"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Monday, March 4, 2013

Projected Impact of Sequester Cuts on WMHS

Leading up to the March 1st Sequester cuts and over this past weekend, there were numerous articles as to the potential impact of the cuts on hospitals and health care systems across the nation and in Maryland.  Health care provider cuts, which equate to $10 billion, are anticipated for April 1st. 

Last year at WMHS, we anticipated that cuts would occur and took steps through a Quality Cost Initiative to reduce the cost of care along with improving quality and making our patients / community healthier.  We took steps to reassess every aspect of the care that we provide and looked to see how we could deliver better care more efficiently.  In addition to a labor savings, we also looked at our supply costs focusing on total joint hip and knee implants, cardiac implantables, drug costs, better blood product utilization, better ways to reprocess equipment, an improved approach to waste management as well as other initiatives.   By looking at both labor expenses and supply expenses through this Quality Cost Initiative, we were able to save almost $8 million.  As a result, I feel that we are better positioned to address any impact on Medicare and Medicaid funding brought on by Sequestration cuts. 

It is important to note that we are not completely out of the woods.  We took steps to address the 2% impact of the cuts for this year's operating budget; however, changes to the Maryland Waiver are still an unknown and we are currently negotiating our next three-year agreement as the Collaborative of ten TPR (Total Patient Revenue) hospitals.  In addition, if Congress reaches an agreement on entitlement cuts, health care could fare far worse that a $10 billion cut.  I, along with members of the executive team, will continue to monitor this issue and attempt keep everyone informed in a timely manner.

No comments:

Post a Comment