40 Service Lines, One Hospital
Jay Carmichael, CEO and President of Horizon Health, on growing a rural Illinois critical access hospital from 200 employees to more than 900, running 40 service lines most critical access hospitals never attempt, and where AI actually fits.
Key takeaways
- Horizon Health has gone from roughly 200 full-time employees to more than 900 in five years, pushing toward $150 million in net revenue across 40 service lines.
- Overstaff through a technology transition rather than understaff it. The savings from running lean during a go-live are never worth what breaks.
- Complementary beats competitive: Horizon partners with larger tertiary hospitals on service lines like urology and cardiology instead of going head-on against them.
- As the second largest employer in its county, a rural hospital is an economic engine first and a care provider second, the reinvestment stays local.
- The first AI wins are unglamorous: an ambient listening tool already surfacing social determinants of health that were being missed, and cutting hours of manual work out of building quality dashboards.
- Rural health transformation funding is welcome and nowhere near the scale rural hospitals actually need.
Most conversations about rural healthcare start from scarcity: what the hospital cannot offer, which patients have to drive two hours, which service line closed last year. Jay Carmichael runs the counterexample.
He is CEO and President of Horizon Health, a critical access hospital in rural Illinois that has grown from roughly 200 full-time employees to more than 900 in about five years and is pushing toward $150 million in net revenue. It offers 40 different service lines, a number most critical access hospitals would never attempt to staff in house.
His path there did not start in hospital administration. Jay sold technology at Cerner before moving into hospital operations, then into Horizon’s strategy seat. Coming from the vendor side of the table shaped how he now buys, deploys, and staffs technology.
What selling technology taught him about buying it
The lesson he carried over is about implementation, not procurement. Technology transitions fail on staffing, and the instinct to run lean through a go-live is exactly backwards. Jay’s approach now is to deliberately overstaff during a transition, extra hands on the floor, extra coverage at the desk, so the people doing the work have room to learn a new system without the schedule collapsing around them.
It is a more expensive plan on paper and a cheaper one in practice.
The shift from COO thinking to CEO thinking
Year one in the CEO seat is not a bigger version of the COO job. The operating role rewards a bias toward fixing what is in front of you today; the chief executive role forces the question of what the hospital should look like in five years and which of today’s decisions foreclose that.
The move Jay describes is from solving problems to choosing which problems are worth the organization’s attention.
Growing without losing the know-your-neighbor part
Quadrupling headcount is the fastest way to lose the thing that makes a community hospital work. Patients in a small county are not anonymous; the person at registration knows the person walking in.
Holding that while hiring hundreds of people is a culture problem, not an operational one, and Jay treats it as the real constraint on growth. Every new service line has to arrive without turning the hospital into somewhere that feels like a system.
The hospital as economic engine
Horizon is the second largest employer in Edgar County. That reframes the strategy entirely: adding a service line is not only a clinical decision, it is a local employment and reinvestment decision. Money that would otherwise follow patients out of the county to a larger metro stays in it.
This is also why the partnership posture matters. Rather than compete head-on with larger tertiary hospitals, Horizon looks for complementary service lines, urology, cardiology, where a partnership brings specialty care into the county instead of asking patients to drive to it.
Where AI fits today
Jay is neither dismissive nor breathless about AI, and the two places Horizon has started are both concrete.
The first is ambient listening in the exam room. Beyond saving documentation time, the tool is already surfacing social determinants of health that were previously getting missed, details a patient mentions in passing that never made it into the note.
The second is quality reporting. Building quality dashboards is hours of manual assembly, and an early effort at pointing AI at that work is aimed squarely at giving those hours back to the people responsible for the measures rather than the spreadsheet.
Neither is a moonshot. Both are the kind of thing that compounds.
Checked in before you walk through the door
Asked where this is all going, Jay’s answer is about accountable care and chronic disease management, a hospital paid to keep a county healthy rather than to see it in an exam room. The experience layer he describes to get there is borrowed from outside healthcare entirely: a visit that feels like a mobile order at a drive-through, where the check-in already happened on your phone and walking through the door is the last step, not the first.
