The Edge of Healthcare: Why Nonprofits Need to Think Like Wall Street (Without Losing Their Soul)

Martin Cody: Welcome to The Edge of Healthcare, where the pulse of innovation meets the heartbeat of leadership. I’m Martin Cody, your guide through riveting conversations with the trailblazers of healthcare. Tune in to gain exclusive access to strategies, experiences, and groundbreaking solutions from influential payer and health system leaders. This isn’t just a podcast; it’s your VIP ticket to the minds shaping the future of healthcare right now. Buckle up, subscribe, and get ready to ride to The Edge of Healthcare, where lessons from leaders are ready for you to use today.

Martin Cody: Hello again everyone, and welcome to The Edge of Healthcare: Lessons From Leaders to Use Today. And I’m excited about this next episode because it’s covering an area which is enormous not only in healthcare, but also in business all over the United States and world, and it’s essentially running a nonprofit. With us today is CEO President of Bancroft, Toni, oh, you’re going to kill me; Toni Pergolin. Toni Pergolin. Toni, I apologize. Thank you so much for coming on, and I’m looking forward to this discussion.

Toni Pergolin: Me too. Thanks so much for having me. I’m excited to be here today.

Martin Cody: And it’s not for a lack of caffeine that I just had that brain cramp. But I know Pergolin, and we’ve talked before. I want to begin with, before we kind of jump into Bancroft and talk about maybe a little bit of your background, geographically, where did you grow up? Were you exposed to non-profits? Tell me about college and kind of the pursuits that you had there.

Toni Pergolin: Great. So I grew up in Pittsburgh, right outside of Pittsburgh, Pennsylvania. And I’m one of four. And I had two parents that are accountants. And they were accountants in for-profit companies. My mother worked for a big eight. My father worked for a television company. And they were both accountants. So when it got time for me to go to school, I went to Penn State, and I felt like it was just natural I would be an accountant, because that’s kind of what I grew up listening to about. And so when I went to Penn State, I had really a great time, a great school … At the end of that, all my friends were from the Philadelphia area, which is the other side of the state, and they said, You know, you should really come out here for a couple of years and have fun. So I went back home to my mother, who was not happy. I’m the only girl. And I said, You know, mom, I’m going to do this for two years. And, you know, she said to me two things. She said, You’re an accountant, and I want you to do things that I didn’t do that I think hurt her career. And she said, If you’re going to go this career, I want you to do two things. The first is to get your CPA. My mother never got her CPA, and she said, I really always felt like it held me back. So you got to get your CPA. The second thing she said was, You got to learn how to play golf because it’s a man’s world. They all play golf. And you’ll be the only one in the office if you don’t learn. So I spent that summer studying for and getting my CPA. I also spent the summer learning how to play golf with my mother.

Martin Cody: Two actual accomplishments that will serve you all your years.

Toni Pergolin: Exactly, exactly. So I moved up here in the fall, and of course, you said, you know, you have to get a job. And, you know, at that point, I had just completed my CPA test, so I had to work for a CPA. So that was the only thing I was really looking for. And, you know, back then we looked in the newspapers and we sent resumes out all over the place. And my first entry into the workforce was in a bank as an internal auditor. And I worked for a CPA, and I did this for like two years. And here’s what I learned. I hated banking, and I hated being an auditor. However, I learned over my years that a lot of those first jobs you have is checking off what you don’t like, right? So I didn’t say I want to go work for a nonprofit, but I did say I don’t want to work for a bank. And then I went to an insurance company and said, I don’t want to work here, right? So I went on this path always as an internal auditor, again knowing I didn’t want to be that. But the internal auditor allowed me to really understand the workings of a company. And so I still use those auditor skills today as a CEO. I think I ask different questions because I learned about controls, I learned about how things work. So I ticked off industries I didn’t like, and finally landed in healthcare.

Martin Cody: Let me pause there for a second, because you mentioned a couple of things, and I want to orient our audience as to some of the nomenclature that was recently used. So for the younger generation entering healthcare or having been in healthcare for just a few years, the phrase big eight refers to accounting firms because at one point in time, there was, while there might have been 100, there was really eight very, very large accounting firms: Arthur Andersen, Price Waterhouse. I can’t even remember them now. I think it might be big four.

