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Part 2: How a CEO Empowered Staff to Save $3M and Their Jobs

Philip Betbeze, for HealthLeaders Media, April 1, 2011

During the recession, Chicago's Swedish Covenant Hospital chief Mark Newton was unwilling to take draconian measures such as layoffs. Instead, he deployed a tactic from his entrepreneurial background: he challenged his staff to find ways to cut costs themselves. Read Part 1 of the story here.

The first step of Newton's strategy was to communicate frankly with staff. "We decided that if we were candid [with] our 2,200 employees, if they were told the situation, and they realized we were all in the same boat together, they would respond," he explained.

The goal was saving $3 million in a year, which was important in itself, but an additional benefit was in helping staffers internalize a sense of ownership in the institution. As the health of the institution improved, so would the health of their jobs, so to speak. The communications department got involved by setting up a visual aid—a beaker—that would indicate progress toward the goal as the year progressed.

"We reported it out every month and identified stories where people made an impact," Newton explained. "I did not have a consultant, nor did we say people had to ask for permission to use a cost-saving or revenue-generating idea. There was no wasted time in approvals and meetings. If you're doing something that needs the boss's input ask him, then do it. We wanted them to take the risk. It's the ultimate in delegation."

A few of the results:
  • One person in Dietary had a whole different way of buying milk and other food products. That saved $15,600 a year.
  • The cafeteria began selling reusable coffee mugs to save on paper and plastic cup costs.
  • The surgical recovery area reorganized their storeroom and created new par levels, saving $5,700.

Other employees worked on renegotiating contracts with vendors. People got involved in job-sharing ideas, meaning many departments took on tasks that were traditionally outside their boundaries. One department instituted a $20 no-show charge. Another changed how the hospital scheduled surgeries to be more efficient.

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5 comments on "Part 2: How a CEO Empowered Staff to Save $3M and Their Jobs"


amber rotter (1/13/2012 at 5:22 PM)
How did Mark Newton's daughter make 50,000 in 2009? What exactly does she do? Oh,I also remember her winning the 10,000 Gala raffle. Was that fixed Mark Newton.Stop firing good employees and acting like you cold hearted jerks are compassionate. Get ris of your daughter's bullshit position. Everyone,especially doctors, hate you. What does Derek Kelly do that he made 339,493 in 2009? Sorry Guaccio, he made more than you.How is it that Mary Shehan also has a family member that is getting paid. P.S. Stop trying to hire more physicians. We have no respect for physicians that cannot be successful on their own. We all know that other hospital is buying Swedish. It's funny how you made sure the vocal, outspoken honest nurses were off when magnat was there. Once you had your magnet status,you got rid ocf everything good. You also cut people's pay and understaffed the floors. NOthing good has happened since you have been there. You pretend to be a class act but you are the opposite.

RN (7/3/2011 at 10:29 AM)
re: Don's post. Don, you forgot other ways that the hospital saved money DURING that year. The evening and night shift differentials were cut from dietary, public safety, maintenance and housekeeping workers. It went from $2/hr to $1/hr and has never been restored. It was done quickly and quietly.

Mike (5/11/2011 at 4:50 PM)
I am proud to say that Mark Newton was one of the most influential leaders and mentors I have had the privilege to work with in my career. he took a the time to invest in my growth and development as a young professional in healthcare that has led to my professional success.