The part he is skeptical about
He closes on funding. Rural health transformation programs are real money and, in his read, nowhere near the scale of the gap they are meant to close. A critical access hospital cannot build 40 service lines on grant cycles. It builds them by running the operations well enough to reinvest, which is the whole story of the last five years at Horizon.
Transcript
Read the full transcript
One of the examples I like to throw out there is Illinois's got, you know, eight or ten intermediaries to be responsible for releasing the funding. One of them has got fifteen million dollars allocated to healthcare workforce enablement. Ninety-seven hospitals in the state of Illinois that are qualify for that those funds. If I divide fifteen million by ninety seven, that's roughly a hundred and fifty thousand dollars. So I gotta go build a sustainable healthcare workforce and create pipelines for future healthcare workforce with $150,000 doesn't really equate to substantially transformational efforts.
You're listening to the Pretty Good AI podcast. Today's episode is about one of the biggest challenges in healthcare today. How do we ensure rural communities continue to have access to high-quality care while hospitals face staffing shortages, financial pressures, and growing patient needs? Our guest is leading one of those organizations through significant growth while investing in technology, people, and the communities they serve.
Building AI for healthcare has really taught me that the technology itself isn't the answer, and that the best healthcare organizations and practices sort of use technology to strengthen their relationships, not necessarily replace them.
And so I think one of the reasons I'm excited about this conversation is Jay and his team at Horizon Health are a growing healthcare organization in a very rural environment and really having to serve a really wide community across eastern Illinois.
With a background spanning from the early days of Cerner before it became Oracle Health, hospital operations, and now executive leadership, Jay really brings a unique perspective on healthcare technology, operational excellence, and building stronger rural communities that his organization supports.
Let's get into it.
From you know studying economics to doing some sports management and then health IT, and now leading one of the fastest growing sort of rural health systems in Illinois.
And so today, kind of talking about a bunch of things: rural health care, leadership, AI, and you know, what it takes to grow without losing that personal relationships that, you know, really make Community hospitals so important.
Sure, yeah, absolutely.
I've been in my role now for a year and a half, and prior to that I worked for a a two hospital community system in South Georgia, and so a little bit similar in the sense we were serving a rural community, but a little bit different because of the way we were structured and the services that we offered. And so it's been interesting sitting at this juncture league and organization that went from, you know, five years ago 200 FTEs to now we're over 900 FTEs. you know. pushing 150 million in net revenue and 40 different service lines that you wouldn't typically see in a critical access hospital, like spine surgery and urology and bariatrics and orthopedics, and those are all services that traditional critical access hospitals usually contract with a partner for, but we employ all those specialists and trying to deliver that to not just our home-based community but the the surrounding area, the Wabash Valley and how we can offer those services to some of our surrounding communities. So it's been pretty interesting to be at this juncture and be leading the ship from from what has been instrumental growth over the last several years.
I love it. And and going back a little bit before you sort of got into the sort of healthcare management side, you know, you were, you know, kind of in the belly of the other side, sort of selling into healthcare, you know, working at Oracle, you know, on the Cerner product line. Like tell me about that sort of what you sort of saw or learned from that experience that sort of translates into what you've done in your last couple of roles.
Yeah. so it it it was actually my foray into healthcare.
Yeah.
I wanted to be in sports management, I wanted to be a sports agent and was actually told by my biology professor that I needed to stick to business and stay away from the sciences. So I didn't think a career in healthcare was really worthwhile or gonna be possible for me. But I got in and I got to see healthcare at a 30,000 foot view and how technology can really help drive some demonstrable improvements in workflows and data sharing and efficiencies. So it was really cool to be a part of Cerner at that that realm.
So I in my course of my my journey there at Cerner, I got connected with my former employer in Georgia and built a relationship. And that's how he recruited me away, But it also had its challenges, right? You you sell a product that you think is gonna work a hundred percent of the time and you flip sides and now you get to see the good, the bad, the ugly, and everything in between.
I really got to see the the negatives on some of the technology infrastructure that is deployed out there.
What technology mistakes did you see that organizations were making back then and how does that inform the way you think about technology today for yourself or your own organization?
