Running a hospital today causes its share of headaches,just ask the following executives.
Hospital administrators have to deal with the effects of reimbursement fluctuations, negotiate with health insurers and other payers, keep up with population growth through service and facility additions, wrestle with a shortage of vital registered nurses and find money to pay for things such as earthquake retrofitting and higher salaries.
The Business Journal queried a sample of Orange County’s hospital bosses on two central issues: their biggest achievement last year and the top challenges this year.
An edited version of their answers follows.
RALPH CYGAN
Chief executive
UCI Medical Center
Orange
What was the hospital’s biggest operational accomplishment last year?
Securing funding and final approvals for construction of the new ($365 million) university hospital, scheduled to break ground this spring.
This is the culmination of nearly a decade of planning and represents a major milestone for the development of UC Irvine Health Sciences’ patient care, education and medical research programs.
What are the hospital’s biggest challenges in 2005?
Cost inflation driven by staffing shortages, especially nurses; information and diagnostic and treatment technology improvements; and pharmaceutical inflation.
Threats to revenue including Medi-Cal reform, Medicare cutbacks and growing burden of uninsured patients.
How are you handling the challenges?
Evaluating priorities to ensure core mission is sustained.
MICHAEL STEPHENS
Hoag Memorial Hospital Presbyterian
Newport Beach
Our biggest operational accomplishment was to address the lack of facility capacity to meet patient volumes. Finding ways to admit and treat more patients with the same number of inpatient beds and emergency room space required great management skill and creativity.
Our No. 1 priority is the planning for and move into the new Sue and Bill Gross Women’s Pavilion. This addition to our clinical capabilities will not only consolidate services for patient convenience, but will add some well needed additional beds.
We also will continue to focus on the need to provide the latest technology available within a payment system that does not recognize the impact of these expensive procedures and devices.
We have a number of teams in place to direct the various aspects of the transition and opening of the new tower. And we will continue to work with insurance companies and government programs to push for recognition of the impact technology has on healthcare costs.
MELINDA BESWICK
Chief executive
Anaheim Memorial Medical Center
Anaheim
What was the hospital’s biggest operational accomplishment last year?
In response to national and local economic forces such as decreased hospital bed capacity resulting from downsizing of services in some facilities, severe clinical staff shortages and increased utilization of emergency departments by patients/community members, Anaheim Memorial has managed our inpatient admission and discharge process via aggressive reorganization of our clinical units.
First, we analyzed the impact of patient admissions from the emergency room to identify ways to maximize inpatient capacity and improve patient access and care.
Operational initiatives were then implemented, including: establishment of a dedicated chest pain center and outpatient heart failure clinic, improved scheduling and decreased turnaround time in our surgical suites, a comprehensive “Home at 11 a.m.” patient discharge campaign, implementation of the Vocera wireless communication system, which enables hands-free, instant voice communications among team members, across groups and throughout the hospital.
One of the outcomes of the reorganization is that we were able to maintain zero emergency department diversion hours for three consecutive months at the end of 2004,
we did not have to close to ambulance
transports due to inpatient and emergency department overload, which had been (and continues to be) an ongoing countywide issue affecting patient access to emergency services.
What are the hospital’s biggest challenges for 2005?
As a nonprofit hospital, we anticipate the biggest challenges to be:
Ongoing clinical performance improvement
Developing opportunities to partner with physicians
Patient safety enhancements
New technology implementation
Managing staffing requirements in an environment of significant clinical staffing shortages (not only nurses, but also other clinicians and technicians
Ensuring consistent efficiencies and efficacy in the delivery of medical and nursing services
Expanding services to meet growing community need
How are you handling the challenges?
Anaheim Memorial’s leadership team will collaborate with physicians and employees to address these challenges.
Specifically, we plan to improve clinical performance by expanding physician participation in the Lumetra Collaboratives, as well as by continuous monitoring of the Centers for Medicare and Medicaid Services’ Core Measures.
Anaheim Memorial will expand participation in the next round of The Leapfrog Group’s (patient safety) initiatives and studies. Our goal is to continue to foster a culture of patient safety throughout our facility.
In 2005, Anaheim Memorial will implement new technologies, including a complete redesign of our diagnostic radiology services.
We’ve already implemented PACS and a 16-slice CT scanner; soon we’ll add new MRI, nuclear medicine cameras and ultrasound units. We also plan installation of a bi-plane heart catheterization lab.
In order to expand services to meet increasing demand, Anaheim Memorial’s two major initiatives for 2005 will be construction of an ambulatory surgery center in partnership with physicians and implementation of our Latino physician network, Conexion MD.
We also will continue with three key programs,HeartMatters (our women and heart disease program), tobacco cessation and the Advanced Endovascular Institute at Anaheim Memorial.
MARCIA MANKER
Orange Coast Memorial Medical Center
Fountain Valley
Overall growth. The hospital experienced a 21% increase in patient revenue versus the same period for 2003.
We forged new medical group relationships that added more than 150 physicians to our medical staff roster, and to support this growth we increased our employee base by hundreds over the same period in 2003.
This past year also brought new services that contributed to the growth of the hospital. With the opening of Orange County’s newest cardiovascular center in June, a new CT scanner and the construction of two new surgical suites, Orange Coast expects its growth trend to continue well into the future.
The overall shortage of healthcare workers in California and across the nation is of deep concern to Orange Coast Memorial.
As the demand for healthcare increases, along with a growing population in Orange County, the shortage of registered nurses is a documented fact. In addition, as the current population of nurses continues to age and near retirement, this critical shortage will become even more severe. A hospital cannot sustain itself without the staff necessary to care for its patients.
Orange Coast Memorial takes this fact very seriously and continues to recruit a workforce of nurses and other allied health professionals that will help us maintain and continue our commitment to provide quality healthcare to our communities.
