I feel fortunate to have such a wonderful team of people to work with as I know our success will be tied to our level of commitment and support of each other. Below is the update letter that I sent out to our team this morning, I welcome your thoughts and feedback!
Dear Jewish Hospital and Frazier Rehab Team Members,
I recently wrote to you about the status of the economy and its resulting effects on our system. I am very pleased and encouraged with the responses I have been getting from each of you with ideas on how we can weather this storm as a team. For all of you that have submitted your ideas, they have not been forgotten! I am working on compiling all of your suggestions into a document that I can share and utilize as we put our final touches on the final plan that we will implement.
As I work to compile the results of your feedback, I want to take a moment to share more detail about some of the actions that have already been taken to proactively deal with our situation. As we have discussed, the majority of dollars we spend are related to staff and supplies. Together, these two areas account for approximately 70% of our spending. As we budgeted and planned for 2009, we assumed that we would experience higher patient volumes the first quarter of the year as we have seen in previous years. This was not the case and therefore we find ourselves overstaffed for the number of patients we have to care for. We have no choice but to flex our staffing in order to stabilize the hospital around our operating volumes.
Over the past eight weeks, we have already begun to make changes to help lessen the overall impact to our team. Below are some examples of how we are trying to proactively manage this situation.
· Replacement positions: Each month we lose about 1.2% of our team members to attrition (retirement, relocation, or moves to another job or position). In an organization of our size, this means that we lose 35 - 45 people each month from the hospital. To help with overstaffing, we have greatly slowed down the re-hiring process in areas where our volumes are tracking below budget. Every position that is vacated is closely questioned and asked whether or not that position is vital to patient care and whether the position should be posted and re-hired. The less people we hire means the less people affected by potential downsizing, DTO, etc.
· New positions: Newly created positions that were budgeted for, but have not already been filled, were removed from the open positions report. New positions will only be filled as needed to justify patient care, increases in volume, or other special needs to the organization.
· Daily staffing: Daily productivity meetings are being held with the executive and management team to ensure each unit or department is staffing to volume and to ensure we have the appropriate number of team members in the right place, at the right time. Departments that are already over their daily targets will not have positions approved to be refilled until there is a clear plan in place to address the variance.
· Overtime: Overtime hours are being closely monitored. Overtime will be reduced as much as possible for areas whose volumes or work loads are declining and may be increased in areas where we are delaying the refilling of positions.
· Supplies: While we cannot cut back on the level of care or the supplies we use to take care of our patients, we all know that there are pockets of opportunity that lie throughout our hospitals to improve efficiency and thereby reduce our costs. Great improvements have been achieved in terms of reducing overall patient length-of-stay, but we know that there are additional opportunities to improve the amount of resources we consume. Our supply chain team is working to identify opportunities to improve our pricing, vendor selection and quantity of supplies used to reduce our overall spend in this category. If you know of an area where you believe we are wasting supplies, please bring this to the attention to both myself and your manager.
· Other expenses: I have asked the management team to eliminate discretionary spending wherever possible to help add to our cause (travel, meals, memberships, donations, etc). I know we do not spend a great deal in these areas to begin with, but every little bit helps.
Even with these actions, we are still not projecting to be where we need to be related to our budget and further measures will need to be taken in order to keep us on track. As I mentioned last week, I have begun a series of town-hall meetings and the feedback from the early sessions has been positive. I appreciate everyone’s willingness to help the organization think of new ways to weather the economic storm we find ourselves in while realizing that, in order to do so, we all must be willing to make some personal concessions. If you have not had the opportunity to attend a session, I have added a few new sessions this week. I would encourage you to attend or give me your feedback via email, voicemail, or through my online blog. I will send out an update when the meetings are finished to summarize and highlight some of the key themes that have been suggested.
I know this is difficult news to deal with, but I am very confident that we will be successful based upon the feedback I have been getting thus far. During this time, I am asking each of you to recommit yourselves to the difficult tasks ahead of us while realizing that none of our current obligations change. We must continue to uphold the highest standards around quality and safety. We also cannot lose focus on providing excellent service to our patients and physicians. If we can enhance the level of quality and service we provide, I am convinced we can grow our patient volumes and organization even in these difficult times. Thank you for your continued support.
Sincerely,
Martin J. Bonick
President & CEO
Jewish Hospital & Frazier Rehab Institute
15 comments:
I was just thinking about team members that work Baylor plus one. Since this is a Hospital and we work weekends why pay people extra bonus hours for working the weekend. I'm sure this is costing the hospital money to pay bonus money to team members for working the weekend. we're talking about SIX extra hours of pay for each day worked on the weekend when they're actually working Twelve hours and getting paid for EIGHTEEN hours. Thanks
As a result of your letters and "townhall meetings" you have many people thinking. I work in JHOR and see many ways everyday to save money. The issue is not where we can save but how, isn't it? Surgical supplies are wasted everyday. Team members wear sterile gowns that come in surgical packs to "keep warm" even though they are told not to, no accountability. Now that we dont have the "paper warm up jackets" they are wearing the gowns even more.We are paying PT & FT team members to work extra shifts on 11p-7a & our WE Baylor seems to be a big cost with 2 RNs working Baylor + 1 they work 36 hrs a wk and get paid an extra 6 hrs for baylor bonus. 2 of the RNs work over 100 hrs every 2 wks, not really saving there. maybe we should revisit our baylor program!
Unfortunately, I have been unable to attend one of the town forum meeting due to the times. As a member of the clinical staff, I wish that the meetings were during times when I didn't have patient responsibilities. Maybe before or after a shift say 7:30 pm or 7:30 am. Seems that the meetings are scheduled during admin times and times when managers can attend. I have been following along here rather than listening to the grape vine so thank you for this alternative form of communication.