Toni Pergolin: I think it’s four. I think it’s four.

Martin Cody: So there’s been a lot of mergers and acquisitions. And I’m curious, growing up with two accountants today, do you balance your checkbook, paper checkbook at the end of the month or do you rely on software?

Toni Pergolin: I balance my checkbook at the end of the month. Doesn’t everybody do that?

Martin Cody: Who does that?

Toni Pergolin: It’s ingrained in me. It’s ingrained in me. I’m an accountant through and through. You should see my notepads. I split them all in half like a T account. And I have a right side, you know, a debit and credit. It’s how my brain works. I think all the financial people listening to this will agree with me, Martin. That’s how we roll.

Martin Cody: You can take perhaps the individual out of the accounting discipline, but you just can’t take the accounting discipline out of the individual.

Toni Pergolin: Correct.

Martin Cody: I understand, I’m proud of you for that. I think I last did that in high school. And I probably have the late notices to prove it, but that’s fine. The other thing you mentioned when you moved up here, where is up here?

Toni Pergolin: To Philadelphia. So I moved to Philadelphia after that summer, and I’ve been in Philly now for 39 years, so I thought I was coming for two, and I’ve been here for 39. And it was really because I had just a great career journey. I often say that the only thing that was good about my banking step was I met my husband, so that was all I needed. And then I went on my merry way. And so again, I worked for banks, I worked for insurance companies. And then when I finally got to healthcare, there was something about it. And not because I wanted to see patients at all. But there was something about the challenge, the challenges of kind of accounting and the financial business operations piece of healthcare that really piqued my interest. And so the nonprofit thing, it took me a while to even really realize that because I worked for a very large. It was a hospital at the time when I left. 15 years later, it was a whole health system. So something else that happened, right, in our generation, and I got to be a part of that. Like every time they brought on a new hospital, I was part of the team that went and helped integrate. And so through that, I learned about MnAs, mergers and acquisitions. I learned about turnarounds because every hospital I went to, I had to learn how to really turn around the operations. And so I felt like that 15 years at a very large health system in Philadelphia was kind of my, you know, career college, right? So 10,000 people worked there. So you learned about how to work in teams and how meetings are operating, how data is used. And like all those really, really great, I think attributes on how you become a leader. Now, there was at no time that I thought, Hey, I want to be the CEO someday. But there was always a time that I was looking for the next thing. Every two years I would expand my scope and I would expand my scope, always in that business and finance operations area.

Martin Cody: And I’m curious why you wanted to do that from an expansion standpoint of your own personal development and if there was a time in your life where someone instilled that in you.

Toni Pergolin: You know, you do learn about kind of what challenges you over your career. And when things got nice and stable and status quo, I was bored. I was ready for the next challenge. Like I learned that I’m more of a fixer, if you will, rather than just keeping everything status quo. That’s where I was ready for that. And yes, along the way there were people who, in today’s world you would call them mentors; back then, they were just people we kind of worked for who always said to you, like, You know, Toni, when you get involved, it’s organized, things get done, and you’re able to bring the business and the finance together in ways we weren’t able to do before. So we want to give you more and we want to give you more. And so you really need those people in your career, right, to be able to see the skill that you have and to really give you opportunities to continue to grow.

Martin Cody: I like the term fixer, and I think its antonym might be doer, where the doer just gets into that, I don’t want to say rut, but they get into that comfort mode where they know their periphery; they know their boundaries; they’re not too comfortable going outside the boundaries; they’re earning a good living. The fixer can’t sit idle for too long.

Toni Pergolin: Exactly.

Martin Cody: And it’s not like they want to go out and intentionally break things, but they have a way with a some sort of built in sonar and radar to see things that are broken and know that, Hey, there’s a better way to be doing this, ladies and gentlemen. And why don’t we pursue this path? Would that kind of be the realm that you fall into?

Toni Pergolin: Exactly. I think you described it extremely well, and I think because of that skill set, people looked at me like a natural leader. And again, you see things. Everything I touched, everything I saw, I thought, I know how to make this better. And I know it’s a better process, a better outcome, a better accomplishment overall. And so that was just kind of how I rolled. The other thing I think comes along with being a fixer is being a risk taker.