Yeah, so I I think it's a line has stuck with me or kind of a a methodology is is people, processes and technology. The technology is usually designed to work in one specific, you know, sandbox, if you will, because that's the way the computers are are coded or are are designed to work. When you throw in people who are hesitant to change or afraid to change because it's the way we've always done it, and then you you throw in processes, which people are in healthcare specifically, healthcare workers are great at coming up with workflows that circumvent the technology because it's gotta work a certain way in order to check a regulatory box or to check a a workflow box. so I think what what has stuck with me is ensuring that those are aligned and really putting the emphasis on change management for people and for processes that, hey look, I understand this is the way we've always done it. It doesn't mean it's always the correct Correct way to do it, or doesn't mean it's always the best way to do it. And sometimes we have to adapt our processes to fit within the technology. And then the the last piece is the people. Change is inevitable. Healthcare is full of change. We have got to be extremely agile in order to be really effective and efficient. So we have to bring our people along with change. So we have to introduce the topic, you know, well before it's even time to change so they can get comfortable with how that change or how how that new process is going to impact their day-to-day workflow.
You I I think those those have been kind of the key things that I've really tried to focus on and you know, I think training, over you know, staffing up to ensure, hey, if you need fifty people to support the technology system, you may want to go to fifty-five or fifty-six just because you don't know what the legacy systems are gonna need versus what the new systems are gonna need.
Thinking about the healthcare side, you know, now that you've become kind of the CEO and president of Horizon, you know, what does that sort of look like in day to day? Like what are the been the priorities kind of walking into the organization and how has that shifted through your first year?
Yeah, so the first year I would say I really focused on listening tour and trying to understand the organization. also had to, you know, roll out a new strategic plan with strategic initiatives what we're gonna go tackle and identify what are those key priorities we're gonna hit.
We've got to have a good technology platform that supports us from an electronic medical record perspective. Our current one just is kind of fallen short where maybe some other vendors out there in the market would be a little bit more advanced advanced with what they offer. And then laying the foundwork the groundwork for what does growth look like for a critical access hospital. We've got large tertiary facilities thirty minutes north, south east and west of us. And How do we go and find our niche in the market to be able to offer complementary services to services that they are are not offering?
What surprised you most during this first year?
I you know I was a COO in my last role, so I was really in the day-to-day, the nitty-gritty, the the weeds of the operation. I think what has surprised me the most was how much I can't necessarily do that every day. I've gotta be and my board expects me to be, you know, the strategic leader in in growth and in our initiatives and setting the path and charting the course for the next 10, 15, 20 years of the organization.
And in order for me to do that effectively and to be able to support the organization, I can't be in the day to day every single day. Certainly there are times where, you know, there's a dumpster fire going on and it takes all hands on deck to solve the problem. But for the most part you know, building and and stretching my my leadership and strategic growth muscle less than my operational muscle. I still have that muscle that I can fall back on and and really push and challenge the team. But if I'm in the day-to-day stuff, I need to look at at at what I have and and the systems and processes we have in place. So I think about it as setting the course and charting the course, but also I I knew that was gonna be a challenge. I guess I just didn't know how much of a challenge it was gonna be. I mean it was almost instantaneous. Hey you're the CEO, now you get hit with a hundred million questions on What do you want this to be? How do you want this to be? And it's like, wait a minute. I don't need to be making those decisions. I d I think that's some that's some of my executive team. They need be making some of those decisions and I need to be focused on the future and what h what the road holds for us ahead.
Yeah, I mean Horizon's grown a lot, I mean, dramatically over the past several years. And how do you continue sort of growing that sort of without, you know, losing that sort of know your neighbor culture that's really important in rural healthcare? And at what point does growth become difficult or challenged when you sort of trade those two off?
The experience that we want you to have when you walk in the door as a patient, as a guest, as a future employee, to how we treat our people and how they interact with each other and how they treat each other and ensuring we don't lose that culture is going to be imperative to our long-term sustainability. We've got phenomenal quality scores, we've got a great patient experience score and story that we can tell, and we've got some really engaged team members who are emphasizing. who are engaged and and invested in making the organization better. So how do we continue to prop them up so that they've got the tools and resources they need in order to continue taking us to the next level? You know And then how can we partner with those larger tertiary facilities to maybe create some better referral patterns or create some additive services. So I think about, you know, our urology services. We have a a great urology team and a great urology service line and I would say probably arguably one of the better service lines in a competing market. And so how do we go support that market with urology services without detracting from our existing culture and our existing workforce and our existing engagement, but also growing our footprint and our market share in those areas, which is what the community wants and needs, right? Because that's everything we see from the data points. So how do we go partner with those larger organizations, say, hey look, we'll bring the urology services to bear, but we're gonna need you to support us in a different different service line that you're an expert in. So I think of cardiology services.
