Reality Check

Over the past several months I have enjoyed using this blog as a way of communicating with you about some of the great innovations that are occurring here at UMass Memorial. Some of those innovations are big, like endovascular aortic aneurysm repair, and some are small, like bringing in magazines from home for patients. All of them are important.

Today, instead of talking about innovations, I am going to use this blog to do a little bit of a reality check about our current situation.

After a six-week transition, I formally moved into the corner office of One Biotech on April 1, 2013.  On that day, we had a lot to be thankful for – outstanding quality results in tertiary services (treatment of heart attacks, organ transplant, trauma, cardiac surgery, NICU, vascular surgery, etc.), and outstanding service results in two of our community hospitals (Clinton and Wing) and many of our physician practices.

I also had a lot to worry about, including multiple vacancies in key leadership positions, patient access issues, revenue cycle problems (cash coming into the organization) from Soarian and not having an accountable care organization (ACO), which we will need to be successful in the future.   Perhaps most worrisome was our financial losses due to decreased inpatient volume, lower reimbursement rates and our high cost to deliver care (we lost $25 million in February and March) and the ED boarder issue at the Medical Center’s University Campus, HealthAlliance and Marlborough that was creating an unsafe environment for our patients.

In the 8+ months since I moved into my new role, we have made progress on several of these issues.  Most of the leadership vacancies have been filled, the revenue cycle has been stabilized and boarder hours are coming down.  In July, we will open a new observation unit at the Medical Center’s University Campus, which will further reduce boarder hours and keep our patients safe.  Our new 1-855-UMASS-MD number has helped improve access, and our Office of Clinical Integration and new company, UMass Memorial ACO Inc., are paving the way for success in the ACO environment.  Unfortunately, despite all of our efforts, our financial situation hasn’t improved.  We ended fiscal year 2013 on September 30th with a $55 Million operating loss and, based on our October and November results, we aren’t doing much better this year.

The changes we have made will help set us up for the future, but it’s simply not enough to get us out of the hole we started in.  With each month that passes our negative operating loss eats into our long-term cash reserves, which need to be maintained at a certain level to meet the agreements we have with bond holders and banks that have loaned us money.

The fundamental problem is that every year our costs (primarily wages, benefits and supplies) go up by about 4% but our revenue from Medicare, Medicaid and commercial payers only goes up by about 2%.  We put a hiring freeze in place for non-clinical positions several months ago and it has helped keep things from getting worse, but it hasn’t been enough to get us back to breakeven. What does all this mean? It means we have had to make the very difficult decisions to reduce our workforce in order to reduce our operating loss and will have to close some programs in 2014.  Unfortunately, some of these changes will be painful, and will result in the loss of more jobs. It is a harsh reality, but the only way that UMass Memorial will survive and thrive in the future is by making these painful changes now.

We are certainly not alone in our challenges. Large academic health systems across the country are making dramatic changes to the way they care for patients and conduct business. In the past months we’ve read about some of the country’s best providers, such as Cleveland Clinic and Vanderbilt University Medical Center, going through similar changes.

I am deeply saddened that we are at this point.  I can only imagine what losing your job because of things outside of your control must be like…just awful.  For those that have lost their job, I am very, very sorry and promise we will do everything we can to help you find a new position.

Some of the challenges we are facing are because of sweeping changes in health care, but we, every one of us, must also accept some of the blame.  Several services, including organ transplant, cardiac surgery, vascular surgery, the cancer center, joint replacement, critical care and the NICU have held themselves to an incredibly high standard – same or next day service and top 10% in the country in quality and service.  But it is not enough for some of us to be in the top 10%, we must all be there if we are going to succeed moving forward.

How do we stop this from happening again?  By focusing intensely on four things: improving patient access, improving patient flow, reducing supply chain waste and creating the best possible patient experience.

Patient Access

For those who spend your days working in or booking appointments for our ambulatory clinics or diagnostic centers please do everything you can to get patients in on the day they want to be seen.  We have some clinics where it takes months to get an appointment and some providers that frequently cancel their clinics and “bump” patients; this makes us all look bad. If one of our clinics has poor access, all of our clinics have poor access as far as patients are concerned.  Let’s all hold one another accountable for delivering same or next day access when patients want it.

 Reduce Supply Chain Waste

Look for and reduce the waste in your work area.  This can be anything from limiting color copying, minimizing the number of cell phones and hand-held devices in your department, using the most appropriate medications for patients (highest quality and lowest cost) and using the most appropriate implantable devices for procedures. The supply waste that exists here is significant and it costs us jobs.

 Patient Flow

Nothing adds costs and delivers poor service like making patients wait for appointments and to be admitted.  We need to start OR cases and patient appointments on time and get patients up from the ER to the floors as quickly as possible.  Getting patients discharged and home early in the day is good for them and good for us.  I get a lot of complaints from patients that they were discharged too late in the day or waited for hours to be admitted from the ER. We need to fix these flow issues once and for all.

Patient Experience

Make a human connection with every patient or fellow employee you encounter and some of our volume will come back. Patients want to you know you care about them and the place you work in.  Pick up a piece of trash instead of walking by it, walk lost patients or families to where they are going and send your coworkers a thank you note when they help you out. These little things add up and can make a big difference in the experience here.

We have trained more than 2,000 people in Lean problem solving the past three years and have roughly 200 idea boards up and running to help us identify solutions to our problems. Use them to improve these four things and we can stop the RIFs and get back to doing what we do best, taking care of patients and one another.

Thanks for your help,

Eric

One thought on “Reality Check

  1. This is small, but a number of years ago our department circulated a cost sheet for all the stationery supplies we used. By understanding what even an envelope or a clipboard cost, we were able to cut usage or use the cheapest alternatives.This probably applies to drugs and services as well. I have no idea of what the charges are for my own services, much less the services I order. Transparency is obviously difficult, because if competing hospitals can see the information, we might all be blamed for price fixing. Also, if I discharge a patient promptly, such as in the morning, his insurance may not pay because tehey consider it abservation.

    A

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