Martin Cody: Correct.

Toni Pergolin: So I was never afraid to take a risk. And I would say that my biggest risk was after 15 years at this health system where I literally probably could have stayed for the rest of my career. A lot of my friends are still there today, and they spent their whole career there. I was ready for the next thing. And so when the opportunity at Bancroft came up, there was somebody who I worked for at Penn who was now at Bancroft. They were going through huge financial challenges. They came to me and said, I want you to look at this opportunity. I want you to be the CEO, a CFO. I came as the CFO. It needs a turnaround. And you’ve done this before. I’ve seen you do this before. And I looked at the financials and my banking background gave me the sense of, like, This could potentially be a bankruptcy organization. And am I ready for that? And I got to be honest, I really was. Like, I was like, Let me learn that, right? So it was just this kind of I’m always ready for the next thing.

Martin Cody: I’m curious on that component of your DNA makeup; risk-taking specifically. And do you think personally that that can be taught?

Toni Pergolin: You know, I don’t think it can, because there’s something in me that I’m not afraid. Like, I have courage, and I have this confidence level in me that if it fails and it might, I’ll fix it because I’m a fixer. I think it’s just kind of a part of your DNA. I mean, I was never nervous about it. Now, there were times after I was here that I thought, what did I do? For sure.

Martin Cody: I’m sure there’s been a few lonely nights going, What on earth have I done?

Toni Pergolin: Sure. But, you know, it was one of those situations where there were so many things that were broke. Literally, you didn’t know where to start. And what I learned or what kind of what I saw, if you will, was I got to fix the most broken thing first, which was cash. I needed cash to come in the door because if I couldn’t get cash in, then all these other issues didn’t really matter because we were going to close. And so it was kind of learning how to prioritize what the most important issue was at the time, fix it in a way that it was fixed forever, and then move on to the next. And I feel like when I look back at those, it was two years, very long two years, it was really fixing a step at a time to really get the organization up and stable on its own.

Martin Cody: That’s awesome. I love the risk-taking component. I also, you touched upon an adjective that I think I was going to mention, and that’s courage. And courage, in my opinion, is literally the byproduct of self-confidence, which is a byproduct of making decisions that may not end up as you thought. But then, as you said, you pick yourself up, you dust yourself off, you get at it again. You reiterate, or you iterate on this process over and over and over again. And then pretty soon your self-confidence rises. And then pretty soon your courage rises. And pretty soon you might be taking more risks. And I actually think that there’s not enough of that in healthcare today. And when you have 40% of hospitals that are operating with a negative profit margin, why is that? I don’t want to put you on the spot or anything, Toni, but could you please fix healthcare?

Toni Pergolin: They need a fixer. They need a fixer. And the other thing that I would think about is, how do you get confidence when you have these horrific bottom lines, and there’s so many decisions you got to make about raises and improved quality care and patient care and patient satisfaction? And your funds are really limited. But we know we all know that health care costs too much money today, right? We know this. But in my accounting opinion, I don’t think we’re making decisions to make it more efficient and effective. And I won’t give you the most basic example to me. Every new hospital going up today, and they’re going up all over the place, right? They’re still building them. They all have single rooms. Now, when I worked in the hospital, there was, the VIP sat in single rooms. I get it. I want one, too. But that’s not more cost effective; that’s more customer satisfaction. So that’s the balance today of what I believe our patients want. They want the best of the best MRI. There was nothing wrong with that first one, by the way. I found the same thing this one does, right? But we are a country, a society that always wants the next best thing. And I think that that is really pushing healthcare into an unaffordable, really place. And the biggest issue, I think, in today’s healthcare, the one thing that I think needs fix more than anything is access. I mean, I’m a healthcare person and I’m well educated and I know how to do this, and it’s still really hard to figure out how to get the appointment, the referral, this. And that is expensive.

