of the uninsured.

There’s only one system (in the county) that is here to make sure that we ensure that everyone, everyone in the community, has access to health care, irrespective of their financial situation.

Some systems don’t take (public) health insurance, but there’s only one system that will try to figure a way out to make sure that people in those situations have access.

As a public system, we don’t exist unless there’s a need in the community. Public systems don’t grow because we’re looking to make a profit or to generate revenues for shareholders, we exist because there’s a need in the community. And the fact that we serve so many in this community really says a lot.

Q: What’s the biggest challenge you’re facing right now as a system and as a CEO? How are you trying to address that?

A: I think what people obviously are hearing about are the impacts of [the Trump Administration’s landmark spending bill] HR-1, and those are significant. From a financial perspective, the dollar amount we’re talking about in terms of lost revenue to the system is $1 billion when HR-1 is fully implemented. That’s one quarter of our operating budget.

These are scary numbers.

As a public system, though, people need to realize that we’re not going anywhere, because there’s such need in the community.

The real question is, how do we take on this challenge to make sure that we sustain a system that continues to meet the needs of the community?

We’re very fortunate that the community has stepped up in a big way through Measure A. But that’s only part of the solution. Internally, we’re going to have to make some very difficult decisions about how we deliver care, how we become more efficient in that delivery of care, how we manage our costs better. And then, you know, the big thing for us is how do we get the state to realize public hospitals are the backbone of healthcare in the state of California.

We are really trying to figure out how to deal with HR-1 in a way that that sets us up to deal with the immediate issues, but then build a foundation during this difficult time so that when we’re beyond the challenges that we’re facing with the current federal government, we can really, really, take the system to a whole different level of service to the community. We need to deal with the situation that we have in hand, clearly, but we also need to think of what our future is going to look like.

Q: Measure A passed, but there are certainly those with concerns about spending money on a public healthcare system they don't use. What would you say to those in wealthier communities and those who rely less on this system but are still paying taxes to support it?

A: They themselves may be secure in terms of their health care coverage and be able to access care, but what about their neighbors, their friends, their children? What about all the other people in this community that makes it what it is today, right? When you think about Santa Clara County, we have to think about Santa Clara County as a community. The success that we’re all able to obtain is because of the people around us, right? So their well being, their health care, is just as important.

That’s my message to them: as a safety net hospital, their support of this system is really critical to the viability of the well-being of this entire county.

Q: What got you into this? Why do you stick around?

A: I’ve now been in healthcare for 36 years. And I’ve stuck to public health care for those years because each and every year that would go by, I would learn something new in terms of the way in which I can make a difference in the community. It started, for me, with ensuring that children have access to health care. But then I got to the point in which I realized that access to health care can have a dramatic impact on the community’s health.

Now, years later, I'm here. It’s just something I’ve grown to love, and through those years I’ve come to really appreciate that I get to work with people that have a deep, deep connection to my beliefs and how we can have an impact on the community, and that’s a big deal for me.

The physicians, the nurses, the staff that work here can work anywhere in healthcare, but there’s a reason that they’re here with us, because they believe in the mission, and they know we have an incredible impact on this community, and that’s something I’m proud of.

And when you get to engage with the patients and understand what an impact that you’ve had on their lives, it changes your perspective in terms of what you can do as an individual.

Q: Is there a particular moment or a particular story that sticks out to you as formative?

A: I can tell you that going out on a home visit with a public health nurse to visit a client that has tuberculosis and is under the care of the public system, when you go out and meet a 13 year old pregnant teen – at a very early age in my career – those are life-changing moments.

You know, I did not come from a wealthy family. My father passed away when I was young, so my mother had to raise four boys, and I was in the public healthcare system in the 70s.

I can tell you this, from my experience, some of the same issues that we're challenged with today in public healthcare, are very similar to the challenges that people were facing back when I was growing up: How do you access healthcare? How do you ensure that you know you’re receiving the support you need in order to succeed in life?

Paul Lorenz

Company: Santa Clara Valley Healthcare

Role: CEO

Age: 59

Hometown: Pomona, Calif.

Current City: Morgan Hill, Calif

Education: University of San Diego, undergraduate; California Lutheran University, graduate

FIVE FACTS ABOUT PAUL LORENZ

1. Competed in amateur off-road races for years in Baja California.

2. Loves to be outdoors, including mountain biking, trail running, skiing and hiking.

3. Is learning to rock climb so that he can enjoy time with his son, who is an avid climber.

4. Loves cars – he built a dune buggy and is rebuilding one right now.

5. In all his hobbies he says, "I love anything I can do with my family."

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