A Unique Approach to Margin Improvement, Leadership Development and Cultural Change - PowerPoint PPT Presentation

FROM SURVIVING TO THRIVING

A Unique Approach to Margin Improvement, Leadership Development and Cultural Change

A Case Study of how one health system’s senior leaders came together and made strategic decisions based on values, with Safety First and Work Life as a cornerstone to a business strategy.

FACTS AND STATS:

• Not-for-profit.
• Integrated health system.
• Employer of Choice.
• $1.4 billion in net revenue.
• 11,000 employees.
• Five hospitals, 1311 beds.
• 400 physicians/providers.
• Serve 1 million people.
• 1.1 million office visits.
• 273,000 emergency visits.
• 64,000 discharges.
• Over 75 locations.

“An organization that provides a coordinated continuum of services to a defined population and is willing to be held clinically and fiscally accountable for the outcomes and health status of the population it serves.”

Stephen Shortell, Ph.d.; Dean-School of Public Health, University of California-Berkley

WellStar’s Journey to

Employer of Choice

• Creating an effective workplace where every team member is valued and given the opportunity and support to succeed at work and at home
• An organization that provides a coordinated continuum of work life programs, family friendly benefits and workplace options and is willing to be held accountable for the outcomes and health status of it’s greatest asset – their people
• Benchmarking ourselves against the best

VISION: To Deliver World-Class Health Care

MISSION: To create and deliver high quality hospital, physician, and other healthcare related services

that improve the health and well-being of the individuals and communities we serve.

FINANCIAL PERSPECTIVE

Income From Operations Philanthropy

PRODUCTIVITY

GROWTH

Cost

Asset Utilization

Market Share

Revenue Opportunities

Employee Value

Customer Value

Compensation

Relationships

Image

Product

Relationships

Image

Salary

Incentive

Benefits

Service

Partnership

Brand

Equity

Quality

Access

Selection

Service

Partnership

Brand

Equity

OPERATIONS PROCESSES

INFORMATION KNOWLEDGE TRAINING

PEOPLE CULTURE

Strategic Focus

Investments

Return on Investment (ROI)

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04-2009

“You only learn who has been swimming naked when the tide goes out...”

Warren E. BuffettChairman, Berkshire Hathaway Inc.

Letter to shareholders, February 2008

Primary reasons for the negative sector outlook are:

• The tightening of credit markets,
• Expected broad based weakening in hospital
• operating performance,
• Declining liquidity,
• Softer volumes; and,
• More uninsured patients.

What hospitals are doing

• to meet this challenge:
• Hiring freezes
• Reductions in force
• Eliminating incentive pay
• Reducing management ranks
• Suspending merit increases
• Salary cuts
• Reducing 403b match
• Ending defined benefit plans
• Renegotiating with
• supply vendors

Hospitals Losing Money

April 2009 Survey

Healthcare Financial Management Association

WellStar’s financial condition was strong (top 15% of all health systems in the country).

However, to meet the challenges of the economic environment, our community needs and to continue to invest in our strategic plan, we needed to not only survive the current environment,

but to thrive in it.

3

“Great things are not done by impulse, but by a series of small things brought together.”

Vincent van Gogh (1853-1890)Dutch painter

Top Opportunities Group

Opportunity Teams

Labor Utilization

Supply Expense

Purchased Services / Other

Non-Patient Revenue

Revenue Cycle

Utilization Mgmt

Benefits

Expense Reduction

Physician Group (WPG)

Enterprise Support

Cobb

Douglas

Kennestone

Paulding

Windy Hill

Business Unit Teams

TOG Responsibilities:

• Prioritization & Oversight
• Develop strategy for accomplishing Opportunities 2010 goals
• Identify potential performance improvement initiatives & opportunity
• Prioritize and determine targets for each initiative
• Communicate strategy to organization
• Identify Project Opportunity Teams (Define Expectations)
• Weekly feedback on progress with supporting leadership decisions
• Allocate of resources to assist teams

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Opportunity Teams Responsibilities:

• Planning / Execution / Implementation
• Develop project plans to accomplish Goals & present to TOG
• Collect Data, perform analysis, and develop recommendations
• Communicate targets to Business Units Teams
• Maintain a system approach across business units
• Secure resources needed for Implementation
• Develop & initiate measurement / feedback mechanism

Business Unit Teams Responsibilities :

• Planning / Execution / Implementation
• Develop project plans to accomplish Opportunities 2010 Goals
• Collect Data, perform analysis, and develop proposed tactics & submit to Opportunity Teams
• Assist with communication to staff regarding purpose and process for Opportunities 2010
• Secure resources needed and implement tactics within Business Unit
• Develop & initiate measurement / feedback mechanism

Recommendation Development:

Opportunity Teams identify strategic performance improvement initiatives that assist in achieving the team goals for improving operating margin. Develop recommendation through analysis and quantify by business unit, if applicable.