I think that bonuses need to be addressed. In this economic time, no one should be getting a bonus. They should be eliminated to everyone, no exceptions.
I have heard that JH is considering cutting positions. Please remember that clinicians work the floors in the hospital and take care of the patients. Patient care is our bottom line.
What are other hospitals in the Louisville area doing? I see that we are looking to Beth Israel in Boston, but I think we need to look locally and see what the economic outlook is here.
I know that we are building a new hospital Medical Center Northeast. I understand that we need to go forward with growth opportunities, but we must remember to take care of things as they are now before we expand. If we cut positions downtown, how are we going to justify hiring new staff at Northeast? I am very interested in this plan.
(Great blog as usual)
Marty, I find it hard to believe that you cannot save more in your supplies and purchase services since they account for your 40% 45%of your total budgetary spend.
I know CEO's do not delve into the supply side of the equation but maybe you should take an unbiased look at this huge area first before you brush it away so quickly.
I noticed the same brush off of with Paul Levy's blog on Supplies and Purchase services when he announced savings areas on his blog.
Hospitals are so Price at the Pump centric that they fail to realize that you can have the best price in the world but if you keep choosing the Rolls Royce Products in every area of your organization whether or not it is medically indicated then you are going to have higher costs every single time in many areas of your hospital. Just because you are the BENCHMARK OF CARE in your respective city does not mean you have to purchase the high end products every time!!!
Do you really need to be implanting a wireless connected pacemaker into a medicare pay patient just to make it convenient for your cardiologists? Because the patient does not have a home network anyway to take full advantage of that technology (or be upsold by the pacemaker company which is an added revenue enhancer for them the pacer mfgs.). I would assume that you have the best price on the Wireless Pacemaker as well but all things being equal you still will pay 20% to 30% more for a pacemaker with that technology imbedded in it as to the old tried and true plug a wire in to the patient's pacemaker which has worked for the past 15 years? And that is just one product category.
Remember, high end products does not mean high end care! Meeting your customers exact requirements is what you need, no more, no less and that is what you need to accomplish with your supplies and purchase services.
I assume that your purchasing department is "Already Doing All This" once you delve into (or hand it off) this further or ask your Director of Materials but is anyone really pushing them? They still get paid whether you save or not which to me spells big savings opportunities because there is no incentive positive or negative for them to save more or to try to get it all.
We are in a Serious Economic Situation Here and Hospitals have to get every dollar out of every nook and cranny in your hospital and keep the savings in place.
A Hosptial Your Size Buys Over 20,000 or more Products and Services I think that leaves plenty to get after and big savings but you have to believe it is there because it is.
Good comment about supply costs. I would broaden it to include all Directors/Managers. At what point do Directors/Managers become accountable for their areas? Has someone reviewed the individual depts to find hidden costs being charged?
These are great suggestions to add to our list. I will be compiling these suggestions and posting a document summarizing the hundreds of comments I've received so far so we can make some decisions on how we will move forward. Please keep the ideas flowing! As I've stated in our town-hall meetings, we can control our own destiny if we work together as a team!
Anon 1:16pm
If you have had the chance to attend any of the town hall meetings you would hear that we are looking at doing everything possible to NOT cut positions from the hospital. Patient care is our mission and it will not be compromised. That being said, in order to preserve jobs, we will need to make other concessions in other areas in order to balance our budgetary issues.
Anon 1:18pm
We are looking at Beth Israel in Boston and other companies for best practices and ideas in dealing with our economic issues. I would be open to looking at what local hospitals are doing, but they are not being as transparent in their efforts as we are trying to be. If you have ideas or knowledge about this area, please feel free to share!
Anon 1:27pm
As you said, Medical Center Northeast is a growth opportunity for the system. If we do not develop a competitive presence in this fast growing part of town, we will find ourselves behind in the long-term which will only put more pressure on the other facilities within the system.
That being said, the pros and cons of delaying this project have been weighed thoroughly. The consensus opinion of the Board and leadership at the moment is that we must move forward with this project. The revenue and growth projections for this facility are great enough that they will help offset other losses within the system and help save jobs! Also, if we stopped at this point, we would still have significant rent and maintenance costs that would have to be made up from elsewhere within the system with no offsetting income generation.
Anon 6:06pm
I would disagree with your premise that CEO's don't delve into the supply side of the equation! Currently for every dollar in patient revenue we collect, we spend nearly 30 cents of it on supplies. I completely agree with you that this is a huge opportunity for us and a good amount of our conversations in our town hall meetings have been devoted to ideas around supply chain savings. Furthermore, if you would ask our VP of Materials Management and Supply Chain, my guess is she would say I am holding her extremely accountable to drive savings and value for the hospital!
You seem very knowledgeable on this topic and I'm sure you realize there are multiple variables that affect our supply chain spending. As you mentioned, price is probably the most explored topic, but there are fewer and fewer opportunities anymore to focus solely on this tactic to drive significant savings. The more productive areas of focus center around waste, product standardization, and product selection as you mentioned. The difficulty often lies in getting physicians to agree to make changes in their practice habits to standardize and change products to maximize benefit the hospital. We have multiple initiatives in process to drive this focus forward, but at the end of the day it is not something that we can directly control. Would like to hear ideas you may have to help!
Anon 8:43pm
Accountability has been a central theme I have been hearing throughout our meetings and embedded in the suggestions I have been receiving. The bar will be raised going forward for all, rest assured!
Your changes sound reasoniable except when it come to personal benifits and salarly.Alot of us are not making high wages less than $12/hr and are benifits are the only thing keeping us going. We were all hit hard with gas,rent food,stock market, and etc. and to take away more would be hitting us doublely hard at this time when we all are trying to survive. Please I pray to God don't take what little benifits and pension away from us.
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