Moving forward

When Chris Lumsden arrived in Halifax County 30 years ago, he didn’t expect to stay long.

Just 27 at the time, the Roanoke native was the new chief operating officer at Halifax County-South Boston Community Hospital, which had about 450 employees.

But instead of being a career stepping stone, Halifax County became home. In 1988, Lumsden became the hospital’s top executive.  During his tenure as CEO, Lumsden led the creation of Halifax Regional Health System, an organization providing a wide range of health-care services to 70.000 Southern Virginia residents.

Lumsden also became heavily involved in the community, working to improve education in Southern Virginia and help revitalize its economy. In June, he was named to a one-year term as chair of the board of directors of the Virginia Economic Development Partnership, a state authority that markets the commonwealth to business prospects around the world. He was first appointed to the board in 2008.

In 2013, Halifax Regional became part of Norfolk-based Sentara Healthcare, a health system that now has 12 acute-care hospitals in Virginia and North Carolina and $4.7 billion in annual revenue. Sentara committed to provide $115 million in capital over a 10-year period to Halifax Regional along with other long-term support arrangements.

“Two years post affiliation, we have been more than satisfied with the outcome of our decision” to join Sentara, Lumsden says.  “I believe Sentara feels the same.”

Today, Lumsden oversees a 173-bed hospital that has undergone numerous expansions and renovations, a 130-member medical staff, a medical group of 65 physicians, two nursing facilities totaling 384 beds, four family medicine clinics plus a number of other specialty clinics, a home-health service and a hospice service. Together, the facilities employ 1,250 people, half of whom work at the hospital.

While Lumsden was reshaping medical services in Southern Virginia, the region was going through an economic crisis. Traditional industries in Halifax County, such as tobacco and textiles, have virtually vanished in the recent decades.

Lumsden says communities hit hard by economic disruption respond in two ways. “Either they pick themselves up by their bootstraps or give up and fade away. If a community has given up, it`s difficult, if not impossible, to make a comeback. Competition to recruit and retain jobs is fierce.”

Halifax County, he is proud to say, never gave up. He describes the community as scrappy, competitive, high-spirited and industrious. “The direction has always been forward and forward thinking.”

Much of his focus in aiding that forward movement has been on education. He led the effort to place “computers for learning” in every local public school in 1992. The initiative was overwhelming approved by Halifax County voters.
Lumsden also was the founding board chair of the Halifax Educational Foundation and a founding trustee of the Southern Virginia Higher Education Center (SVHEC).  Established in 1986 in a 500-square-foot mobile unit on the grounds of the local high school, SVHEC, now operated by the state, occupies 116,000 square feet in two renovated former tobacco buildings owned by the foundation in South Boston.

SVHEC provides access to college and career education, from GEDs to doctoral degrees. Its partners include Virginia community colleges and universities, technical institutes, professional associations and regional industry.  Last year, SVHEC had about 4,000 students from 16 Virginia counties.

In August, the center officially opened its IT Academy. It houses a data center, hardware repair center, computer-based classroom, and conference area all designed to give students hands-on experience. Students are enrolled in a fast-track, noncredit program, which leads to three industry-recognized credentials in fewer than six months.  Classes meet Monday through Thursday from 5 to 9 p.m.

“I was involved in K-12 and higher education long before I fully understood its distinct connection to economic development,” Lumsden says. “Higher education and workforce training are linchpins to economic development. Today`s industry must have a readily available trained or trainable workforce, not manual or menial skills such as in the past.”

In addition to leading the VEDP board, Lumsden has served in the past as board chair of the Virginia Hospital & Healthcare Association, Virginia Community College System and the Halifax County Chamber of Commerce.

A Fellow in the American College of Healthcare Executives, Lumsden has been recognized for his service to education and health care. He has received the Virginia Community College System Distinguished Service Award and an honorary degree from Southside Virginia Community College. He also has received the Virginia Hospital & Healthcare Association’s Distinguished Service Award.

Lumsden and his wife, Linda, have two grown children. His daughter is an occupational therapist in Roanoke, and his son is an electrical engineer in San Diego.

“It`s been an amazing and rewarding journey,” Lumsden says of past 30 years.

Virginia Business talked with Lumsden and toured Halifax Regional’s facilities on Aug. 28.

Virginia Business: What got you interested in economic development?
Lumsden: Early in my career, I learned the importance of creating and retaining good-paying jobs both in and outside the health-care industry. I quickly recognized that oftentimes what`s good for the local economy is also good for the local hospital. Therefore, beyond my profession, I committed to do all I could to engage and participate, directly and indirectly, in local and regional economic development efforts. Much of my community service work has been dedicated to K-12 and higher education, both linked to a successful economic development program. Working and raising a family in rural Virginia for 33 years, where textiles and tobacco are largely gone, have made me appreciate the significance of ambitiously giving back to my community and region.  I have attempted to do so through my work in health care, education and economic development.