Martin Cody: And that’s very expensive. And access is a critical component of some of the struggles that the industry is facing today. And it’s interesting. I think if a CEO had a philosophy in healthcare that he or she came at it from the premise of, I want to make certain that you never enter our walls and we’re going to do everything we can. I would like to put myself out of business, so to speak, because if there’s no need for you to come to us, then I’ve solved a lot of problems, but I’ve essentially put ourselves out of business. Now, one thing I find fascinating about the healthcare industry is that the healthcare industry doesn’t focus on nutrition, and the food industry doesn’t focus on health. And you have seen in the area that you study and that we’re going to get into now at Bancroft, and the patients that you treat, a lack of a better phraseology, a pandemic increase in rates of autism. As a society, we’ve seen a pandemic increase in the rates of obesity, the rates of mental health, and lack of access, and those sorts of things. A lot of it’s starting to get linked to nutrition and the explosion of the ultra-processed foods and that sort of thing. But talk to me about Bancroft: mission, purpose, execution. Because I want the audience to know exactly the field that you’re in and the folks that you work with.

Toni Pergolin: Yes. So Bancroft is a 140-year-old organization. So it’s been a long time. And I still very admire our founder, Margaret Bancroft, who was a school teacher. And she saw in her classroom that there was one student who was not learning at the same pace as everybody else. But she also saw that if she took time with this child, gave them attention, taught them different ways, they too could learn and grow like everybody else. And so with that one student, she opened a school in Haddonfield, new Jersey, where we were for 135 years on that property. And she really built up this school and this whole kind of special education. And, you know, in 1883, when she started people, autism wasn’t a word. These individuals were retarded. They were slow. They were all those things. And a lot of families kept them in the attic, like they were, not, they didn’t know what to do with them. And she pulled them out and said, They too can learn like everybody else. And so she started with the school, and then she learned pretty quickly that some of them needed to live with us. And so today, our mission is exactly the same. We serve children and adults with autism and intellectual and developmental disabilities. And our mission is to help them live a really quality life. So we’re not about the cure and we’re not about the research; we’re about finding abilities in who they are and helping them lead fulfilling lives. So today we serve 2000 individuals. We have four schools. The school, if you will, is the front door of the organization. So most of the children enter the Bancroft system in their school years because they are no longer being educated in their regular school. They can’t sit in a classroom. They are self-injurious. They’re non-verbal. And they’re just not successful there. So they send them to Bancroft. And then once they’re in our system and they really begin to learn how, with the right, you know, we have a lot of behavior analysts, we have a lot of nurses, we have a lot of therapists, a big clinical team. When these students get that constant help, especially at a younger age, they can begin to learn and grow. And so at age 21, they graduate like everybody else does, and they move into our adult program, which is our largest program. And 75% of our adults came through our school. And it’s wonderful because it’s great for the individual because they’re constantly getting this care. It’s great for the families because they’re not like, What’s next? What happens when they turn 21? What happens when they turn 25? And if I put my business hat on, it’s really good for the revenue cycle because I’m getting paid a dollar amount for Johnny for 55 years. I mean, we have people at Bancroft who have been here more than 55 years. It’s their home, it’s their family, and they’ve got jobs, and they have friends, and they go on vacation. I mean, they truly live really, really fulfilling lives. And it’s something that I’m extremely proud of. And, you know, I have to say, when I came and I was looking at closing eight because the numbers said this place should close, I was so blown away by the mission and the people who worked here and their families. And I thought, This place is too important to fail. And it was easier to figure out how to keep it open than it was to close it, because where would they go? Where would they go? And today in New Jersey, 1 in 33 babies is born on the autism spectrum. So it’s only growing.

Martin Cody: Yeah. I was just going to ask about need. And how many more homes do you need? How many more? It just, the last stat you just provided with 133; it kind of clouds my mind with how enormous the need is.

Toni Pergolin: Enormous the need is. Now, not everybody on that autism spectrum, I’m sure you heard the word, the phrase, You meet one child with autism, you’ve met one child with autism because they all have different individual needs. And our care is very individually-based. But, you know, there’s a percentage of those babies born that absolutely do end up at Bancroft. So we open five new group homes every single year. We are constantly growing our school system. And in the state of new Jersey, there’s 5000 people on the waiting list trying to get in. So the issue, to be honest with you, is not necessarily providers; we’re able to open and grow. The issue is the funding because our funding is from the states. And so they have a limited amount of money. And so they can only fund those in the most need.

