Managing in a Crisis

In my thoughts this week were health system and hospital management teams impacted by Hurricane Sandy.  I am very fortunate to have an exceptional team pictured below who lead this organization during extremely challenging times.  The group pictured below is participating in a statewide emergency preparedness conference call on Monday as the hurricane was beginning to impact Maryland. (This was one of a number of calls that began on Friday and continued into the weekend.)  We are also supported by a wonderful staff of employees and physicians who become instant heroes when disasters hit. WMHS fared very well by comparison to McCready on the eastern shore of Maryland that had to deal with flooding in their hospital and Garrett Memorial to our west that had to deal with over 2 feet of snow. 

Then there is the NYU Medical Center in Manhattan that had to evacuate close to 300 patients during the hurricane because their backup generator failed.  Included in the evacuation was their chairman of the board, who was hospitalized with pneumonia.  On Tuesday, one of their other board members then went public that the board and management knew that the generator wouldn't work because of its age and condition.  Apparently, they are involved with a massive renovation to modernize the medical center, including their generator; but one then wonders why they didn't take steps in advance not to put patients in harm’s way.  There will be a lot of questions asked of NYU's leadership, including those from Mayor Bloomberg who has already started to ask why the city couldn't depend on NYU Medical Center when they were needed the most.

After the Hurricane

Throughout yesterday, last night and into this morning, everyone at WMHS was exceptional related to planning for and working through the hurricane.  The Governor declared a state of emergency for the entire state; and when that happens, you have a responsibility to keep people (patients and staff) out of harm’s way.  There are always some who want it to be business as usual in order to accommodate their personal needs, schedule and / or income.  However, everyone has to understand the uncertainty of a storm; in this case, a deadly hurricane.  We have no idea as to how much rain, how much wind or if it will be rain vs. snow.  We were on the fringe of this hurricane being devastating for the area; but fortunately, we dodged a very big bullet.  Actually, the land hurricane in July was more severe for our area. 

When you are involved in disaster planning, you have to plan for the worst.  Our staff travel from well into southwestern PA and a number of counties in WV, along with Garrett County, which ended up with over a foot of snow.  Their safety is our concern, especially in a state of emergency.  Power bumps or the loss of power can be deadly for patients undergoing a procedure, treatment or surgery; why put our patients in such situations.  We have a responsibility to our patients, our staff and our community; and yesterday into today we lived up to that responsibility.  Thanks everyone for a job very well done!

Hurricane Sandy

I have been in health care for over 37 years and I continue to marvel at the level of dedication of hospital and health system employees.  As with every other potential critical event, advance planning for the impact of Hurricane Sandy of our health system and our community began on Friday of last week and continued throughout the weekend.  Our leadership participated in meetings and conference calls over the weekend with Allegany County Emergency Management.  Culminating the weekend's planning was a statewide emergency management conference call last evening at 8 PM.  The process resumes this AM with an internal WMHS planning meeting at 9 AM then the opening of our command center that will remain open until noon on Wednesday.  We have to plan for a host potential issues with first and foremost protecting our patients and staff while they are in our facilities.  All of our staff were informed on Friday that we will provide for sleeping and showering arrangements at the health system in the event that they can't or don't want to travel in the severe weather that is expected.  Because of the extensive planning in advance along with the wealth of knowledge and experience of our middle and senior leadership, we should be fine.  These are the same people that flawlessly opened a new medical center and has prepared for, as well as, survived numerous crises over the years.  I am honored to be associated with such a great staff.   We are all hoping at WMHS that our planning for Sandy is simply a well planned exercise in emergency planning and that we are not impacted by Sandy at all.

One of Fifteen

Recently, I read an article in the Baltimore Business Journal, "Maryland's Independent Hospitals Say Cost Pressures Taking Their Toll."  Due to continued financial pressures on hospitals along insufficient  resources to support continued operations, independent hospitals, of which WMHS is one, are gradually eroding away.  WMHS is one of only now fifteen independent hospitals in Maryland.  The majority of general hospitals, of which there are 46, have joined with one of the big three systems in Maryland: University of Maryland Medical System, MedStar or Johns Hopkins.  However, our goal is to continue to remain independent for as long as we possibly can...........and forever would be nice.   Our preference is to continue to have decisions related to health care be made in our own community, rather than 150 miles away. 