The administration at Orange Coast Memorial believes that our employees are our strongest asset. Our focus will remain on retaining our current employee base, continuing our partnership with local colleges to encourage careers in healthcare and maintaining our innovative recruitment incentive programs.
Culture is important in any organization and healthcare is no exception. We know that creating a positive work environment and providing the very best care to our patients is paramount to retention and recruitment.
Our best source of new employee referrals comes from our own employees recruiting health care professionals they know and whose level of care they trust.
JULIE MILLER-PHIPPS
Senior vice president, service area manager
Kaiser Foundation Health Plan
What was the hospital’s biggest operational accomplishment last year?
Probably the most significant accomplishment was the groundbreaking for our second hospital in Orange County.
Built at a cost of $206 million, the Kaiser Permanente Medical Center-Irvine is scheduled to open in 2007 with a bed capacity of 150. This is one of the first hospitals that Kaiser Permanente is building that uses an innovative template focused on patient comfort.
The open design enables natural lighting throughout the interior spaces. The planning, development and design work, coupled with completing the regulatory and permitting processes that enabled us to successfully break ground last summer, were major operational accomplishments.
2004 also saw us successfully reach a 1:4 ratio of nurses to patients in our medical/surgical units for the day and evening shifts. This exceeded the state mandated ratios.
What are the hospital’s biggest challenges for 2005?
Our continuing commitment to work with our labor partners to bring our nurse staffing ratio to 1:4 on all three shifts presents a challenge. We are currently at 1:4 on the day and evening shifts in our medical and surgical units but not yet there on the night shift, which is less attractive to applicants and traditionally harder to staff.
The increasingly competitive labor market also presents challenges in recruiting other healthcare professionals such as pharmacists, laboratory scientists and radiology technicians.
We are working with a consultant to assess the strengths of our recruiting efforts and develop additional innovative approaches to attract and retain staff.
Another development is the plan to renovate and upgrade the pediatrics, and labor and delivery areas of the Kaiser Permanente-Anaheim hospital. Any construction presents challenges with increased noise levels and activity on the units. With planning and foresight we are able to keep these to a minimum.
We are applying to the state for participation in the California Children’s Services program. Receiving this certification will enhance our ability to coordinate care for special needs children.
How are you handling the challenges?
The integrated leadership model that we have in Orange County enables all issues to be reviewed, vetted and addressed from the administrative as well as the medical perspective.
STEVE GEIDT
Chief executive
Saddleback Memorial Medical Center
Laguna Hills
January marked the 30th anniversary of Saddleback’s opening. Despite a growing population, we were able to expand and enhance our productivity and maintain our days in accounts receivable at around 55.
We were able to reinvest an additional $15.8 million in payroll and benefits and an additional $7.4 million in capital investments in our facilities and services.
Saddleback’s strong operating performance, improved balance sheet, dominant market position and focused strategic direction were among the reasons that (parent) Memorial Health Services Inc.’s credit rating was upgraded from A- to A.
We implemented breakfast meetings with newly hired employees to get their first impressions, made mid-year pay adjustments in hard-to-fill positions, increased our informal rounding and increased support of an employee activity committee in planning morale-building events at the hospital. Nurse recruitment branched out to our local malls with kiosk displays and enhanced outreach with a county-wide recruitment fair early in the year.
We expanded our imaging capabilities. PET exams, a 16 slice CT and a Picture Archiving and Communication System have been added to the imaging department.
And Saddleback was the first Memorial hospital to go live with EPIC,our new clinical documentation system. It’s one of the largest and most complex projects in the history of our system at a cost of $55 million and includes an electronic patient medical record and computerized physician order entry.
We are preparing for tomorrow with Project Legacy, a capital expansion plan for the next 10 years. Meeting the healthcare needs of a booming community has stretched Saddleback’s seven operating rooms beyond capacity,a situation that has frustrated patients and physicians alike.
The administrative team has been involved with financial, architectural and program planning during the past two years. Plans to expand operating rooms, imaging, laboratory and cardiology services, replace the power plant, build a parking structure, and address earthquake retrofitting are all components of Project Legacy. Recently, a plan to address immediate needs for ambulatory surgery has been developed and will be pursued over the next year.
We will be integrating the San Clemente campus. On Feb. 1 San Clemente Hospital and Medical Center became part of Saddleback, which now is a 325-bed hospital with two campuses and a geographic coverage that extends into San Diego County.
Recruiting and retaining employees will be key. The staffing shortages in healthcare will plague us for the foreseeable future. The workforce shortage includes more than nurses: Medical record coders, radiology technicians and pharmacists are all in short supply, driven largely by the increasing demands of a growing and aging population.
We also have broadened our outreach to the youth in Orange County and give students the opportunity to experience first hand the world of health care. It is hoped that participation in youth programs will help to influence students to enter the healthcare field and relieve some staffing shortages.
Hospitals will deal with shrinking reimbursement and increasing regulatory pressures. Increasing regulatory pressure coming from new statutes such as the Health Insurance Portability and Accountability Act and Senate Bill 1953 (the earthquake retro-fitting law) continue to layer on top of existing requirements. Rising costs are driven by technology, drugs, personnel as well as claims risks for professional liability, workers’ compensation and our self-insured health plans. Low reimbursement continues from Medicare, insurance companies and managed care organizations attempting to control rising premiums.
It’s a tough environment,a tough state and a tough industry. Yet we have managed to improve our balance sheet, increase employee satisfaction and enhance our facilities and infrastructure.
One of the benefits of being part of MemorialCare is that broad, systemic issues,such as the nursing staffing ratios and decreasing reimbursement,are being addressed at our local campus level and simultaneously through our corporate advocacy office so that our concerns are heard at the state and national level.