Martin Cody: And that in and of itself is fraught with interpretation peril, right? You know, what is defined as the most need. And I was going to ask where the money comes from outside of the fundraising and the donation contributions and those sorts of things. And so it comes from the state. So the state has a basket, if you will, or a bucket of funds for a category of patient or.

Toni Pergolin: So it’s the Department of Human Services. So there’s state money; it’s messed with federal Medicaid dollars. And that’s residential. Our schools are paid for by the school district. So you live in a school district, you pay taxes. If they can’t educate your child, then the school district has to give that money that you pay or they have to pay us. What are our prices? And so the school districts pay for the school and the state pays for the residential.

Martin Cody: So you’re, in a world of hurt, should services get cut?

Toni Pergolin: Very much so.

Martin Cody: And thinking about it and you follow the dollar a heck of a lot better than I do, if services at the state and, or federal level get cut, and you cannot admit new patients or students and, or you have to let some of the ones you go or you are currently treating leave because you don’t have the capacity, you know, the staff, those sorts of things to be able to adequately provide care for them, those individuals then either go back to homes, which likely won’t work because if it did work, they would be there already. And, or they may go out onto the street. Whereby if I even pulled on this thread a little bit longer, they’re ultimately going to end up in a hospital emergency department with the cost of their care is going to be, you know, 3x, 5x, 10x, 20x what it currently would be at Bancroft. So is that an outlandish summation of potential events when services get cut?

Toni Pergolin: It’s a case that we try to make often, but here’s the difficulty. There are different funding sources. So the state doesn’t pay for them when they’re in the ER, right? The insurance does. So the state says, Well, that’s really not my problem if that’s where they end up, because I only have to pay for them when they’re in residential. Now, the insurance company should care, right? Because they got to pay for them, but they don’t pay for the residential care. So we often really work with the health cares and the managed care companies and insurance companies to say all you’re doing is pushing it to the next person. This needs to be looked at whole. I mean, this is lifetime care. Lifetime care. So yes, it’s a lot of money, but if they’re going to need care one way or another, and this is the most efficient both for them as a quality of life and cost-effectiveness because it’s controlled. We know it’s projected. We know exactly how to manage it. But the fact that there’s too many funders in this is why it’s hard for anybody to look at it as a whole. I often say, I would love to be in charge of the state for one day, so I could give the whole picture overall like this and fix it, because it’s very convoluted because everybody has different interests. Does that make sense?

Martin Cody: It does. And it’s unfortunate because you’re right. Different interests, self-serving interests. And I think the incentives are misaligned, as is the case with healthcare. And we talk about that often on the program with just how things are broken, how they got broken, how it’s nearly impossible to fix until you get a bunch of fixers that want to fix things. And you just hit upon something, which makes me think of the opposite contrarian view. So I would imagine there’s naysayers out there knowing that if someone doesn’t, if I’m hearing you correctly, someone really doesn’t graduate out of the program and then just go on to a life outside of Bancroft, do they?

Toni Pergolin: They really don’t.

Martin Cody: Very rarely. Okay. So that way, do you run into counter adversaries, if you will, for lack of a better term, who say, Well, you’re just keeping them to get state funds and line your own pockets?

Toni Pergolin: Yes. But our individuals, it’s not like maybe, maybe not. They’re nonverbal. They’re self-injurious. They are dangerous in their homes and in their communities. They’re dangerous in their schools. Like our population is really in desperate need. And I would tell you over the 20 years that has shifted for sure. I mean, we used to have kids at all levels independent. And it was like, I think the school district started with, We can serve those more cost effectively. And so we saw our numbers go down and also the acuity, the severity of those we serve go up. So we don’t get a lot of that pushback because our population is very severe.

Martin Cody: But I think there’s, you know, there’s a negative, seeming negative stigma associated with nonprofits with regards to a lot of the safeguard watch groups out there to see how much of it is going to administrative, how much is it going to? And this is perfect for your accounting world and CPA background because you have access to all of that information and I’m sure can readily produce it at the drop of a hat. But with your particular patient population, the severity of it is really in the cost of the care and the professionals that you require. Unlike, say, no disrespect to any cancer charity out there that are looking for a cure. And personally, we just got done with October, which is Breast Cancer Awareness Month. I quite honestly think everybody is aware of breast cancer by now. So when are we having breast cancer cure month type of stuff?