Shortly after we opened the new medical center, a friend and colleague from Johns Hopkins responsible for system development and outreach came for a visit.  He was very impressed with what he saw at WMHS.  However, when the subject of mergers and acquisitions was brought up by him, he informed me that the Hopkins acquisition strategy is "don't call us, we'll call you." If only he had told me that strategy when all of the rumors were circulating as the new hospital was being built that Johns Hopkins would be taking over upon completion.  At that time, I even had past and present members of the Western Maryland delegation calling me to ask if that rumor was true.  In the past, UMMS was interested in having preliminary discussions.  As for MedStar, they are a great organization just like the other two, but no expressed interest in WMHS and that is a good thing. 

It is especially challenging for those hospitals in the urban areas that are trying to remain independent.  The "big three" have unbelievable resources available to them and it is very difficult to compete with that.  At WMHS, we have strong working relationships with a number of hospitals, including UMMS linked to Trauma, Hopkins with our new Diabetic Medical Home, WVU with our neonatal program, and the list goes on.  Our board certainly keeps their fingers on the pulse of the industry and should the time come for WMHS to look at a partner, they will know.  Until then, it is my goal to remain independent and continue to provide the best possible care to our patients in our community.

Effective Use of Labor in Hospitals Going Forward

In the most recent issue of Health Leaders magazine, there is an article, "Labor Efficiency a Growing Tactic."  The article is very timely for WMHS in that it reports on a recent survey of hospital and health system leadership across the country related to cost reduction initiatives, including reductions in personnel.  Thirty four percent of responding hospitals said that the annual savings generated from recently implemented initiatives range from 1% to 3%, twenty four percent said from 4% to 5% and twenty five percent of those surveyed said from 6% to 10%.  At WMHS, those initiatives that we implemented to date this fiscal year will reduce spending by about 3%, so we are consistent with the majority of hospitals reporting on implementing cost and labor reduction initiatives. 

These same hospitals / health systems said that the greatest savings came from cost reduction strategies in the areas of "stuff and staff" just like at WMHS.  Thirty two percent of the savings came from supply chain efficiencies, twenty one percent of the savings came from labor reductions, twenty one percent came from more efficient use of labor and nineteen percent came from revenue cycle improvements; all areas of focus at WMHS this year.  Lastly, the survey reported that those personnel categories targeted for reduction were as follows: 51% non-clinical; 23% clinical; 18% leadership (VP and up), all targeted areas at WMHS, as well.  Hopefully, articles and comparisons like this will help as we try to continue to explain changes in health care now and going forward.

Today's Baltimore Sun Article

In today's Baltimore Sun, there is an article listing the 89 Maryland facilities out of over 3000 nationwide that has purchased drugs from the New England Compounding Center since this past May.  This is the facility that is linked to the tainted steroid that has sickened over 300 with meningitis, resulting in the death of 23 people.   We have dealt with a number of inquires since the story first broke as to whether or not WMHS received drugs from this facility.  The article lists 89 facilities in Maryland; however,WMHS is not one of them.  WMHS did not purchase nor receive any drugs from this facility.  The Baltimore Sun article lists only one facility in Cumberland and it is not affiliated with WMHS.  A link to the article is attached.

http://www.baltimoresun.com/news/bs-hs-meningitis-more-facilities-20121024,0,7512595.story

What Does WMHS Mean to the Region?

In addition to being the largest employer with over 2200 employees and having an economic impact of over $300 million per year on the region, from time to time it is important to remind folks of the host of services that we provide. 

These include:

·         A designated area wide trauma center with a trauma team consisting of trauma surgeons, anesthesiologists, critical care specialists and other support personnel 24 hours a day, 7 days per week.

·         Special designation as a Cardiac Intervention Center and a Stroke Center, ensuring that patients have access to life-saving services within prescribed time-frames.

·         Emergency medical care 24 hours a day, 7 days per week.

·         Medical direction to pre-hospital providers, such as paramedics and EMTs throughout Allegany and Garrett counties as well as the surrounding counties in WV and PA.

·         Specialty coverage for medical, surgical, orthopedic, OB/GYN, pediatric and a host of other services.

·         Subspecialty coverage for cardiology, neurosurgery,  and neonatal services on a 24 hour basis.

