I'd also like to give special thanks to Paul Levy for demonstrating how to lead in difficult times with transparency and respect. His leadership is making a huge impact on the future of health care in a positive way!
Dear Jewish Hospital and Frazier Rehab Team Members,
As we close the first quarter of 2009, I wanted to begin a series of conversations with you about the status of the economy, our ever-changing regulatory environment and their impact on our organization. I’m sure each of you knows our country is in one of the most significant economic recessions in modern history. At the same time, we are under ever increasing regulatory scrutiny that challenges the way we do business. Together, these facts are forcing hospitals across the country to find new ways to conduct business in order to survive.
Due to the economic pressures on the stock market that began in 2008, our organization’s investment income experienced a significant loss and we have also had to make a multi-million dollar contribution to maintain our pension plan, both of which took major reserves out of our “savings account.” This income has typically been used to help fund capital purchases, equipment, and building projects and was used to replenish our savings account when operational earnings fell short.
At the same time, regulatory changes related to inpatient rehab care have significantly limited both the types and number of patients we can continue to treat at Frazier. Due to a tightening around medical necessity criteria and something called the “60% rule,” we can no longer admit some patients to Frazier that we used to be able to care for in the past. As a result, Frazier’s admissions and census have continued to decline from prior year’s performance. As such, I announced to the Frazier team members on Friday that we will be closing the 9th floor of Frazier and relocating the patients cared for on that unit to the remaining three units at Frazier in order to maximize care and staffing efficiencies.
Furthermore, our outpatient business has declined an average of almost 5% throughout the hospital as patients delay or cancel procedures and tests due to their own personal economic issues. Further complicating the issue is the fact that our level of bad debt is increasing due to the number of patients seeking care from us that no longer have insurance or the ability to pay their health plan co-pays and deductibles.
As you can see we are in what many describe as the “perfect storm” for health care. In order to secure the organization’s long term stability, we need to begin taking immediate actions to do business differently as we continue throughout this year and next. Earlier this year, our Board approved a budget that would result in an operating margin for the system of 0.6%. This margin is already a challenge for a system of our size and after the projections of the first quarter, we are finding ourselves needing to reduce our costs by approximately $20 million just to maintain that same level of income margin.
As a result of the above, we have some hard decisions that need to be made in the month of April to help us address the financial impact of the economic crisis and regulatory changes. As such, I want to solicit your ideas and opinions as we go about implementing a plan so that you are aware of, understand the rationale and have the opportunity to be involved in helping us decide how we will do business differently going forward.
Many ideas have already been shared with me advising how we might deal with this problem just as other hospitals and companies are dealing with similar issues. Rather than just implementing these ideas, I’d like to develop a plan with your input and get your thoughts on these ideas, as well as others we may not have thought of yet.
To further discuss these issues and solicit your feedback, I am planning to host several town-hall meetings beginning next week. If you cannot make these meetings, you can always share your thoughts with me directly via e-mail, voicemail, or through my blog at www.hlifeblog.com (which can be done anonymously if you wish). Your input does matter to me, so please reach out and share your thoughts and ideas to ensure we come up with the best plan possible for Jewish Hospital and Frazier Rehab.
As an organization, we have always been known as being innovators and leaders in our field. Now is the time to utilize those traits to help us through this difficult period to protect our mission, vision and the financial health of our organization and our future. With the support of all our team members, we will weather this storm. I thank each of you for your contributions and support and as always, I look forward to hearing from you.
Sincerely,
Martin J. Bonick
President & CEO
Jewish Hospital & Frazier Rehab Institute
7 comments:
I think you should consider looking into cutting the clinical ladder bonus' in half or out all together. It's a great benefit to those of us wanting to better our careers, but a costly one also. Plus, it could always come back at a later date when available. I think that if we want to be better nurses, then we will, without as much incentive.
Have you achieved the savings associated with recycling EP lab disposibles? I've read this can save over $200K annually.
Supplies,
Departments could cross-share items that are no longer in use.
Use the internet as a "posting" of items available, instead of the items being thrown out or taken home. At another company I worked for, there were daily emails of items availabe as first come/first serve. It saved money.
Facilities,
Beepers, pagers and cell phones: Has the invoice and dept charges been reviewed for accuracy?
Our secretary noted that the PCARs (patient care administration records, which RNs use to ensure patient's plan of care is executed) are printed IN DUPLICATE EACH SHIFT FOR NO REASON and we are out of printer paper...
How come it takes an economy shift to develop ideas to cut costs in departments? I hope our company culture will change with this change.
I would like to suggest getting rid of "bad" employees. Those who are serial call-ins and abuse the system. They are a drain on all of us. Use the point system as it was intended.
Our scheduler is loyal to the prn people before she is to the full/part time people. In the economic distress of the company and the dto's what do we do?
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