Right now if you're having a STEMI or a s serious cardiac event, you can come here, we'll stabilize you, but we're gonna ship you to the next highest level of care because that's where the expertise is. So how do we create those partnerships where we'll provide urology services, you provide cardiology services, and how do we create that symbiotic relationship between the two institutions?
Yeah, you've talked a lot about like healthcare being like one of the biggest economic drivers in these rural communities. I mean, many times the hospital or health system is the largest employer in many of these l smaller communities. Like, what does that actually look like? And how do hospitals like Horizon really, you know, kind of move beyond providing care for the community?
Yeah, So we're we are the second largest employer in the in the community in Edgar County. we're a heavy agricultural footprint. Got a lot of families that have had generations of farmers here. we have a lot of local businesses as it relates to like restaurants and shops and coffee shops and all those things. and and we have an onus to to give back to our community. So where it makes sense, we try to leverage local contractors to do construction projects for us, local IT vendors. to help and support network infrastructure or IT assessments, things of that nature, Every dollar that we spend locally, we hope, gets reinvested into our local community and and spins off another job or another economic benefit for our our community. And then we look at how do we solve and we don't have an answer for it just yet, but how do we solve some of the food desert and the food s food scarcity problems? How do we connect the dots for some of the local agricultural farms and and bringing those you know, those those vegetables to a local food market and a food a food option for our our patients in their community.
So it's kind of multifaceted, but I think that healthcare plays a huge role in that. And there's all kinds of studies out there that, you know, if a healthcare if your community has healthcare and a healthcare presence, it's more likely to succeed and more likely to be sustainable. So how do we continue to ensure that we're sustainable for the long term? You know, our I tell our community members, I tell our our team members Our stakeholders is the are the community members. We're not trying to return any profit to Nashville or any other large pro for-profit entity, we're trying to return our our funds back into the community. So whether that's you know healthcare screenings, whether that's community events, like this Friday is actually our back-to-school bang where we give away free school supplies and we have health screenings set up for that. And that's imperative to ensuring that our our our community is feeling the love and support from our our organization.
super cool. And I think that's probably really gratifying for the team members to get to support that as well as as you think about that. Shifting gears a little bit, as we talk about AI and technology, like a lot of technology is always like last adopted in rural areas, right? I mean, tick tech like a lot of the last waves, you know, whether it's a cell phone or the internet, you know, it took longer to get high speed internet into rural communities. as you look at that for your organization now with AI, like how do you think about that? And what role do you think, you know, kind of AI plays in in it for an organization like yourself? And like when you look at challenges, is there certain ones that you look at that are more apt to sort of test or try AI on versus others?
Yeah. so I think AI is the buzzword around the industry now, right? Like every vendor's got an AI widget or tool that they want us to try and it's kind of overwhelming, to be honest with you, 'cause you know, how do you how can we effectively deploy this? while keeping our cybersecurity protocols in place and and keeping our network safe and our patients record safe. but secondly, you know, the the advent of AI, all the all the talk out there is that it's gonna cut jobs and it's gonna reduce workforce and all that. And I don't necessarily believe that. I I think and I view AI as a tool to help you know, get some of the minutiae stuff out of the way so that we can leverage our team members and the actual bodies doing the work to actually function at their highest level. So get the nurses back to the bedside, get the physicians looking at the patients face to face, get the the managers and directors using AI to maybe help with research, maybe it's help writing policies, maybe it's doing some complex data analysis that they don't necessarily have the time to do or the expertise to do.