·         Twenty-four hour coverage for all aspects of lab, radiology, respiratory therapy, OR, Behavioral Health, Open Heart Surgery and Interventional Cardiology.

·         Relationships with other academic medical centers and specialty hospitals for spinal cord injuries, burns, specialty pediatrics, hand injuries, eye and neonates.

We provide excellent medical care and treatment as a full service community hospital.  We have developed relationships with other providers to best care for the patients that we serve.   If WMHS is not as well versed in a certain area of medical expertise or if we don't see as many cases of a particular type that would ensure the proficiency of the staff, we will not hesitate to transfer our patients to the best setting for their care.

As you can see, we offer a great deal to this community in terms of economic impact, community support, wellness and, most importantly, in the care and treatment of our patients.

Keeping our Kids Fit

In my Blog for August 16, I mentioned that we had a meeting with administrators and teachers from three local schools to plan the kick-off events for their involvement with Project Fit America.  The Project Fit America program includes outdoor and indoor fitness equipment with a dynamic curriculum of fitness games and challenges, on-site teacher training, and in-class education on nutrition and other health-related topics. 

Last week, Flintstone Elementary School became the first school in Maryland to become part of Project Fit America.  Today, New Creek Elementary School in neighboring Mineral County, West Virginia, became the first school in that state to join the program.  Next week, Bishop Walsh School in Cumberland will have its kick-off festivities.

WMHS and Maryland Physicians Care, the managed care organization that WMHS co-owns with several other hospitals, provided the funding to bring this innovative program to three schools in our service area.  Our hope is that the concept will be successful and these schools will serve as a model for the rest of Allegany County and Mineral County schools.  Based on the early reactions from the children and their teachers, I think this has been a good investment for the future.

Students from New Creek Elementary School demonstrate
the sport hoop challenge at today's kick-off festivities

WMHS Captive Insurance Company

This week, several folks from WMHS and I are attending the annual meeting of the Western Maryland Insurance Company, our Captive  based in the Cayman Islands that provides our liability insurance.   When we were looking for a new liability insurance carrier in 2004, the most prominent carrier in Maryland had just left the state and there were limited options for coverage.  It ended up that our premium for that year was $3.9 million to cover the health system and 15 physicians.  We knew we had to find a more affordable alternative.

As a result, WMHS began pursuing an off-shore Captive similar to hundreds of US health systems with Captives in the Cayman Islands.  The WMHS Captive was formed in 2005; and in the 8 years that we have been a part of the Captive, we have saved close to $10 million in insurance premiums that would have been paid to insurance companies year after year.  Those retained earnings remain a part of the Captive, along with all other invested monies.  None of this money is paid to anyone else and it directly benefits the Captive and WMHS.  In addition, our Captive now covers the health system and nearly 60 providers.  Can you imagine the cost on an annual basis that we would have been paying to an insurance company?

The Captive requires a meeting to occur on an annual basis outside of the US and it is scheduled a year in advance since it requires the attendance of many actuaries, auditors, attorneys and other service providers.  Also, every two years, the Captive leadership is required to meet with the Cayman Monetary Authority.  The Monetary Authority is similar to the insurance commissioner for a State. The expenses for the meetings in the Cayman Islands are covered by the Captive.  The timing of this year’s annual meeting is unfortunate based on what has been happening recently.  We would have changed the date of the meeting if we could but it was not possible.   In fact, we have already scheduled the date for next year.

The bottom line is the Captive has been a godsend for WMHS as we strive to manage the rising costs of providing healthcare services.

Leadership Lessons from Steve Jobs (continued)

Translating the Steve Jobs' Leadership Lessons to health care leadership continues.

·         Don't Be a Slave to Focus Groups is his next lesson and I have never been big on focus groups so there is consistency there.  In health care today, I listen to a lot of people when making decisions, but you can't always wait for consensus.  You have to do what you think is best for the organization. 

·         Next is Bend Reality.  How this translates to health care is with quality and patient satisfaction.  We have to be error free and, if the patient is at the center, our level of satisfaction has to be in the top decile. 

·         Push for Perfection translates to relentless pursuit of the delivery of better care for our patients.  Tolerate only A players is tough but continues to be a focus at WMHS.  We assess our staff continually and work to get the B players to be A players.  We also work with the C players to get them to be eventual stars in our organization.  If they don't make it, then we work to politely separate them from the organization and guide to the extent possible onto a new career path.