VB: What surprised you when you joined the Virginia Economic Development Partnership board?
Lumsden: As much of my economic development work has occurred in Southern Virginia, I was relatively unaware of the mission and capacity of the VEDP and its connection to state and regional economic development initiatives. I was and still am impressed with the vast business expertise and experience represented on the board and its enthusiastic commitment to helping make Virginia the best state in which to do business. I was equally impressed with the talents of VEDP leadership team and staff and their overall intense focus on attracting jobs and capital investment to all regions of the state.

Perhaps what surprised me most was the level and intensity of global competition and the criticality of working closely with the governor, his administration, the General Assembly and regional partners to successfully attract new, good-paying jobs to Virginia. I am pleased that our 23-member board is highly engaged in ensuring sustainable success of the VEDP and its impact on the commonwealth.

VB: How important is having a governor who is enthusiastic about economic development?
Lumsden: This is critical to the state’s success. The governor serves as Virginia’s chief economic development officer, and his active involvement, especially in the international arena, reinforces Virginia’s strong commitment to its economic development program, opens doors at the highest level and is an essential link in making a business transaction possible.

Virginia is fortunate to have recent governors willing to travel with the VEDP delegation to personally pitch Virginia’s assets and pro-active business climate. Governor McAuliffe has helped lead seven economic development missions since taking office, with two more scheduled this year. His energy and enthusiasm are both remarkable and contagious. I have been impressed with his making economic development a top priority and his willingness to work closely with the VEDP.

VB: What are the board’s goals for the coming year?
Lumsden: New jobs and capital investment for regions in Virginia are at the top of our list. Specifically, fiscal year 2016 goals for VEDP-assisted projects are $2.7 billion in capital investment and 13,000 jobs for VEDP-assisted projects. In the last two fiscal years, 383 VEDP-assisted projects were announced, committing $8 billion in capital investments and 34,000 jobs across the commonwealth. These projects will generate an estimated $2.7 billion in revenue representing a “$1 to $12.57 return on investment” to Virginia over the next 10 years.

The board has been gearing up for budget discussions this year with state legislators and created a new legislation and policy standing committee to focus on external relations with the legislature, led by our board Vice Chairman Dan Clemente.  I trust 2016 will be an exciting and rewarding year.

VB: What are its biggest challenges in 2016?
Lumsden: Economic uncertainty and global competition remain Virginia’s biggest challenges. Virginia is in uncharted waters as it faces critical issues that affect its economy. The impact of sequestration has yet to be fully realized on the state’s budget. It is now more critical than ever that we reinforce Virginia’s commitment, efforts and financial resources to attract and expand new business in the commonwealth.

Virginia must continue to enhance and invest in marketing and economic development programs offered through and by the VEDP.  Virginia’s competitiveness and perception as a pro-business state remains strong, and we have been successful in maximizing the resources and tools that support our economic development programs. However, competition in the global economy and domestic markets continues to increase. Virginia can no longer rely on the visibility and notoriety associated with the prominent business accolades received in the past.

VB: What state is Virginia’s chief competitor?
Lumsden: In today’s global environment, businesses have a multitude of options to locate and expand new operations. Virginia regularly competes for projects against our neighbors in the mid-Atlantic and Southeast regions. It’s not uncommon for a project to be looking at the United States, Asia and Europe, especially when one considers that approximately 80 percent of the world’s purchasing power is outside of the United States.

Other states are modeling pro-growth policies based on Virginia’s proven success. Indiana and Michigan recently passed right-to-work laws to bolster their business retention and attraction efforts.  New York has recently invested in a multimillion dollar business attraction marketing campaign.  The bottom line is that Virginia must outperform all competitor states and global regions for economic development projects.

VB: What do you say to people who believe that offering incentives to companies is essentially picking winners and losers?
Lumsden: The VEDP does not lead with incentives. Virginia uses discretionary incentives prudently, and only in approximately 17 percent of all VEDP-assisted projects. Incentives are an investment in Virginia’s economic future and a business decision for both the commonwealth and the company. As a result, they must make good fiscal sense for all parties. We employ a proven return on investment model on every project where discretionary incentives are considered, and all state grants are included in that analysis for a comprehensive fiscal review.

The complexity of the global business environment and competitiveness both nationally and abroad dictate that Virginia have incentives that add value to the business location decision and are competitive with the commonwealth’s peers. Since the recession, incentives have become more prevalent in economic development projects that Virginia is competing to win.  Companies will choose to locate new facilities and expand operations in locations that provide aggressive business incentives when … remaining business drivers are equal.  Our goal is obviously to pick winners, and that they pick Virginia.