And maybe if we can train them to prompt AI efficiently and effectively, we can get to the data points we need to in order to make better, more precise decisions. So we're leveraging AI right now. We're kind of dipping our toe in it. we've got Dax AI Being leveraged by a lot of our physicians and mid-levels APPs from just ambient listening. So they walk in, they they press record on their phone, obviously with patient consent, and it's documenting all the visits. And one of the products we've seen as that, or one of the the outcomes of that we've seen is better documentation, better notes, better follow-up, better care management as a result of that, because it may pick up on: hey, this patient has a social determinant of health issue that we did not necessarily pick up in our screening. So now we can engage our care management team to go out and help that patient. identify some resources that are available in the community or that we have available within our organization that can help them overcome an obstacle that they have. So we've been doing that now for a couple of years and it's been extremely beneficial. How we're doing it on the professional side, I think, is we're looking at a platform that is you you take all the AI chatbots and put it into one chat bot and it is supposed to help you determine which chatbot is the most efficient Efficient and effective at running that prompt you're asking for.
And we're really starting to scratch the surface of setting up the guardrails because you can prompt yourself to death, you can prompt the AI agent to death.
You can look up at the end of it be like, my goodness, I've created a monster. So we're trying to establish guardrails for our teams to say, here's the effective use of AI and try to put some use cases in there. So one example we're exploring right now is our quality dashboards that we report out.
It is a conglomeration of a multitude of reports that we get from CMS, that we get from our REHR, from the Illinois Department of Public Health, and blending all those together to get us to our KPIs that we track from a quality perspective. And right now, it takes hours for our quality team to plug and chug the data into Excel.
Yeah.
So if we can create a way to say, here's the raw data.
And here's what I'm looking for as an output, and here's how they match to each other these data points on this raw data. Now run that analysis. We're hypothesizing that that'll save at least an hour or two of our quality team's work effort so that instead of being data entry clerks, they can be o focused on actually helping us design processes to improve.
And further enhance our quality outcomes. And so those are some things that we're exploring and tiptoeing into. but the you know, the challenge is AI governance, data governance, guardrails on what should and shouldn't be used, it should be used for, to ensure effective effective use of it. So I'm
Yeah.
excited about where that's leading us.
Makes sense. as we sort of wrap towards the close, would love some of your views on the future. Like what what do you what excites you the most, I guess, in sort of the future of rural healthcare?
But how do you think about funding being the sort of catalyst to allow you to go grow the way you guys want to grow?
Yeah.
I I wish I could say I see some relief on the horizon as it comes to Medicare, Medicaid funding, but I think that's probably a a moot a moot point, right? I think there's gonna be some challenges there. we've seen some pretty beneficial results from our participation in an accountable care organization, an ACO, and a lot of that is around care management and chronic care management and identifying those patients ahead of time to keep them out of the hospital which sounds kind of counterintuitive. Why does a hospital want to keep you out of the hospital? You know, but I think it's all around leveraging a patient's condition and diagnoses and putting them in the appropriate level of care. And so traditionally people use the emergency room as their primary care office. Well if I can circumvent that and get you to see a primary care specialist or a primary care physician ahead of time, we might be able to identify some of these problems more frequently in and you know, more quicker than waiting till it gets to a point where you have a disastrous outcome. So I'm excited about the work we're doing on the accountable care side of things and really that preventative and chronic care management aspect of it. I'm excited about our technology roadmap. You know, we're currently undergoing EMR evaluations and trying to find the the next EMR that we're gonna go utilize and the tools and resources from when I was at Cerner to what's available today with the the vendors is mind boggling and
In crazy. Yeah.
I think it'll allow us to really leapfrog where we're at today currently. You know I have this vision and this idea that I want to get us to a point where technology identifies you when you enter the parking lot. You know? Like Chick-fil-A has got, you know, if you order something on a mobile app, it tells you, hey, I see that you're here in the parking lot. Would you want me to start your order?
Like healthcare should be the exact same way. Hey, I arrived in the parking lot. Well, welcome, Mr. Carmichael. We're glad you're here. Well,
Check me in. Yeah.
yeah, we look forward to seeing you in pod A with so and so. And we've already got you checked in because you signed up ahead of time because we prompted you. They're expecting you. They're already got orders ready to rock and roll, and they're looking forward to seeing you. And that that's how I see technology kind of playing out. And with the advent of AI and how AI is coming in, I think that'll help significantly. but we have to have the information. infrastructure to do that and support it. And then, you know, organizationally, we have some interesting opportunities in the market here where I think we can go and be really additive to our tertiary partners.