·         Some of the other lessons, Engage Face to Face, which translates to continuous rounding,  and Know the Big Picture and the Details gets us to balanced scorecards, focusing on strategic direction and transparency in reporting. 

·         Lastly, Stay Hungry, Stay Foolish translates to embracing new ideas, eliminating complacency and challenging staff to bring fresh new ideas to the organization. 

Steve Jobs' Leadership Lessons can be applied to all leaders, but I hope the health care perspective helps the leaders at WMHS.

Leadership Lessons from Steve Jobs

Recently, I re-read an article in the Harvard Business Review on the late Steve Jobs and his leadership lessons.  When you look at his leadership lessons, the question becomes how do these lessons translate to health care leaders.    Coincidentally, at a recent meeting, our speaker took a stab at Jobs' Leadership Lessons and how they apply to me in my role as CEO at WMHS. 

·         The first lesson is Focus, which translates to our vision, our strategic plan and putting the patient in the center of everything that we do. 

·         Second is Simplify.  At WMHS, we have been applying Six Sigma and LEAN principles to process improvement.  We are striving to simplify processes and eliminate redundancy system wide.  Next is Take Responsibility; clearly the buck stops with me and I have the ultimate responsibility for every aspect of what happens at WMHS, like or not, that is the reality. 

·         When Behind, Leapfrog is his fourth lesson.  This is where innovation comes in.  We have to be on top of our game with clinical technology as well as information technology.  Our business in changing dramatically every day and innovation is key to our success.  We are fortunate to have some very talented people at WMHS who have operationalized a new hospital and the plethora of new technology within its walls. 

·         Put Products Before Profits translates to our patients and making sure that they are in the center of everything that we do. 

Tomorrow, I will comment on 5 more of Jobs' Leadership Lessons.

Improved Outcomes at WMHS

After the separations were announced earlier this month, I began to hear comments about the care at WMHS.   Some say that you can expect those kinds of comments after such an action is taken.  What is strange is that the care at WMHS has never been better. 

• We are using evidence based medicine to the greatest extent ever in the care of our patients
• We are assessing patients daily with a three-day or greater stay in the hospital to ensure that they are receiving the most appropriate care 
• We now plan for the patients’ discharge earlier in their stay to ensure that they are appropriately being cared for after discharge
• We have a nurse transitionist who now assists with the transfer of the discharged patient to a nursing home to better coordinate their care
• We have dramatically improved our medication reconciliation process to reduce drug errors
• We are using information technology to its greatest level in the care of our patients
• We are case managing high-risk patients to ensure that they are keeping their appointments with providers, taking their meds and living a healthier lifestyle
• We have opened three additional primary care practices, a congestive heart failure clinic, a Diabetic medical home program,  and an anti-coagulation clinic in the last year
• We continue to have the best heart program in Maryland
• Our nurses round at least hourly on every inpatient and nursing report, which is the handoff of a patient between nurses at shift change, now occurs at the patient's bedside so the patient and his family are involved
• Nurses once again are rounding with physicians and advanced practice professionals to ensure continuity in the care of the patient
• We are active participants in statewide initiatives to dramatically reduce infections, falls with injury and pressure ulcers at WMHS with great success
• Our patient satisfaction results for inpatients and the ED have us in the top 10 among Maryland hospitals

My goal is to ensure that our patients and our community continue to hear about the much improved outcomes at WMHS as we have a lot to be proud of.

 

No Outcome, No Income

Yesterday, I attended a meeting on the future of health care.......scary to say the least, but there are also opportunities for the short term.  Some of the predictions are ominous, such as 1 in 6 hospitals will be out of business by 2020; there will be no such thing as an independent hospital or health system such as ours; global payment with all providers (physicians, hospitals, nursing homes, clinics, centers, etc.) sharing in a single payment; hospitals will once again be buying physician practices, if not, at minimum, employing as many primary care physicians and advanced practice professionals as they can. If hospitals can dominate primary care with their physicians and nurse practitioners, they will be in a position of strength.

For the short term, hospitals must focus on patient outcomes.  There are many initiatives underway throughout the health care industry and at WMHS to prevent medical errors, prevent avoidable admissions, reduce avoidable readmissions, improve efficiency and reduce cost where possible.  As we have been doing very intensely for the last two years, hospitals must focus on safe, efficient patient- centered care.   That's where the title of today's blog comes in "No Outcome, No Income."