Toni Pergolin: Exactly. Like we’ve been giving to it and researching it and doing runs and walks forever. Like why is it still there?

Martin Cody: Yep. And so I think in those areas of nonprofits, it’s almost easier to behave in a nefarious way. Whereas you’ve got a patient right here that’s visible, it’s tangible, it’s you can see what you’re doing, you can see how many of them, you can see what cost of care is and stuff like that. So is that an area of difficulty for you?

Toni Pergolin: You know, it still is, and it’s mostly because we’re nonprofit. I think that the nonprofits just get that kind of, you know, that’s what people think of us, right? That’s our reputation, what we get. Now, I will tell you that, yes, most of our costs, 80% of our revenue goes to our direct care salaries. So Bancroft has 3000 employees, lovely, dedicated, amazing employees that don’t make a huge hourly rate. I mean, we really worked on that with the state over the years, and I’m happy to say we finally got it to around that $19, $20. But, you know, when I came, it was $9 an hour. They weren’t living wages. These people have more than one job. They work a lot of overtime. I mean, it’s tough, but between salaries and benefits, that’s the big chunk of it. But the other piece is we have to buy homes and then we have to fix their roofs, and we have to put kitchens and bathrooms, like all that stuff you do on your home. We have 200. And so it’s a lot of maintenance. And your car, we have 300 vans who take them all around. Oil changes and accidents. Sure, it is really resource-heavy to really do what we do because it’s humans taking care of humans.

Martin Cody: Fundamentally, you’ve been doing this for 20 years now at Bancroft. What still gets you out of bed and makes you excited?

Toni Pergolin: You know, I am still amazed at what happens in this organization every day. I mean, you know, I meet with parents and I meet with, my days are hour by hour different. I meet with a parent who desperately, Toni, please get my kid in. I can’t do it anymore. They’re beating me up. They’re beating me up. I need help, right? To the banker who says, Toni, you’re not meeting your covenants. And what are you doing about your covenants? And we are hitting our covenants, by the way. And so, you know, and staff who are happy and staff who need more. And technology, right? Technology is coming into our space. And how do we use that to make the work we do even better. And so hour by hour is a different challenge for me. And it’s all about making the lives of these individuals who need a voice, like they need an advocate. I feel like my role is I’m representing them and their best interests, keeping them safe, keeping them healthy. We’re moving in now into the healthcare world and health and wellness. And how do we get them and all of our staff into this health and wellness initiative? Because then everybody makes out, right? And we’re working with different partners now, some of the universities on how we use AI through robots to really help engage with these individuals. So while the staff is cooking their dinner, there’s somebody playing a game with them. So it’s amazing to me how far we’ve come in the 20 years since I’ve been here. Amazing. But I still see where we could be and all the different things that are coming. And I think that’s what keeps me going because there’s always the next thing.

Martin Cody: I love it, I can see that energy still within you on solving the unsolvable, if you will, or trying to fix things, which I think is great. One of the other things I think is absolutely fantastic is you’re an author. So if someone wants to go into the nonprofit world and being a CEO of any company is filled with challenges and rewards, but certainly, challenges. And you’re president and CEO. But doing so in a nonprofit is its own bag of tricks. So talk to us a little bit about the book and why you decided to author this.

Toni Pergolin: Yes. So it’s really been a journey for me for sure. I mean, you know, I came in to do a turnaround. I was named CEO, which was another huge risk I took with a lot of courage because I had never been a CEO. We had just come out of a turnaround. Really, we changed the board, really started growing the company. I’m thrilled to say that ten years later, we were able to solidify our balance sheet so much that we built a brand new campus for our children, which I’m still very proud of today. And so all of this is to say that nonprofits can thrive as well. We deliver such an important mission, but it is a business. I mean, a lot of people, I would tell people, Oh, I’m, you know, I’m a CEO of a nonprofit. Oh, that’s so nice. You don’t even have to make money, like I was running a lemonade stand, and it made me crazy. And so it’s with that motivation. And listen, I’m a numbers person, so writing a book was the hardest thing I ever did. But I’m so glad I did it because it really talks about not only the journey, the business part, but how I learned about the amazing things this organization does. So it shares some stories along the way, and then how I was able to really take a company that was on the brink of bankruptcy to a thriving, with a state-of-the-art campus built for children at Bancroft. I would tell you that the biggest message of my book for every nonprofit leader is no margin, no mission. No margin, no mission. You don’t make money, you can’t have a mission. And so there’s this kind of myth out there like we’re not supposed to make money. People would pull me aside in the beginning and say, like, Did somebody tell you we’re nonprofit? Because do you think we’re allowed to make money?