You know, there's a lot of talk about the rural health transformation program, the fifty billion dollars that's going to rural health and I'll tell you that it's I'm a little skeptical that it's really gonna be as transformational as they say.
One of the examples I like to throw out there is Illinois's got, you know, eight or ten intermediaries to be responsible for releasing the funding. One of them has got fifteen million dollars allocated to healthcare workforce enablement. Ninety-seven hospitals in the state of Illinois that are qualify for that those funds. If I divide fifteen million by ninety seven, that's roughly a hundred and fifty thousand dollars. So I gotta go build a sustainable healthcare workforce and create pipelines for future healthcare workforce with $150,000 doesn't really equate to substantially transformational efforts.
So I'm cautiously optimistic but also cautiously you know concerned about where the rural health transformation program funds go and how they're allocated. But those are some things that I'm excited about and and where we're looking forward from a a long-term roadmap for Horizon.
I love it. Jay, this has been exciting. Where can listeners find more about you or follow you online and and then obviously about Horizon Health?
Sure, so they can unfortunately I'm not super social media savvy, so LinkedIn's probably the best place to find me personally.
But they can check us out at myhorizon dot org to find out more information of our comings and goings. And then we're obviously on all the social medias, Horizon Health, Instagram, Facebook, all the things and they can follow us along there. And every once in a while they may see some funny videos of how I've gotten engaged with our our team members and and our initiatives on the social medias. So
Awesome. We'll throw all the links in the show notes. Jay, this has been incredible. Thanks so much for joining us.
Yes, Kevin, thank you for having me.
Wow, that was great. I think the to me, this journey of sort of working on the EHR side to then working on the operation side really provided a perspective that, you know, many times technology doesn't become the only solution. And it's really that partnership with technology and people. And I also think it was interesting where Jay Jay talked about how, in some cases, for these technology transformations, you have to actually overstaff or upscale staff worker. staff and team members to be able to support the sort of transition from a legacy technology to a to a modern one. And I think that's a unique perspective that a lot of people miss where they think initially that, hey, AI is going to replace all the team members and and really replace humans. But in many cases, you're sometimes adding humans because you're able to, they're able to do a lot more and you're able to get a lot more done with technology. top five takeaways.
I think one was just Horizon's growth curve. I mean, 200 FTEs to now over 900, you know, 150 million in net revenue, and 40 different service lines. I mean, he talked about urology, spine, bariotrics, ortho, just so many different things that you would not expect at a sort of critical access hospital that's in a rural environment like Horizon. Two, I think this vendor side lessons, right? He really learned, you know, from the days working at Cerner.
How technology sort of was sold and brought to practices, but now really understands from the operation side that many times the technology doesn't solve problems, but actually creates new ones. And so being able to understand and pick vendors that work well is a pretty critical skill for operations. The upshift from a COO, sort of living in that day-to-day operations, to that CEO shift where now you're thinking strategically and how do you think about the vision for really growing the hospital overall? And four.
It's like, how do you grow such a community-based organization, but still keep that feeling of like know your neighbor and really tied back into the community? And how are you understanding that job number one is really bringing services to the community and reinvesting the profits or the funds that they do have access to back into the community? And then finally, this thinking of AI as a capacity unlock and not like, hey, AI is gonna bring me headcount cuts. And so many times.
We've seen this where you roll out AI and you you you're allowed to shift the team members to higher value work. And I think that was something that, you know, Jay and the team have s have experienced themselves and a really big part of their sort of future roadmap.
Really good conversation overall. And I think if you're leading a rural hospital healthcare practice or just thinking about how technology can strengthen the community, healthcare, share this episode with someone on your team and make sure you're subscribed to the Pretty Good AI podcast. We'll keep bringing you conversations with operators building the future of healthcare. That's it for today. Thanks for listening to the Pretty Good AI Podcast. I'm Kevin Henrikson from Pretty Good AI.
We'll see you next time.
Transcribed from the episode recording, with names and spellings corrected.