Through payment reform, hospitals are now directly accountable for the results or outcomes in patient care.  For example, over utilizing tests and procedures, not addressing complications, not reducing medication errors, or pursuing ways to prevent infections will result in losses for hospitals.  In addition, there has to be evidence as a basis for the care that is being provided.  Hospitals must coordinate the care of their inpatients and ensure that they have an effective plan of care after discharge.

We must also care for the patient in the most appropriate setting.  If we don't eliminate unnecessary and redundant testing, avoid readmissions, provide fragmented care and not address population health, there will be no income and in fact, we will be penalized and have money taken away.

Tomorrow's blog will include specifically what WMHS has been doing to improve outcomes to ensure that there is a continued income stream.

Administration and Executive Compensation

After that very difficult situation last week, I have heard questions about what is administration  doing during this challenging time.   What are we sacrificing?  In fact, the Cumberland Times-News editor called and asked the same question and subsequently provided his perspective.

In addition to losing two key members of the senior management team and not filling those positions going forward, senior management has had their salaries frozen until raise actions are restored for all employees at WMHS.  The duties and responsibilities of the Chief Operating Officer and Vice President, Human Resources will be divided among all of the remaining executives as those two positions will not be replaced.  Someone else will be doing the work currently performed by those executives and those positions will not be filled. 

The issue of executive compensation has also come up.  It is important to remind folks that executive salaries are set by the WMHS Board of Directors based on survey data obtained by a national executive compensation consultant, Mercer.  Mercer provides the Board with data from comparable hospitals and health systems to ensure that the compensation and benefits provided are competitive, but also reasonable.  The data is based on similar hospitals and health systems that have net operating revenues in excess of $300 million, as is the case at WMHS, along with those that are comparable in size, scope and structure to WMHS.   An executive's time in the position and level of experience also figure into the equation. 

The importance of engaging an outside consultant such as Mercer is  that it  also provides for a statement of reasonableness for the health system's annual filing with the IRS.  Because WMHS is a tax-exempt organization, we must meet IRS requirements ensuring that our executive compensation is reasonable and appropriate.  Mercer provides that assurance to the Board each year.  The IRS, along with the Health Services Cost Review Commission (HSCRC) in Maryland, reviews executive compensation once the 990s are filed with both regulatory bodies.  Boards must then be positioned to defend executive compensation as reasonable and appropriate.   One of the other factors that we use at WMHS to determine if our executive compensation is reasonable is by annually reviewing and comparing the administrative expenses for WMHS against all Maryland hospitals.  This information is tracked for hospitals by the HSCRC.  Year after year, those results show WMHS is among the lowest of Maryland hospitals in spending for administrative expenses.  For the most recent reporting period, WMHS was ranked 45 out of the 48 Maryland hospitals.

Executive compensation is always a tough issue, that's why it's best left to the experts.

Argo

Now how cool is this?  The movie, "Argo" starring Ben Affleck that opens on Friday is about a CIA operative named Tony Mendez.  Everyone at WMHS who has walked by the beautiful work of art of the Potomac River vista in the Cancer Center hallway should recognize the name since that work's artist is Tony Mendez.  They are one in the same.  Ben plays Tony in the movie, and it is based on a true story.  Tony was recognized years ago for his service to his country as a CIA operative for many years and for his work in Iran, receiving the highest award given by the CIA, the Intelligence Star.  More recently, much of his work has since been declassified since the receipt of the Intelligence Star became public.  He has written two books and the "Argo" story was in one of the books.  WMHS is the proud owner of three of Tony's paintings; the others are in the Chapel and in the former Peds area.  In addition to being a famous CIA operative, Tony is a wonderful artist.  I have had the pleasure of visiting his western Maryland studio and to see his work, as well as the work of his wife, also a former CIA operative and now photographer, and his son Toby, who is a gifted sculptor.  In fact, his son's sculpted the statues at Camden Yards.  Congratulations, Tony, on your service to our country and your success as an artist.

Hacking by the Chinese

Last Tuesday, the WMHS website was hacked with images of topless women being displayed.  The problem was quickly identified and corrected.  From the time of notification, the correction was done within 10 minutes by our IT team. What was so amazing was that the attack came from Chinese hackers.  Our team has since blocked all Chinese IP addresses to prevent future attacks.  It truly makes one wonder as to why the Chinese hacked into a health system's website tens of thousands miles away. 