VB: What is VEDP doing for existing Virginia companies?
Lumsden: The VEDP supports existing Virginia companies with a variety of programs and services through its Business Expansion and International Trade programs. VEDP’s business expansion division provides site location assistance to guide businesses through the growth process. The team serves as a one-stop shop for the many partners and provides resources that can help a Virginia business to expand and grow with ease. The business expansion division maintains exceptional working relationships with our local and regional economic development partners and higher education partners.

The Virginia Jobs Investment Program (VJIP) is our signature long-standing incentive program, housed within the Business Expansion Division. Workforce, talent pipeline and delivery of training programs are primary questions that come to VEDP as companies consider expansion opportunities.

VEDP’s International Trade team also assists existing Virginia companies, both new and experienced exporters, to enter new international markets. Trade services include identifying potential new markets, developing market entry strategies and locating possible distributors and representatives for products or services — all at little to no cost.

The program is recognized as one of the most innovative state programs in the nation.  The VEDP recently launched a new initiative to develop the first statewide sustained high-growth firm strategy in the nation. The strategy targets approximately 5,000 Virginia companies with a survey to improve our understanding of the challenges that Virginia companies face as they seek to grow and will assess how Virginia can better support future expansions. This project is of vital importance in Virginia’s ongoing efforts to improve its business climate and sustain support for high-growth firms.

VB: Does VEDP have any new projects or initiatives planned to help boost the local economies of Southern Virginia and Southwest Virginia?
Lumsden: VEDP recognizes the significant diversity of Virginia’s regions and has historically created opportunities to align outreach marketing with regional partners’ priorities.  This fiscal year, the Business Expansion’s Regional Action Unit will take a further step with our regional partners, primarily through the existing Regional Development Organizations such as the Southern Virginia Regional Alliance, aCorridor, Virginia’s Growth Alliance and the eRegion.

By the end of this fiscal year, we want to have worked with these partners to identify barriers to the economic health of each region, and collaboratively map out a high-level action plan to address economic barriers.  Assisting rural communities will be a priority of the VEDP.

VB: How tough is it to operate a hospital in rural Virginia today?
Lumsden: Leading and operating any complex business is both challenging and rewarding. However, complexities of running a rural hospital and health system are accentuated by increased governmental regulations, decreasing payments by insurance companies, a greater percent of uninsured patients, dramatic changes in information technology requirements, and financial difficulties in recruiting and retaining doctors and other highly trained staff.  Hospitals remain a centerpiece to most communities and it’s critical that we not just survive, but thrive in meeting the long-term health-care needs of the patients we serve.  I’ve been blessed to serve Halifax Regional for 30 years.

VB: Why did Halifax Regional decide to join Sentara?
Lumsden: We dedicated two years of intense planning prior to making the decision to seek a system partner.  The question was rather simple.  Would Halifax Regional better serve our mission and patients by standing alone or being a part of a larger, high-quality, health system?

In the end, with the many challenges and uncertainties of remaining an independent freestanding hospital, we thought it best to thoughtfully consider all options and to seek out a partner.  After a year of further study, in 2013, our board, medical staff, and senior leadership team were unanimous in that Sentara Healthcare was the best fit for Halifax Regional.

VB: What advantages does Halifax Regional have being a part of Sentara?
Lumsden: Although there are many outstanding health systems located in and outside Virginia, Sentara Healthcare best met our criteria for affiliation.  Some of the reasons included excellent cultural fit and similar core values, outstanding record with quality and patient safety initiatives, one of the best-ranked integrated health systems in America, a superb reputation with employee and physician relations, financially strong, stable executive leadership and a Virginia-based organization.  Two years post-affiliation, we have been more than satisfied with the outcome of our decision.  I believe Sentara feels the same.

VB: Do you expect more independent hospitals to join large health systems?
Lumsden: Generally speaking, the trend towards mergers and acquisitions has steadily reduced the number of Virginia hospitals that at one point could have been defined as private, independent, standalone health-care providers. One could suggest that this industry-wide trend is a coping mechanism, a savvy, survival adaptation by hospitals and health systems increasingly squeezed by systemic factors not of their making. In short, one might say it is the health-care sector embodying the adage “there is strength in size and numbers.”

VB: How would the expansion of Medicaid help hospitals in Virginia?
Lumsden: One potential offset to some of the financial pressures on hospitals is to find a path forward on enabling more Virginians to access affordable health-care coverage which pays for services rendered. Recent political discussion and legislative deliberation have not produced an accord on that front. That inaction has prevented the state from recovering billions of its own tax dollars available to fund health-care enrollment for tens of thousands of working Virginians now eligible for such coverage. Projections suggest 400,000 Virginians could access coverage through the ACA in the event the Virginia General Assembly adopts legislation. In our market alone, thousands of uninsured patients will have insurance coverage, which favorably impacts health-care delivery, ability to recruit and retain professionals, and the overall local economy.