"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, July 8, 2013

So, How's It Going?

Someone asked me the other day, "How’s it going?" The question was related to my health care life, not my personal life.  With so many hospitals and health systems struggling, especially those in Maryland with about an average operating margin of 0.83%, just how is WMHS doing?  The answer was actually, we are doing much better than most in Maryland and comparably sized and structured health systems outside of Maryland. 

First, let me start with the construction of a new hospital from 2006 to 2009.  If we would not have acted in 2004 to begin the process of planning, designing and building a new hospital, we would be in dire straits at this point in time with no relief on the horizon.  One of the two hospitals would have been closed by now.  We built a new hospital with 275 beds; we now have an average daily census of 170 patients due to the more recent changes in health care.  At one time, both Memorial and Sacred Heart Hospitals combined for a total of 464 beds.  The vision that the Board and executive leadership in this organization had was remarkable.  We knew that a new hospital had to be built rather than investing well over a hundred million dollars in two rapidly aging campuses.  We certainly had our critics and our detractors, but we persevered.  I can't imagine in today's environment how we would be faring with little to no ability to borrow money, the cost associated with maintaining an infrastructure that was built starting in 1929 and trying to position ourselves for potential alliances in order to remain viable--not to mention implementing the triple aim of health care reform (better care, reduced cost and addressing population health). 

Secondly, roll the clock forward to 2010 and accepting the Maryland Rate Commission's offer to implement a new payment methodology called Total Patient Revenue (TPR).  Through TPR, we dramatically changed how we do business, shifting from a volume-based model to a value-based model, but ultimately preparing this health system for a transformation that the health care industry has never seen before.  We are now one of a very limited number of hospitals and health systems across the country extremely well positioned for the complete reform of our industry.   We just ended FY 2013, financially and operationally strong. We have thoroughly educated our staff and physicians on the changes in how we do business and now we are educating our community through Meeting the Challenge of Health Care Change.

As I have blogged before, this is a tough business, but a rewarding one in so many ways.  So, how's it going.........just fine, but because of the unbelievably strong and talented people associated with WMHS.

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