You know with all of the recent attacks on websites by the Chinese, as well as all of the technology such as iPads and iPhones being assembled in China, are we going to wake up one morning and all of our communication networks will have been taken over by the Chinese? Pretty scary.

International Health Care

Yesterday, I read Paul Levy's Blog, Not Running a Hospital.  His blog was regarding health care spending as a percentage of Gross National Product.  Although the percentages vary for all countries depending on who is capturing the data, the average is about 8% even, with the U.S. at about 14%.  For most countries, their spending is too low and we are too high. 

Anyway, Paul's blog reminded me of a recent opportunity to speak with various people from Italy.  When they found out my profession, everyone with whom I spoke volunteered, "Our (Italian) health care is terrible.”  Really?  But it's national health care whereby everyone receives their care at little or no cost.  In conversation with the Italians, I heard the same complaints that you hear about Canadian and British health care--you wait forever for everything.  According to these Italians, everyone is covered including immigrants from all over the world, who some Italians say are invading their country, taking jobs in an already very dismal Italian economy and grossly delaying the care of Italians when it is needed.  Interesting.  One with whom I spoke was a bartender from Egypt who is now living in Florence, Italy.  He needed immediate surgery but there was going to be a six-week scheduling delay in Florence.  He returned to Egypt and was operated on the next day. 

In Paul's blog, he quotes a colleague from Denmark who asks, "Why does everyone come to Denmark to see our system thinking that it's wonderful; it's awful."  I hope that in the US, we "go to school" on how health care programs have been designed in other countries and consider what works and what doesn't as we change how it is delivered in the US.   So far, the changes that we have instituted at WMHS have improved the quality of care and reduced the cost.  I hope that the state and Federal governments, along with the other payors, allow that to continue.

A Failure of Management?

I once had a boss who said that having to lay off employees was a failure of management.  I agreed with that sentiment and have always gone to great lengths to avoid separating employees from the organization.  So if that's the case, one might ask then why the recent separations at WMHS?  I guess the short answer is that health care is changing and doing so very rapidly. 

Recognizing that many changes were on the horizon, last year we began not filling vacant positions that we felt could be held open.  And if a position needed to be filled, it had to be approved by me.  When it was all said and done, we eliminated 55 positions through attrition and turnover without affecting people.  We also have added many positions to better address the changes that shift inpatient care to care in a variety of outpatient settings.  Some of these new positions were filled by our employees who wanted to be part of the changes coming in health care, creating vacant positions that could be eliminated. 

After last week's actions, it is projected that approximately 20 of our 2200 employees may not have a comparable position available at WMHS because of their specialization.  If the number was one, that would still be too many individuals without a job.  Our approach with these individuals has been to be as fair as possible with a separation package that provides them an income and health benefits for the coming months.  As we go forward, our goal is to minimize any similar actions and not impact people in the future.  Based on what is on the horizon with changes to Medicare and Medicaid, as well as with private payors, if that goal can be accomplished, then I am sure we will be well ahead of the game.

In closing, I don't see last week's actions as a failure of management.   Payment reform is well underway in a dramatic fashion in Maryland and on a national level.  And no matter who is elected President, there will continue to be changes to a Medicare program that has become financially unsustainable. 

The Meningitis Scare Hits Close to Home in Two Ways

Yesterday, my family had quite a scare with a college student niece who had a fever, stiff neck and sore throat for the last two days.  She finally called home and my sister-in-law rushed to the college, located about an hour and half away, and took her directly to the local hospital's ED.  "Fortunately" it was diagnosed as pneumonia after a chest x-ray so no spinal tap was required.  However, too many college-aged kids lose their lives because of meningitis these days by simply ignoring the symptoms or the inconvenience to the parent's busy schedule.  Thank God, my family acted accordingly. 

Then, we hear of the meningitis outbreak nationwide as a result of a fungus in steroid injectables.  The health system began receiving calls from patients this morning since six facilities in Maryland have been identified as receiving products from the New England Compounding Center.  WMHS has never had any products from that Center and we have since notified the media, as well as inquiring patients, as such.  What a devastating outcome for those who were infected with the fungus.

