Put me in Coach Creating the Finance and Operations Dream Team

Presented by David Wildebrandt

Baptist Leadership Group, MMIX. All rights reserved.

Lets Relate
Not Compare

Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

s i m e l b o r p Our t s u j no t

Baptist Leadership Group, MMIX. All rights reserved.

ACHE Top CEO Concerns

2009 ! ! ! ! ! ! ! ! ! ! ! ! ! ! Financial challenges Patient safety and quality Care for the uninsured Physician-hospital relations Personnel shortages Governmental mandates Patient satisfaction Capacity Technology Issues about not-for-profit status Malpractice insurance Disaster preparedness Patient safety Quality 77% 43% 41% 32% 30% 26% 22% 16% 9% 2% 2% 1% NA NA 2008 70% NA 38% 35% 30% 22% 17% 11% 8% 4% 2% 1% 29% 33% 2007 72% NA 37% 40% 30% 23% 16% 11% 8% 3% 3% 1% 27% 29%

Baptist Leadership Group, MMIX. All rights reserved.

Nor is our issue just the loss of funding

Baptist Leadership Group, MMIX. All rights reserved.

Healthcare is not what it used to be

! ! ! ! ! ! ! ! ! HCAHPS VBP Accountable Care Reform Meaningful use Social Media Hospital Compare Recession There is an App for that
Baptist Leadership Group, MMIX. All rights reserved.

Challenged?

Baptist Leadership Group, MMIX. All rights reserved.

Top 10 Financial Challenges

! ! ! ! ! ! ! ! ! ! Reimbursement Bad debt/Charity care Access to capital Collection of co-pay Labor Rates Supply cost Volume Productivity Marketing cost Contract labor
Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

How can operations and finance join forces?

Baptist Leadership Group, MMIX. All rights reserved.

The Answer is You!

We are a team of passionate employees

Baptist Leadership Group, MMIX. All rights reserved.

What Do Employees Want from their Jobs?

Good wages Job security Promotion/Growth Opportunity Good Working Conditions Interesting Work Personal Loyalty Tactful Discipline Full Appreciation for Work Done Sympathetic to Personal Problems Feeling in on things Managers 1 2 3 4 5 6 7 8 9 10

Baptist Leadership Group, MMIX. All rights reserved.

What Do Employees Want from their Jobs?

Good wages Job security Promotion/Growth Opportunity Good Working Conditions Interesting Work Personal Loyalty Tactful Discipline Full Appreciation for Work Done Sympathetic to Personal Problems Feeling in on things Managers Employees 1 5 2 4 3 7 4 9 5 6 6 8 7 10 8 1 9 3 10 2

Baptist Leadership Group, MMIX. All rights reserved.

Create Clarity of Vision

Baptist Leadership Group, MMIX. All rights reserved.

If you dont know where youre going, you might end up someplace else.
Baptist Leadership Group, MMIX. All rights reserved.

Which way do you go?

Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

Our challenge is!

Baptist Leadership Group, MMIX. All rights reserved.

Margin Improvement Teams

! BHCs innovation to empower our people to impact results ! Established in 2010 with the objective to empower the entire workforce to achieve financial results

Baptist Leadership Group, MMIX. All rights reserved.

Margin Improvement Teams

! ! ! ! ! Senior Management Involvement Not a Project or Initiative Team Composition is Critical Bonus Potential for Team Leaders 3:1 Rule

Baptist Leadership Group, MMIX. All rights reserved.

Margin Retention/Improvement 2010/2011

Steering Committee
Chair-

Supply Chain
Value Analysis Team

Value Analysis Teams (CQVAT)

Clinical Quality

Facilities & Support Services

Value Analysis Teams

Labor & Benefits

Value Analysis Team

Streamline the Business

Value Analysis Team

Improved Net Revenue Per Unit Team

Incremental Volume Team

Bi-Weekly meetings with one VAT reporting results to Steering Committee each meeting.
Baptist Leadership Group, MMIX. All rights reserved.

Clinical Quality
CQVAT Chair Exec. Sponsor

Cardiovascular
Leader Exec. Sponsor

Leader Exec. Sponsor

Laboratory

Peri-operative
Leader Exec. Sponsor

Pharmacy
Leader Exec. Sponsor l

Patient Care Services

Leader Exec. Sponsor

Imaging & Radiation

Exec. Sponsor

Baptist Leadership Group, MMIX. All rights reserved.

Peri-operative

Target $1,797,678 Implemented $2,053,748

Example Outcomes

Ortho Implants $876,401 Reprocessing $266,888 Neuro Implants $125,895 Endomechanicals $632,216

Baptist Leadership Group, MMIX. All rights reserved.

Streamline the Business VAT Chair Exec. Sponsors

Non Core Business Financial and Community Benefit Assessments

Core Business Improvements

Baptist Leadership Group, MMIX. All rights reserved.

Streamline the Business

Target $663,568 Implemented $500,000
!Performed systematic review of 32 non-core entities & services using specific criteria !Financial !Strategic !Mission/Community Benefit !Baptist Brand !Political Issues !Risk Factors !Management Resources
Baptist Leadership Group, MMIX. All rights reserved.

