Scripps Health to Restructure Management

John Commins, October 21, 2010

In an effort to adapt to changes and financial challenges created by healthcare reform, Scripps Health has implemented a horizontal management restructuring model that it says will cut costs, improve care, and preserve jobs.

The San Diego, CA-based, nonprofit health system is reorganizing every department within this horizontal co-management structure to standardize clinical and operational functions across its five hospitals and 20 outpatient centers.

"Very few health systems have a complete system-wide horizontal leadership structure to go along with the traditional vertical management structure," says Chris Van Gorder, Scripps Health president/CEO. "We believe we are one of the first to move in this direction."

Van Gorder says the management scheme will cut costs by eliminating unnecessary variations in how the facilities operate and deliver care. The changes began Oct. 1, in line with reductions in reimbursements from Medicare and commercial health insurers.

Some parts of healthcare reform are being felt now—years before they were expected, Van Gorder says. Government payers are cutting reimbursements, and private payers are following suit, prompting health systems to either adapt or face losing millions of dollars in operational income.

"As reimbursements fall, we must reduce our costs and improve the already high quality care we provide without resorting to across-the-board cuts and layoffs," Van Gorder says. "I want to make sure that we take care of our people, just as they take care of our patients. As part of this process, we are committed to preserving jobs for those who are displaced by this restructuring."

John Commins

John Commins is a senior editor at HealthLeaders Media.

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