Interim Management / Strategic Planning Success Story
From confusion to confidence…Determined to maintain its mission, the small hospital struggled against crisis after crisis. Unifying the team, QHR inspired staff, management and employees to achieve their highest goals.
Planning to Survive
The first county hospital west of the Mississippi River,Washington was valued for generations of dedicated service. It was also in trouble.
Bent on improving care, the organization had taken on significant debt to renovate its facility. But the timing was unfortunate, coinciding with the BBA’s ratcheting down of Medicare reimbursements. Turnover at the top drained stability. And when a key physician left the area, volumes took a hit.
Combined results were grim: cash was low; morale was low; turnover was high.The board relied on QHR for interim management and rapid assessment of opportunities.
“The most support we received from QHR was a keen focus on strategic business planning,” describes CEO Don Patterson. “And a lesson in tying all our efforts back to it.”
Living the Plan
- There were six key result areas associated with the plan:
- Quality care delivery
- Customer satisfaction
- Financial viability
- Workforce excellence
- Technology
- Physician recruitment
“QHR made it easier for us to come together and not only identify our objectives but also prioritize them,” comments board chair Karolyn Leary. “The process was very beneficial…listening to each others’ concerns, we improved working relationships among the management, staff and board.”
Setting goals for each priority and integrating them into daily activities, the team tracked progress. “We’re constantly revisiting the plan,” explains CFO Greg Seubert. “It’s become a part of how we think.”The exercise also opened some eyes:
“Until Don put the processes in place to improve communication,” explains David Nacos, M.D., “we didn’t see how much we really are joined at the hip: what’s good for the medical staff is good for the hospital, and vice-versa.”
- Helping realize the plan, QHR expedited progress in key areas:
- Human resources
- Leadership training
- Critical access hospital conversion
- Facility planning
- Strategic quality management
- Nursing unit operations
- Medical staff development
- Compliance
“The situation had been desperate,” comments CFO Greg Seubert. “It wouldn’t have been much longer before tough decisions would have been made – as to whether the hospital could stay open.With QHR, things began to improve… Now we have one of the highest margins of all QHR clients.”
Planning to Thrive
Relying on QHR’s analysts to recommend its best course, the team opted to seek critical access hospital status. Downsizing to 25 beds would still enable it to serve its average census, and the increase in reimbursements would be substantial at $900,000 annually.
Streamlining processes and retraining employees, Greg Seubert’s team achieved the cash flow the hospital needed. Not satisfied, they sought additional gains:
“We set targets for everything from wages and supplies as a percent of net revenue to bad debt expense… we monitored progress and shared the data with the QHR regional support. Their advice helped us make the right moves.”
- Also sharing monthly reports with department managers, Patterson and Seubert encouraged them to take control of their budgets, using QHR leadership training to develop their management skills. After two years:
- A/R days fell from 76 to 62
- Days cash on hand nearly doubled, from 58 to 106
- Supply cost as a percent of net revenue fell from 20.8 to 10.6
- Salary expense dropped from 44.1 to 40.2 percent of net revenue
- Operating margin rose from -4.6 to 5.1 percent, while total margin jumped from -0.8 to 10.4 percent.
Performance tracking also included service areas.“We benchmarked patient satisfaction – from how good the meals are to housekeeping to medical and nursing services,” describes Dr. Nacos.“We set high targets, and watch for areas to improve.” Successful physician recruiting efforts also help Washington meet patient needs. “The staff is growing, volumes are growing…consulting specialists appreciate the patient-oriented environment we offer.”
To keep improving quality and service, the team worked on employee retention.The switch to critical access allowed for more competitive wages, but to attract the best, the team got creative.
“With help from QHR, we figured out what people wanted,” describes Patterson, “and designed innovative options to give it to them. As a result, turnover is down from 20 to 4 percent.”
The new program offers more flexible scheduling, work-from-home arrangements and job sharing. And employees who don’t need benefits can opt out, netting ten to twenty percent higher pay.“We’re working on attracting the aging workforce – especially nurses. Some may want to semi-retire. By being accommodating, we can keep good employees – and keep them happy.”
Ready for the Next Challenge
Financial successes have permitted Washington County Hospital to make bold plans.“With QHR’s help, we’re evaluating whether to replace the facility or renovate them,” smiles Patterson.“We’re pleased to have those options.” QHR continues to support the hospital’s progress:
“We have a great relationship with QHR,” asserts 15-year board member Karolyn Leary. “The consulting services enable our team to run the hospital better day to day. The education raises our managers’ expertise… and helps our board see the big picture.”
The Secret of Success
Washington County Hospital took courageous steps to ensure its future. Leaders share their views…
“Leading the switch to cost-based reimbursement, QHR helped revive this hospital,” points out CEO Don Patterson.“And with a unified strategic planning process… we’re a team now.”
“QHR helped us create a plan and work the plan,” asserts CFO Greg Seubert. “But healthcare is a tough business; we’ll continue to rely on QHR for support.”
“When I first joined the board, I saw the hospital’s potential,” remembers Karolyn Leary, board chair. “With help from QHR and the super leaders they’ve brought us, we’re making fine progress.”
“The problems we face can seem insurmountable. But QHR’s resources are tremendous. It’s great to know we have them when we need them.”