Streamline the Business

Ranking Process: !Entity/Service rankings placed them in 3 categories !Low Range ! strongly consider divesture or repositioning !Mid Range ! further review and/or action plan required !High Range ! keep/maintain/grow

Baptist Leadership Group, MMIX. All rights reserved.

Facilities and Support Services Value Analysis Teams Chair Executive Sponsor

Information Services Leader Exec. Sponsor

Environment of Care Facilities Leader Exec. Sponsor

Purchase Services & Prof Fees Leader Exec. Sponsors

Baptist Leadership Group, MMIX. All rights reserved.

Purchased Service & Professional Fees

Target $1,500,700 Implemented $1,143,692

Example Outcomes

Patient Satisfaction survey savings $17,928 Renegotiated maintenance contracts $99,159 Anesthesia Subsidy Reduction $1,000,000

Baptist Leadership Group, MMIX. All rights reserved.

Improved Net Revenue Per Unit

Chair Andy Terry Exec. Sponsor Kerry Vermillion

Point of Service Collections

Chair : Exec. Sponsor____

Process Improvement
Chair: Exec. Sponsor:

Managed Care Payment Compliance

Chair: Exec. Sponsor

Scheduling and Registration Workflow

Chair: Exec. Sponsor

Reimbursement
Team Chair:

Charge Capture / Pricing Team

Chair: Exec. Sponsor____

Exec. Sponsor:

Baptist Leadership Group, MMIX. All rights reserved.

Revenue Cycle

Target $10,548,000 Implemented $14,865,179

Example Outcomes

Strategic pricing impact $2,959,198 Charge Capture Process $1,179,380 Clinical Documentation $3,198,469 Internal Payment Compliance $988,000

Baptist Leadership Group, MMIX. All rights reserved.

Incremental Volume Growth Team Exec. Sponsors

Target

$8,455,450

Implemented $12,621,844
Example Outcomes

Cardiology Consultants $4,631,323 ED Admissions $1,535,255 Total Joint Program $892,010

Baptist Leadership Group, MMIX. All rights reserved.

Margin Retention/Improvement Initiatives - 2011 Steering Committee Summary Report Steering Committees: CQVAT FFSVAT LBVAT SSCVAT SLB NRPU V Total Clinical Quality Value Analysis Facility & Support Services Value Analysis Labor & Benefits Value Analysis Supply Chain Value Analysis Streamline the Business Value Analysis Revenue Cycle Incremental Volume (1) Target 4,122,064 1,600,700 250,000 914,187 663,568 10,548,000 8,455,450 26,553,969 664,187 113,568 8,248,000 6,205,450 19,853,969 In budget 3,122,064 1,500,700 Stretch target 1,000,000 100,000 250,000 250,000 550,000 2,300,000 2,250,000 6,700,000 Identified 4,536,412 1,770,896 24,000 1,014,129 922,751 18,390,983 9,187,180 35,846,352 134.99% (2) Implemented 3,553,351 605,487 24,000 1,010,654 500,000 15,593,693 14,516,346 35,803,532 134.83% Validated 4,074,550 336,011 24,000 1,075,371 500,000 14,865,179 12,621,844 33,496,954 126.15%

Percent to target

Baptist Leadership Group, MMIX. All rights reserved.

Vision without execution is a hallucination.

Albert Einstein
Baptist Leadership Group, MMIX. All rights reserved.

Baptist Hospital Net Income FYTD 2011

$20,000,000
$19,452,592

$15,000,000

$13,809,826

$10,000,000
$6,155,106

$5,000,000

$Actual
Baptist Leadership Group, MMIX. All rights reserved.

Budget

Prior Year

Free T-Shirt Giveaway!!!

Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

All Finance cares about is __________?

Baptist Leadership Group, MMIX. All rights reserved.

How can we leverage culture to execute strategies?

Baptist Leadership Group, MMIX. All rights reserved.

Total Performance Score

Process of Care
70%

30%

Patient Experience of Care

Baptist Leadership Group, MMIX. All rights reserved.

A Zero Sum Game

VBP is Budget Neutral

Baptist Leadership Group, MMIX. All rights reserved.

2011 Results for Value Based Purchasing

! Baptist is planning to receive 150% of VBP dollars based on HCAHPS Results

Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

Operating Margin
2.40% 2.00%

1.10%

Actual

Budget

Prior

Baptist Leadership Group, MMIX. All rights reserved.

Medicaid Reductions = $7.0 Million ns o i t c u d e R e n r o a i l c l i i Med $0.5 M =

47%

of o wip ur inc ed a ome way

Baptist Leadership Group, MMIX. All rights reserved.

$40,000 $800

Baptist Leadership Group, MMIX. All rights reserved.

$40,000 $28,000

Baptist Leadership Group, MMIX. All rights reserved.

Owners or Renters?

Baptist Leadership Group, MMIX. All rights reserved.

Can you tell the difference?

Baptist Leadership Group, MMIX. All rights reserved.

"If you want 1 year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people." Chinese proverb

Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

 Baptist Leadership Group, MMIX. All rights reserved.

Perseverance! Even the Pros Mess Up

Baptist Leadership Group, MMIX. All rights reserved.

How do we stay connected to the patient?

Baptist Leadership Group, MMIX. All rights reserved.