Making the Case for Change Without a Burning Platform · PDF fileSix Sigma Journey 5 Becoming a Learning Organization ... BJH and WUSM proving recruitment assistance and consulting

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Making the Case for

Change Without a Burning Platform

Presented By: Rex P. Budde, CPA, MBA

President and CEO

Southern Illinois Healthcare, Carbondale, IL


2

Region’s second largest employer

3,700 total employees

Service area encompassing the southernmost 16 Illinois counties

Tax-exempt health system with over $100 million in

uncompensated government sponsored care and in excess of $9

million in charity care in FY 2015

Region’s only dedicated cancer center

National acclaim for cancer, cardiac, stroke, bariatric, breast

imaging and rehabilitation services

Affiliations with The BJC Collaborative, Prairie Heart Institute and

Rehabilitation Institute of Chicago.


3

Financial History of SIH

YEAR INVESTMENTS DAYS CASH ON HAND

CASH TO DEBT

DEBT TO CAPITALIZATION

2001 $ 45,822,000 96 63% 40%

2005 $ 145,580,000 262 122% 39%

2010 $ 228,349,000 255 167% 30%

2016 $ 378,903,000 280 219% 25%

Financial Ratios


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Financial History of SIH

YEAR ADMISSIONS ED SURGERIES OUTPATIENT

MARKET

SHARE

2001 13,666 55,809 7,628 175,217 46%

2005 15,068 59,630 8,366 228,768 43%

2010 15,507 64,836 9,964 262,558 48%

2016 17,804 72,791 11,425 351,894 54%

Volumes/Market Share


Six Sigma Journey

5

Becoming a Learning Organization

2004

– Introduction of Six Sigma, Work-Out, Change Acceleration Process

– Established the process improvement department

– Trained 4 Black Belts, 12 Green Belts, and 16 Change Agents


Lean Journey

6


Oct 2011

• Rapid Cycle Improvement Events

Dec 2011• Lean Daily Management

March 2012• Strategy Deployment


X Matrix Process

7


Step 4: WHO?

Resource Deployment

Step 3: HOW?

Which Key Processes?

Step 1 : WHAT?

Breakthrough Thinking

Step 2: HOW FAR?

This Year?

Step 5: HOW MUCH & WHEN?

Measures?

Top Level X Matrix


New Goal Emphasis

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• Behaviors observed in an organization indicate what’s important to the people of the organization.

• Modeled behavior drives culture.

• Culture drives patient experience.


Creation of SIH Medical Group

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Physician Involvement

• Formed in 2006 to employ high end specialists.

– Created to facilitate physician recruitment to rural

market amid the Illinois medical liability insurance

crisis of 2004-2006.

• Southern Illinois Medical Services, NFP (SIMS)

– 501.c.3 not for profit.

– Wholly owned subsidiary of Southern Illinois Hospital

Services.

– Governed by SIMS Board of Trustees.

• Initially targeted 20-30 physicians


Creation of SIH Medical Group

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Today

• 157 physicians

• 62 advanced practice providers

• Over 550 employees at 29 practice locations

• Over $75 million in net revenue


Creation of PHO – From 2009 to Today

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• PHO Physician Steering Committee formed

• Interim Board of Managers formed and Quality Health Partners

created

• Key QHP executives chosen

• QHP Physician Network closed

• Clinical performance measures chosen, agreements completed,

and negotiations begin with commercial payers

• Physician and hospital clinical integration

• Assess Medicare ACO operations and develop population health

strategy tactics


Creation of Integrated Leadership Teams

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• Multidisciplinary group of physicians collaborating with the CEO,

hospital administrator, CMO, nurse executive and IT with a focus on

addressing operational issues that impact patient care, patient

safety, patient experience and physician workflow

• Teams formed - MHC 2011 / HH 2012 / System ILT 2014

• 247 issues addressed since 2014

• Benefits of ILT

– Improves quality of care

– Improves physician engagement and satisfaction

– Builds interdisciplinary relationships

– Improves relationship between administration and physicians


The BJC Collaborative - to achieve even higher quality care for

the patients served by these independent not-for-profit health

care organizations

The Collaborative members have a footprint of 6,855 staff

hospital beds spanning Missouri, Illinois and Kansas, and

combined annual revenues of over $9 billion focusing on:

Population Health Management, Clinical and Service Quality,

Capital Asset Management and Information Systems and

Technology.

Affiliation with BJC HealthCare

Upstream Collaborative Relationship


Affiliation with BJC Healthcare


http://www.bjc.org/About-Us/The-BJC-Collaborative

http://www.bjc.org/About-Us/The-BJC-Collaborative


• Clinical Engineering Operations Committee: Capital Equipment Savings

of $104,221,558 (SIH savings of $9 million)

• IT Operations Committee: CCMR work and Epic

• Clinical and Service Quality: Reduction in catheter associated infection.

• Government Relations: Sharing information on various legislative issues,

such as Illinois managed care and Missouri telehealth statutes.

• HR/Lifelong Learning: Sharing of best practices such as retention

strategies and voluntary turnover.

• Legal: Antitrust Training & Evaluating Shared Services Platform options.

• PR/Communications: Dedicated BJC Communication Team to share

success stories.