Martin Cody: Non-profit doesn’t mean no profit.

Toni Pergolin: It’s a tax status. That’s it. Like we have to pay bills like everybody else. Payday comes every Friday, whether you’re a nonprofit or for-profit. And so there’s a technique. Because the one thing I cannot do that for-profits can do is raise my prices. I have no say in what the state pays us. None. And we, in a ten-year period, they raised our rates by 3% over ten years. Yet I still had to give raises. I still had to build new houses. I still had to. And so it’s not easy. It’s not like, Well, just raise the prices and get more money in. It’s a challenge, but it is so incredibly rewarding when you’re able to really invest back in your company.

Martin Cody: Two things that you touched upon there. Well, one, what is the name of the book?

Toni Pergolin: It’s called Too Important to Fail.

Martin Cody: Too Important to Fail, I love it. And the second thing that I think is interesting, just from a little data point factoid, as you said, it took ten years when you first start out, and we live in a society of immediate gratification where people are expecting results in 30 days or six months. What have you done for me lately type of stuff. And that ten-year journey, I would imagine every month, every quarterly board meeting, every annual appraisal or review, you had to resell people on the vision. Is that a crazy assumption?

Toni Pergolin: All day long, all day long.

Martin Cody: All day long. So how do you do that? And where do you get the intestinal fortitude to believe with that passion and conviction?

Toni Pergolin: So when I came 20 years ago, this organization was not only on the brink of bankruptcy, but the buildings, the main campus. We were 120 years old and we looked at, you know? And so people were saying back then, Toni, we need a new campus. And I’m like, We need to make payroll next week. So let’s be there, right? And so I could break it down into pieces, right? So that two years, I’m like, Listen, we can’t talk about this. Right now, we got to make payroll without borrowing money and this and that and the other thing. So that was two years. And then it was like, Okay, now we did that. Now here’s the next step. So I felt like I could break it down into pieces, right? So now, you know, our balance sheet is very, very weak. We need to build a balance sheet so that we can build that new school. Here’s how we do it. And we’re going to do this in time. So every couple years, I would say, Look at that balance sheet. Look at that cash. We’re getting stronger.

Martin Cody: Get out of my way, I’m fixing things!

Toni Pergolin: Exactly. So we got the board behind it. I got my bankers behind it. But you’re right. I mean, it was selling it all the time. But I have to tell you that what drove me through that was not that I just wanted a new school at all; it was all about the business model for me, right? My mind worked in the business model. I knew for a fact that if we couldn’t figure out how to build a new school, that front door of our company would close. People don’t want to bring their kids. I’m a mom. I wouldn’t want my children to be in a school that didn’t have air conditioning and didn’t have a PA system and had no parking, and the teachers were parked all over the place and all the water was dripping in the sinks. I mean, it was. And so I was driven because I knew that the business model, the engine, was not going to last if we couldn’t really build a state-of-the-art front door to this organization. And that’s how I sold it to the board, and that’s how I sold it to the bankers, because all those adults we have, we wouldn’t have any of them if we didn’t have the school.

Martin Cody: Correct. I just hope and pray that you continually get a receptive audience that understands the human side of what you’re doing. And then you can equate that to dollars and cents if you carry the example out that you and I talked about earlier, where somewhere along the line, this person is going to need care. It can be through us, via the state, or pick your health system, or pick your hospital or pick whatever, which is never good. All right, I want to switch gears to the word association speed round.

Toni Pergolin: Oh, oh.

Martin Cody: So this is going to be tough to fix, but I’m going to say a word or phrase, and I want you to tell me the first thing that pops into your head. Ready? University of Pittsburgh football.

