When it comes to making difficult financial decisions at
hospitals, it’s crucial to maintain transparent communications with employees
and the community. How one small hospital weathered a financial crisis was the
focus of a presentation Oct. 26 at a hospital best practices workshop presented
by the Maine chapter of the Healthcare Financial Management Association in Auburn,
Maine.
Wendy Jones, controller at Blue Hill Hospital in Blue Hill,
Maine, shared the successes of the hospital’s process of making important
decisions during a difficult financial environment.
By the end of 2008, Blue Hill Hospital, a small, 25-bed
critical access hospital, was “coming up on a year of huge operating losses
with a 2009 fiscal year budget approved with a nearly $1 million deficit,”
Jones said.
Historically, Blue Hill Hospital had always received a great
deal of endorsement funds, however, due to the financial crisis in 2008, those
endorsements had decreased substantially leading to the beginning of the
hospital’s financial troubles.
“Blue Hill’s mission had never focused on finance. It was
the culture of Blue Hill itself,” said Jones. “Until this financial perfect
storm happened, the executive management couldn’t grasp the possible crisis
coming, and when it did, the hospital’s governance committed to change but didn’t
know what to do.”
Jones said it was at this time that the executive management
of the hospital had to start making difficult decisions, which included closing
the hospital’s well-known labor and delivery program.
In addition, Blue Hill Hospital utilized support from their
hospital affiliate, Eastern Maine Healthcare Systems (EMHS), and began
outsourcing areas of the organization to EMHS, including various fiscal
services and accounting.
All of these decisions, said Jones, were made in conjunction
with effective communication among staff and the community as a whole.
“Physicians were worried about how they would achieve their
missions and continue to take care of the community, while the community was
wondering, ‘will we still have a hospital to go to?’” she said. “It’s important
to understand the diversity of your affected groups and their point of views
that they are coming from. Putting as much information out there as early as
possible – that tends to work well.”
During this financially challenging time, Blue Hill Hospital
discovered a number of tactics for making difficult financial decisions that
really worked well for them, Jones said. The successful tactics included
management training to ensure managers were given the tools they needed;
establishing attainable goals with time parameters; and always maintaining
alignment with governance, which, in some cases, required new hospital
committees to be formed. Jones added that as far as alignment with governance
goes, it’s important to know “when to stop fixing the leak and realize
something cannot be fixed.”
Jones also discussed the hospital’s utilization of a
voluntary leave program for employees.
“In the process of aligning our budget, the hospital came up
with a voluntary leave incentive program and six employees took the
opportunity. They voluntarily resigned, and we didn’t have to do layoffs,” she
said.
Despite the fact that Blue Hill Hospital was forced to make
a lot of difficult decisions in order to get their budget back on track, Jones
said the hospital looked at ways in which their decisions could serve as
positive opportunities for them.
“It was an opportunity for us to replace low performers and
begin a reutilization of space. Our labor and delivery area become an oncology
unit,” she said. “Executive management was able to focus on new services and
ensure their mission is sustainable into the future.”
Source: healthcarefinancenews
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