In the early 1950s, people of a mid-sized town in Southern California found themselves in desperate need of a new hospital.
A fundraising campaign was formed by civic leaders and healthcare professionals to raise money to build a true community hospital — one owned and governed by the people.
This drive led to the opening of the original 112-bed Hospital in 1956. The Hospital has undergone a vast transformation since then; it is now a regional medical center offering nationally-recognized departments and services, with 418 general acute beds, 48 licensed critical care beds, 13 state-of-the-art surgical suites, and a full-service Emergency Department with a Chest Pain Center and nationally certified Stroke Center.
External Environment Opportunities & Threats
- The town and surrounding County community markets are growing.
- State of the art regional medical facilities and skilled staff.
- Community owned and historically a cultural icon.
- National Healthcare Mandate (Obama care) will reduce government insurance (Medicare) hospital payments.
- Increasing state government regulation adding to operating costs.
- Community needs expanding with increasing operating costs.
- Intense competition from surrounding private hospitals.
- Hospital reputation is declining.
- Considering the expanding community needs, The Hospital needed to find ways to deliver services to a growing volume of patients with the same (or less) facilities and resources.
- With the possible implementation of the National Healthcare Mandate, the Hospital may need to provide more services with less revenue (40%).
- With increasing competition from more medical providers in the community, the Hospital needs to improve “customer” satisfaction through superior service (re-branding).
- Market growth through customer satisfaction will need to translate into effectiveness (quality) and efficiency(speed) in delivering medical services.
- Increasing government regulations will require discipline in compliance and accuracy in documentation to minimize non-value overhead burden.
- To attract the necessary professional talent to execute the strategy, the Hospital will need to be recognized in the community as a “best place to work.”
Organizational Development Project:
Hand & Associates targeted the Hospital’s Emergency Department (ED). The rationale for choosing ED was based on the following facts:
- ED treats the highest volume of patients from the community.
- Most critical and urgent needs served.
- Highest legal risk to the hospital.
- Most visible to the community.
- It is the economic “engine” of the hospital (50% of all revenue).
Data Gathering & Diagnostics
These are some of the findings from our OD expert’s on-site inspections/interviews:
- “Purpose” and “direction” were unclear among staff and no measurable performance metrics existed.
- Skills were inconsistent across the department.
- General attitudes and morale were negative and uncooperative at times.
- Coordination/teamwork lacking especially between nursing and physicians.
- Management span of control too broad for performance monitoring & coaching.
- Critical work standards were not identified and/or enforced.
- Bottlenecks in the system negatively impacted ED throughput times.
- Patient discharge practices of “batching” exceeded ED capacity.
- Staff nursing scheduling was inconsistent and unbalanced – perception of favoritism.
- Admissions/ED interface lacked coordination interfering with process “flow”.
- Cath-Lab/Stemi team interface lacked robust coordination process.
- Conflicting staff values regarding ED values and priorities.
- “We/They” issues among, nurses, travelers, physicians impeded communication.
The only metrics that could be gathered are those shown in red in Figure II below:
- Communicate to staff and review “future state” metrics on key performance processes.
- Process-flow all ED key processes from “door to discharge.”
- Centralize control and approval of scheduling with ED Direct initially.
- Organize staff into multi-functional ED teams (1) Intake Team, (2) Critical Care Team, (3) Moderate Care Team, (3)Routine Care Team, (4) Registration & Discharge Team.
- Hire second shift supervisor reporting to day shift manager.
- Create ED team “event” purpose to reconnect the provider “calling.”
- Team development for each of the four multi-functional teams.
- Create daily and monthly communication processes (Morning “huddles”).
- Develop critical work standards and manage to policy.
- New-hire orientation process to socialize in the ED norms and expectations.
Subsequent to the implementation of the above recommendations, the following key metrics were gathered – see “Actual” column (green) in Figure III below:
- Processing 225 patients versus 147 [a 58% increase in volume], increases capacity equivalent to 4 additional beds and 5 full time nurses. (Per corporate calculations)
- 5 Rn’s at $98K (salary & benefits) = $490,000 per yr.
- 4 additional beds @ 400 sq ft = 1,600 sq ft X $2.50 per sq ft = $4,000.
- Additional patients treated who otherwise would have to be redirected to another hospital or leave without being treated.
- 108 additional patients per day (255 vs. 147) X 365 days = 39,420 patients a year @ $600 average per visit = $23,652,000
- 7% of 147 patients leave without being treated and the Hospital not receiving payment = 10 patients per day X 365 days = 3,650 people per year @ $600 average per visit = $2,190,000 lost revenue.
Total yearly financial improvement = $26,336,000 (three year payback $79,008,000)
Other intangibles included: (a) better healthcare delivered to the community and (b) less funding by the community for hospital operations.