Pass I Approval:

Opportunity Team presents recommendation to TOG for Pass I approval. Pass I approval indicates that the TOG believes that the recommendation is feasible and additional analysis should be completed to validate opportunity at the business unit level.

Pass II Approval:

Business Unit Teams will evaluate recommendations with Pass I approval for implementation feasibility, and make adjustments to recommendation. Business Units will work in partnership with Opportunity Teams to take revised recommendation back to TOG for Pass II approval.

Implementation Planning and Execution:

Recommendations that receive Pass II approval are

ready for implementation planning. Opportunity Teams

will support Business Unit Teams in the development of

implementation plans and execution.

Measurement / Validation:

Opportunity Teams will determine metrics to measure and sustain success of implementation. Metrics will be reported to TOG..

Our Credo

I believe every person and every job is important and I am accountable for achieving my goals.

I believe in compassion and understanding.

I believe in innovation and creative thinking.

I believe in our WellStar Team and we are making a difference in people’s lives.

Our greatest asset is our people and we will consider the human toll of our business decisions and ensure we are valuing their input, ideas and experience.

Provides an opportunity for all team members and physicians to submit their ideas for performance improvement.

The key is to draw upon the wisdom, insight and strength of our team members.

Building Trust Through Transparency

• Opportunities 2010, e-newsletter sent as initiatives are approved. Messaging aligns with the Strategic Plan, including “Myth Busters” to dispel rumors.
• Monthly Partners news brief
• eSource Spotlight
• Hospital & Medical Staff Newsletters
• Director Meetings
• Manager Roundtables
• Town Halls Meetings
• WellStar Medical Staff Meetings

Eliminated non-essential outside consultation

• Renegotiated cardiac implant pricing
• Renegotiated neuro stimulator pricing
• Implementing e-payables
• Restructured courier service and bid out services
• Performed a lighting retrofit of facilities
• Drilled a well for cooling tower and boiler
• Improving patient chart documentation
• Implemented new productivity monitoring system
• Consolidated janitorial services

• Standardized custom packs
• Discontinued personal inkjet printers
• Reduced outside catering
• Renegotiated spine implant pricing
• Restructured case management function
• Eliminated budgeted, but unfilled positions
• Renegotiated IT maintenance agreements
• Reduced insurance company payment denials
• Eliminated non-essential outside consultation

Implement in-house employee pharmacy

• Increase results of blood drives
• Implement blood conservation program
• Adjust certain pay practices to reflect local market conditions
• In source esoteric lab tests
• Renegotiate revenue contracts which were below current market conditions
• Implement in room patient massage and salon services
• Begin selling spa robes on a retail basis
• Restructure transcription services

• Implement UV window tinting
• In source self pay collection process
• Reduced distribution center inventory levels
• Terminate IT recovery center no longer needed
• Standardize formulary for office supplies
• Redesign laundry/line process at hospitals
• Redesign process and control utilization of scrubs
• Renegotiate vascular graph pricing
• Work closely with hospital GPO to enforce a “no price increase” policy

Operating MarginFY 2009 Trend

Fiscal Year ImprovementsFrom 2008 to 2009

• Gallup Engagement Scores in Top Quartile
• Medical Staff Satisfaction Scores in Top Quartile
• Turnover Rate significantly below national healthcare benchmark
• Low vacancy rates in all positions – especially difficult to fill roles
• National Recognition by Working Mother Magazine, AARP, Fortune 100, Alfred P. Sloan

Performance

Management

Work Force

Development

Cultural

Competency

Work/Life Balance

Benefits/Comp

LeaderShip

Development

& Learning

The Labor Utilization Team

Out of over 11,000 positions

• only 44 positions were identified to eliminate
• all 44 were offered reassignment with 1 being a promotion.
• Only 3 chose to seek opportunity elsewhere.

WellStar has taken extraordinary effort to make my transition into my new role a wonderful experience. I now have a better job, a great manager and am working on my computer tech degree.

Thank you WellStar for considering me in your decisions!

On left is Teresa Walker, Systems Analyst 1, with Manager Pam Pfeifer

Thank you for this opportunity.

Questions?