Nashville (TN) General Hospital at Meharry is facing a 10% budget cut, which could mean cutting its oncology and cardiology clinics, the adult day-care program at Knowles Home Assisted Living & Adult Day Care center, and eliminating $350,000 in funding for Our Kids, a program for abused children.
The facility treats large volumes of patients who have little or no insurance, so its uncompensated care costs are offset by the millions of dollars it receives from the city annually. Recently, however, Mayor Karl Dean asked the Metro Hospital Authority and other city departments to plan for 10% budget cuts.
Hospital leaders nationwide are facing similar heart-wrenching choices in order to keep their hospitals afloat or to better position their health systems for success on the other side of this recession. The April issue of HealthLeaders magazine examines some of the difficult strategic decisions that hospital leaders are facing right now in its cover story Jump . . . or Get Pushed. For example, should organizations trade in their current CEO for one who is more of a war-time leader? Should organizations risk trying to grow services in a down economy? Should health systems give patients more decision-making power in the organization?
Another pressing issue that hospital and physician leaders have to address is what to do about the $19 billion in available funds for electronic health records in the stimulus package. Ideally organizations could wait until the end of the year for regulations to clarify what a "qualified EHR" or a "meaningful user" means. But if organizations want to get the maximum funds available in 2011 they can't wait for the end of the year before getting started. They should get moving on this project now?at least that was the consensus this year at the Healthcare Information and Management Systems Society annual conference held this past week in Chicago.
CEOs have told their CIOs not to leave one penny from this stimulus package on the table, according to a healthcare executive I spoke with at the conference this year.
That means some tough choices will definitely need to be made for many healthcare organizations. There are manpower concerns on both the vendor and provider side about having enough qualified staff to meet this deadline. So do you cut from one hospital department to beef up IT staff? What about training? Then there is the question of financing. Money has been one of the main reasons that more healthcare organizations haven't already implemented EHRs and those constraints have not disappeared. The stimulus reimbursement will come after health systems have qualified—not before. So what are providers willing to sacrifice to meet this deadline? Senior leaders will have to make some tough choices that won't please everyone. One thing healthcare executives seem to agree on, however, is that providers had better secure their position in line with a vendor sooner rather than later to have any chance of qualifying for the maximum reimbursement.
Organizations shouldn't be panicking, however. There is still time to for due diligence to make sure that the vendor they choose will be able to qualify for the "meaningful use" definition when it's finally revealed and that it has the available resources to provide training and support. But perhaps more importantly, they'll want to ensure that the vendor they choose will still be around in five years.
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The state of the economy has many boards wondering about the capabilities of their executive teams. Experts say it will benefit organizations to take a close look at its productivity and processes, questioning cash flow and liquidity, strategies and action plans, and risk profiles. Boards should also be determining whether the right executive leadership team is in place to guide the organization into the future.
Provena Covenant Medical Center, a non-profit hospital in Champaign, IL, lost its tax-exempt status five years ago when local officials determined it was not providing enough charity care for needy patients. In 2008, the state Supreme Court agreed to review an August state Appellate Court ruling that dealt a huge setback to non-profit hospitals. Provena's attorneys argued that free care should not be the sole criteria when deciding whether a hospital is a charitable institution, but the appeals court rejected that position. The decision sent shock waves through Illinois non-profit hospitals, which account for roughly three out of every four hospitals in the state and more than half of all hospitals in the country.
Over the past six months, 18 mothers and 19 newborns have become sick with a dangerous bacterial infection soon after being released from Beth Israel Deaconess Medical Center in Boston, triggering a state investigation that uncovered serious problems with the hospital's infection control practices. Ten of the infected patients became so ill that they required hospitalization, and two of those had serious complications.
Los Angeles County supervisors have agreed to pay $3 million to settle a lawsuit brought by the children of Edith Rodriguez, the woman who died after writhing in pain for 45 minutes on the waiting-room floor of Martin Luther King Jr.-Harbor Medical Center in Los Angeles. Rodriguez's death helped to precipitate the closure of the long-troubled hospital after federal regulators determined that staffers had failed to deliver a minimum standard of care.
Officials at Bon Secours Hospital are asking Maryland for $5 million to keep the struggling hospital afloat for a year while they devise a new strategy to offer healthcare to a troubled West Baltimore community. The company and the religious order that oversee Bon Secours have not ordered its closure, but executives say the hospital needs an infusion of cash and a new vision to avoid shutting its doors.
Indianapolis-based St. Vincent Health is ending a long-standing policy of turning over accounts of patients who are behind on their bills to an outside collection agency. The move could affect an estimated 35,000 patients with outstanding balances totaling about $70 million at St. Vincent's 17 Indiana hospitals. Previously, St. Vincent had turned over the accounts after the patients' bills were 120 days past due. St. Vincent representatives also said the organization is no longer charging interest on debt.
Shriners hospitals are considering closing a quarter of their facilities as donations stagnate, costs increase, and the charity's endowment shrivels. Officials at the Florida-based organization say it is siphoning $1 million a day from its endowment to balance the budget for 22 hospitals in the U.S., Canada, and Mexico. Meanwhile, they say, that fund has fallen to $5 billion from $8 billion in less than a year because of the sputtering stock market and a charitable giving slump that has hurt philanthropies nationwide.
St. John Health has agreed to pay $13.5 million to settle allegations that it conspired with other hospitals to suppress nurses' pay in the Detroit area. A federal judge in Detroit has set a May 13 hearing to consider the deal. A settlement won't close the class-action lawsuit: Other healthcare providers accused of violating antitrust laws by exchanging information on pay still are part of the case.
Virginia, Maryland and Washington, DC, will receive more than $73 million in federal stimulus funds to expand and improve child-care and immunization programs for low-income families, the Obama administration announced. The money is part of a two-year, $2 billion initiative passed by Congress in February that gives states more money to help low-income families struggling with rising child-care costs.