Upstream Collaborative RelationshipParticipating in the BJC Collaborative


• Case Management: A SIH nurse navigator has been placed at BJH to

coordinate transfers to/from SIH & BJC

• Neurosciences: SIH neuro team access to ClinDesk with Washington

University for shared patients

• Telemedicine/ICU: SIH and surrounding hospitals provide telemedicine

services with WUSM specialists

• Oncology: Second Opinion Clinics for SIH patients with WUSM

• Trauma: BJH and WUSM proving recruitment assistance and consulting

services to SIH in development of a Trauma Center

• Pediatrics/OB: SIH Outreach Clinic with BJH for remote EEG and high

risk pregnancy ultrasound

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Participating in the BJC Affiliation


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Financial Projections That Spurred Concern

Future Vision

Expense Growth Rate Average

Base Case 7.0%

Controlled Cost Growth 5.5%

Income from Operations

Base Case $ (224,340)

Controlled Cost Growth 252,730

Operating Margin Target

Base Case 4.0% -3.53% Controlled Cost Growth 4.0% 3.98%

Days Cash on Hand Target

Base Case 300

Controlled Cost Growth 300

Fiscal 2013 to

2023

(Dollars in $000)


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Financial Projections

That Spurred Concern

Healthcare Reform Effect

Fiscal 2011through 2022

Future VisionMEMORIAL

IP Rate Reductions $ (53,664,958) OP Rate Reductions $ (22,152,071)

Disp Share Reductions $ (36,492,348)

Healthcare Reform $ (112,309,377) Coding $ (34,729,001)

Wage Index Reductions $ (4,804,831)

Total $ (39,533,832) TOTAL MEMORIAL $ (151,843,209)

HERRIN

IP Rate Reductions $ (22,321,587)

OP Rate Reductions $ (9,381,621) Rehab Unit Rate Reductions $ (10,485,780)

Rehab Unit Disp Share Reductions

$ (3,159,590)

Healthcare Reform $ (45,348,578)

Coding $ (14,554,963) TOTAL HERRIN $ (59,903,541)

GRAND TOTAL $ (211,746,750)

Herrin’s Medicare Dependent Status Ended in FY 2013


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Vision SIH

Need for Change

The Environment Has Changed• Reduced reimbursements

• Reduced overall demand

• Increasing competition

The significant

challenge will be

accelerated with

the help of a

partner –

Huron Consulting

Group

Proven ability to

identify and

achieve millions of

dollars of cost

savings and

revenue

improvement

Multi-disciplinary Teams

System-wide initiative

Goal: To Maximize

efficiencies while

enhancing our

commitment to providing

the highest quality

patient-centered care.

Margin Dilution is Real• $45 million of cost reductions or

operating income from new

revenue is needed over the next

3 years

Efforts Underway• Lean teams and initiatives

• BJC Collaborative

• Waste elimination


20

Vision SIH

Guiding Principles

• Initiative is owned, led and managed by Southern Illinois Healthcare,

• The Initiative goal is to improve our operational and financial performance by

transforming how we do our work and establishing new ways of defining success.

• Our fiscal responsibility as stewards of a limited resource is as important as

delivering high-quality care. We need to anticipate and prepare for inevitable

changes in our operating environment.

• We are not looking for “business as usual.” We have to challenge what we are

going and now, and look for ways to capitalize on our individual and collective

strengths while improving our financial health while maintaining or enhancing

service, quality, and safety. We will leverage best practices and strive to achieve

standardization.

• The SIH leadership team needs to share equally in accountability and actions,

and be supportive of decisions and consistent in communications.

• The strategy deployment, daily management, and rapid cycle improvement

processes will be leveraged to support the Vision SIH efforts.


21

Vision SIH

Communications Plan

Principles:

• Communicate transparently

• Advance communication to management

team to catalyze meaningful conversations

• Create a means to gain employee input/buy-in

• Be mindful that anything shared with

employees may be shared with local media


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Vision SIH

Communications Plan – Communicating Work Through Teams

There were nine

Vision SIH teams

represented on

an SBAR

template that

was utilized for

all system-wide

communications.


23

Vision SIH

Communications Plan – Communication Coordination

• The Marketing & Communications team logged all

past, present and anticipated communications

with a goal of limiting Vision SIH communications

to one per day. Not always possible.


24

Vision SIH

Communications Plan – Celebrating Progress

On multiple

occasions when

fatigue was

beginning to

show, info-

graphics were

used to celebrate

progress and to

motivate EEs.


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Vision SIH

Communications Plan – Lessons Learned

• Communication key to successful change

management.

• Plan and execution strong, line-of-sight

communication from managers seen as

improvement opportunity.

• “Voice-of-customer” sought but not sufficient to

gauge Employees readiness for change

• Readiness for change within organizational context

key to success.


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Vision SIH

Results


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Next Steps

Conversion to Epic• Multiple EHR systems • Single, totally integrated, IT

solution• Optimize clinical and revenue cycle

Information• Real-time course corrections• Prerequisite to the analytics

required to manage Population Health

Other Next Steps• Address “gaps” (PAC and nurse

coordinator’s roles)• Build “CCMR with BJC

Collaborative project • Pursue relationship with present

ACO or establish an ACO• Create a Behavioral Health

program strategy• Create a diabetes management

program


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The Learning Journey

• No sacred cows

• Emphasize local data in making HR decisions

• Underestimated the anxiety level, both

managers and staff

• Communication techniques

Slide 29

Thank You!

Rex Budde, CPA, MBA

President and CEO

[email protected]

618.457.5200, ext. 67100

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Making the Case for Change Without a Burning Platform · PDF fileSix Sigma Journey 5 Becoming a Learning Organization ... BJH and WUSM proving recruitment assistance and consulting