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Q&A: Banner CEO on 'Getting the Cost Out'

Philip Betbeze, for HealthLeaders Media, December 13, 2013

I define the customer base as either frontline parts of the organization who are in the direct caregiving environment or an external customer who is trying to interact with our organization for some service. We're measuring everything we can. Doing it with data offers a great opportunity to find improvement.

Most people think what they're doing must be right. If it wasn't they wouldn't be doing it. What that means is it becomes very difficult to self-analyze in looking for opportunities. We've developed a culture where that's ingrained. We see ourselves as a company that is looking to enhance reliability and reduce variability in order to produce better clinical outcomes. One of the key ways to reduce cost in any organization that is producing some product or service is if you reduce variability, you increase reliability.

HLM: What did you mean when you guaranteed a "soft landing" for any employee whose job was eliminated in this process?

Fine: One, we have good employees and we want to keep them. The question becomes if we are going to do something that gains efficiency but results in a reduction in workforce, how do we reallocate resources? We will continue to grow, so we can retrain or find new opportunities for them in Banner's sphere of influence. So it's definitely not a guarantee, but what the "soft landing" really means is identifying where they can contribute.

HLM: As you've gone through this process re-engineering journey with your employees, what is the most surprising thing you've learned?

Fine: I think there are three surprising things. One, I've learned how hard it is for people to self-analyze the work they do. Also how difficult it is to identify and apply data to establish a set of actions to be implemented and it's very difficult for people to maintain their objectivity.

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1 comments on "Q&A: Banner CEO on 'Getting the Cost Out'"


Deborah Kimbell (1/6/2014 at 11:23 AM)
Do you mean $.70 cents on the dollar? The article says it's seven cents on the dollar, but I'm looking at this news report from 2011: "Arizona hospitals will now be paid 70 percent of what it costs to care for a Medicaid patient, said Pete Wertheim, a vice president with the Arizona Hospital and Healthcare Association. "We are very disappointed to learn that they have approved another 5 percent cut," Wertheim said. "The cumulative effect of all of these cuts have really begun to take their toll on hospitals." Read more: http://www.azcentral.com/news/election/azelections/articles/2011/11/25/20111125arizona-medicaid-cut-approved-by-feds.html#ixzz2pdV0RoQT