Transformation of US Healthcare

Last week, I received a publication from our external auditors, KPMG.  The publication was entitled, "The Transformation of US Healthcare."  From time to time, it is especially helpful to check how we are doing against others in the industry.  The report identifies six key industry change characteristics that all hospitals should be focusing on and they are as follows: 1) Shifting reimbursement from fee for service to value based; 2) Increasing provider consolidation; 3) Changing sites of service; 4) Enhancing consumer engagement; 5) Transitioning to wellness and prevention; 6) Disrupting new market entrants.

 At WMHS, we have embraced all of these characteristics.  We are now paid under a value-based model as part of the Total Patient Reimbursement (TPR) model and will eventually evolve to a population health model.  We also continue to work with our physicians and advanced practice providers on clinical integration and provider accountability.  We have also embraced a new care continuum whereby we are treating patients in the most appropriate setting; not simply admitting everyone and caring for them in the most expensive setting whether they needed it or not.  Our patients, like patients across the country, have become much more engaged in their care and are fast becoming tech savvy in their interactions with us and their providers.  At WMHS, we have embraced community health and wellness across the system and can see improvements in the health and social needs from last year to this year.  Lastly, we continue to see new entrants into the health care market whether they are surgery centers, urgent care centers, entrepreneurial focused physicians, private companies and the list goes on.  Everyone is trying to find their niche, as well as maximize their income, in an ever changing environment.  The bottom line is that we are very good shape going forward in preparing our health system for tomorrow.

Projected Job Loss in Maryland

Under the current Federal budget projections, Maryland could lose almost 13,000 jobs in health care over the next eight years.  As I wrote in yesterday's blog, there are projections of over three quarters of a million jobs lost nationwide in health care over the same period.   As the Federal and state governments attempt to rein in health care spending, they will reduce payments to hospitals, doctors and other providers.  In our case, those reductions have already started in Maryland and have impacted WMHS.  With job loss numbers of that magnitude projected nationally and in Maryland, it will eventually have a trickle-down effect on other businesses that serve health care, as well.  It looks like we are in for a rough ride unless something miraculous happens.

We're Not Alone

The trade journal for our industry, Modern Healthcare, had a recent article entitled, "Staff Cuts - Industry claims that fed's debt reduction plans will lead to massive layoffs" and it certainly hit home.   After what was announced yesterday at WMHS that we would be separating around 20 employees from the system, but all tolled eliminating 95.1 positions of our 2200 positions, the article was very timely.  For 2013, the job loss numbers are projected to range anywhere from 250,000 to 766,000 with hospitals suffering the greatest loss.  The article noted that hospitals across the US are streamlining operations in preparation for spending cuts in Medicare.  My blog of September 14th, the State of the System, laid out the challenges that we have been experiencing as well as what is on the horizon for WMHS.   The State of the System report served as a backdrop for the actions being taken this week. These are not easy times, but certainly we have an obligation to our community to ensure that we are providing health care in a way that we enhance quality, reduce cost and improve the overall health status of the community.

A Very Challenging Week at WMHS

Today and continuing the rest of this week, we are impacting the lives of a number of people at WMHS as we implement some changes that will result in staffing reductions.  We have worked very hard to minimize the number of employees who will be separated from the organization; however, even if one individual is separated, it is too many. 

In anticipation of these staffing reductions, we have kept vacant positions open to the extent that we could throughout the year in an effort to eliminate as many positions as possible and not affect people.  Fifty-four full and part-time positions have been eliminated, saving the equivalent of full-time 40 jobs.  Another 35 employees will have their hours reduced.  When it's all said and done, around 20 employees will be eligible for other vacant positions that have been held open and another 20 employees will be separated from the organization and offered severance benefits.  This will be a difficult week for our staff as well as our department directors and managers.  

We have been asked why this process took so long.  That is an easy answer.  Our goal from the onset was to minimize the number of employees impacted.  We could have rushed through the review process and affected a lot more individuals, but we chose to be more deliberate.  My apologies to the staff of WMHS for not communicating our staffing changes sooner than this week.  I know the stress that many of our employees have experienced by not knowing what was going to happen.  But, I stand by the process that we used.

These will continue to be challenging times for hospitals.  We were not the first to separate staff and we won't be the last, but I would like to think that we acted in the best interest of our staff, as well as our community, by being as methodical in the process.