Toni Pergolin: Not good.

Martin Cody: Not good. I had to give you a softball warm-up question coming from Penn State. So there you go. All right. If you were over the state level of jurisdiction for your area and you had 24 hours to change things, what would you change?

Toni Pergolin: I would change the funding structure. I would bring all the different, diverse, dysfunctional payers into one consolidated, like bring all that money together and now look at the lifetime care so that it’s coordinated, it’s cohesive rather than so diverse that nobody, they just want to kick the can down the road. I want to bring all those cans together and say, There’s a lot of money in this system, but it’s dysfunctional because it’s in pieces. I think I could do it.

Martin Cody: Good point. And then, not at the state level, but what is one thing today that you’re unable to do that you want to do because you don’t have the resources?

Toni Pergolin: I want to develop my workforce. We know that this workforce, listen, we can’t do what we do every day without the amazing people that work at Bancroft. We can’t. And we know that the population is declining overall. Right? That’s a known fact. And caregivers are going to decline because caregivers are now helping mom and dad, and they’re in all the aging populations. I mean, I recently saw this statistic that there’s going to be more people over 65 that are under 65 in the not-too-near future. So we need all those younger people taking care of us, right? And so there’s going to be a huge shortage. And we talk about this all the time, a huge shortage in our workforce. And so if I had unlimited resources right now, I would work to not only improve the pay of those we can, but I would start programs that could grow our own so we could take them right out of the high schools and begin growing teachers, and we could begin growing behavior analysts, and we could begin really growing the workforce that’s going to need to take care of us, and the aging by the way. That caregiver is going to be such a crucial job. I mean, it’s not too far out; five, ten years out. So the more that we could work to really develop them and really expose them to this world and to this field, I think we all need to lean in and do that.

Martin Cody: I love it. And last question. Living or deceased, who is one individual within the healthcare world that you would love to sit down with, pick their brain, and have an adult beverage? Who is that person, and what are you drinking?

Toni Pergolin: Well, I know what I’m drinking. You know, gosh, there’s so many. I would tell you, and I wouldn’t even put a name to it, because I could certainly pick certain ones out along my career, but I would want to really sit down and talk to a physician leader. You know, like a chair of some surgery or a neurosurgeon or something like that. Because as the business mind, I see this, this, and this and this, but their mind, right, is the patient. Like they’re doing true, like saving people’s lives. And I feel like if I could better understand how they see this healthcare world, and they had a better understanding of how I see the healthcare world, that we together could come up and really solve a lot of these everyday problems that I’m facing and that they’re facing, right? So I think it’s like the one who does the care and the business mind need to really come together. And I’m drinking a Cosmopolitan.

Martin Cody: You might have to make it a double, because I think that would be a very challenging conversation needed. But in most of the physicians that I’ve dealt with them or worked with them for 35-plus years, they want to treat patients. You know what I mean? They don’t want to focus on PNLs and stuff like that. Just make certain it’s handled, get me paid for what I do in a timely manner, and let me take care of patients.

Toni Pergolin: But the two have to come together to really completely redo the health care system.

Martin Cody: That will be our next episode as Toni and Martin reform health care. I want to thank you so much. I learned a ton, not only about leadership and leaning in, if you will, but having the courage to make mistakes, to build the self-discipline to continue the process, which is incredibly important as we advance and fix things. But also, thank you so much for sharing about everything that is happening at Bancroft. Super impressive and I can’t thank you enough. I’m grateful for your time.

Toni Pergolin: Thank you so much, Martin. I really enjoyed the conversation as well. This was great.

Martin Cody: Awesome. Thanks, everyone. Please, if you want to get this book, get this book. It’s an amazing read, and I will let everyone get back to what they’re doing. And thank, again, Tony Pergolin for the time. Cheers, everyone.

Toni Pergolin: Thanks.

Martin Cody: Thanks for diving into The Edge of Healthcare with us today. I hope these insights will fuel your journey in healthcare leadership. For more details, show notes, and ways to stay plugged into the conversation, head over to MadaketHealth.com. Until next time, stay ahead of the curve with The Edge of Healthcare, where lessons from leaders are always within reach. Take care of yourselves, and keep pushing the boundaries of healthcare innovation.