December 10, 1998

At our Dec. 8 communications meeting, Lisa Montgomery, Administrator of Financial Services, updated the management team on our current financial status and outlined measures, as indicated below, being taken to improve our budgetary situation. All Medical Center employees need to be attuned to our budgetary situation and lend support to the measures being taken to improve our financial performance.

As communicated in previous Currents, over the past several years we enjoyed a strong financial performance as a result of change management-related cost reductions, sustained Medicare reimbursement and relatively low managed care penetration in our market. In 1994 we predicted that our budgetary situation would erode within a few short years due to market forces and decreased government reimbursement. Our prediction in 1994 was accurate, but a year or two off schedule. We are now faced with a much more difficult financial situation. In the short run our management skills will be challenged and in the long run our updated strategic plan will be tested.

W. Stuart Smith, Interim Vice President for Clinical Operations Interim CEO, MUSC Medical Center

Cash Position - Past, Present, Future

• Lisa Montgomery, administrator for Financial Services, MUSC Medical Center, presented an overview of the present cash position of the MUSC Medical Center, how the situation got to this point, and what’s being done about it.
• In 1993 the Medical Center had little cash. After completing the change management process which began in 1994 and during the proposed pre-affiliation process, the Medical Center’s cash position became and remained strong largely due to the following:
• The Medical Center was in a “holding pattern” awaiting resolution of the proposed affiliation
• expenses were lower for FYs 1995-97
• the hiring pace was down
• capital equipment purchases were limited
• we committed to fewer capital renovation projects
• During the FY 1995-97 period, the Medical Center was able to transfer a substantial amount of funds, approximately $120 million, to the University to support MUSC’s overall mission. However, during FY 1998 a number of needs and issues were addressed which led to an increase of $40 million in expenses including:
• additional 200 FTE’s to address increased staffing needs
• increase in capital equipment purchases
• funding of numerous capital projects
• preparation for Rutledge Tower
• During this same period the 1997 Balanced Budget Act resulted in a reduction of approximately $4.7 million in Medicare funds in 1998, with an additional reduction of around $6.8 million expected for 1999.
• Montgomery explained that the Medical Center ended FY 1998 with a $3 million cash balance.
• As of the end of October 1998, the Medical Center had a negative balance of $2 million...it was estimated that if left unchecked this would result in a $20 million budget deficit for FY 1999, hence a number of measures are being taken to improve the Medical Center’s cash position including:
• Implementation of a prioritizing process for equipment purchases with guidance being provided by the Clinical Council. We plan to use financing for some purchases to avoid large cash outlays.
• The Technology Assessment Committee will continue to evaluate purchase requests, but will be asked to make recommendations based upon the actual dollars available for funding.
• Currently the Medical Center expends more than $10 million in shared services and this will be carefully reviewed for possible cost savings.
• Collection efforts will be increased with the goal of reducing accounts receivable by $10 million.
• The new hire process requires more justification. q Management will be given improved access to information for decision making and budgetary control with implementation of Trendstar beginning in early calendar year 1999.
• Increased emphasis has been and will continue to be placed on using benchmarking data. We expect to begin receiving the first HBSI reports in early calendar year 1999.

“Buddy” Bonus

• Susan Carullo, manager, Employment, Compensation and Employee Relations of the Medical Center Human Resources Office, announced a new referral bonus program that rewards current employees who successfully recruit experienced registered nurses into permanent positions (working a minimum of 24 hours per week) within the Medical Center. “Experience” is defined as having a minimum of one year of registered nursing experience and as being qualified for a Clinical Nurse II position.
• A key goal of the Buddy Bonus plan is to reduce recruitment and advertising costs and to help with elimination of costly travel RN’s by offering employees an incentive.
• According to the new policy, current employees of the university or Medical Center, in permanent or temporary positions, are eligible to receive compensation for the successful referral of experienced RN applicants. A $250 bonus (lump sum subject to taxes) will be given when the newly hired registered nurse completes three months of permanent service with an additional $250 bonus when the newly hired registered nurse completes one year of permanent service. (Administrators, directors, managers and Human Resources staff are not eligible.)
• To be eligible, the applicant RN must indicate on the original job application the name of the employee who made the referral. The Nurse Recruiter will maintain records of the eligible employees who have referred registered nurses who are hired. (Applications of individuals employed with MUSC within the previous six months are ineligible for consideration.) Payment of the bonus will be made by the home department of the hired RN.
• Copies of the policy are available in the Medical Center Human Resource Office, 109 Children’s Hospital or by calling 792-0819.

Information Technology Update

• Dave Northrup, director, Healthcare Computing Services, presented an information technology update on Emerald (electronic medical record system), ClinLAN95 and CCIT service benchmarks.
• Emerald:
• Order entry testing is being done on 10 West with initial lab and radiology testing conducted where actual patient orders are entered in to the test system. Dietary and follow up radiology testing is also in progress.
• Technical interfaces are being refined and lab label training is being conducted for 10 West. Northrup said it is expected 10 West will “go live” in January and will be followed soon after by 7C (Children’s Hospital) and 4N IOP. Physician ordering on 10 West needs printing capability. The rollout to other units is presently on hold pending funding for PC’s.
• Pharmacy will be the order entry beta site (date to still be determined).
• Plans are underway for the replacement of StatLAN. Northrup said they need to implement census management (transfers and discharges) in Oacis.
• A pilot project for document imaging will begin in April, 1999, in the Hollings Cancer Center and 8 West (more details will given at a later date).
• ClinLAN95:
• The rollout of ClinLAN 95 is underway with approximately 800 converted to date (600 of which are in Rutledge Tower). There are approximately 2000 remaining, including 250 in the College of Medicine. The completion date is targeted for Sept. 30, 1999. Northrup reminded everyone ClinLAN 95 is required for year 2000 compliance.
• A prioritization committee is developing a schedule for the ClinLAN 95 rollout based on the following priorities:
• order entry
• areas that require Win95 application
• problematic CL server
• other EMR initiatives
• strategic implementations
• areas moving to new location
• physically contained areas (e.g., 17 Ehrhardt)
• Greg Felzer has been named the project manager for the ClinLAN 95 rollout.
• Northrup outlined the following prerequisites to receiving ClinLAN 95:
• PC must be Dell P133 or above
• minimum capable printer: HP Laserjet 4 (no IBM laser printers or dot matrix printers)
• category 5 wiring connected to new network
• training (2-5 hours depending on proficiency)
• e-mail and data to be converted (must be arranged through CCIT)
• Northrup stated the greatest need at present is obtaining blueprints showing the location of offices and PC’s.
• Northrup explained that they have been able to obtain central funding for this time only to lease replacement PC’s for those which are non-compliant for ClinLAN 95. CCIT has obtained a two year lease with no buy out at the end of the lease--meaning the units must be returned. Therefore, inventory tracking is critical. At the end of the lease, a choice must be made to either purchase a new PC or lease another one. More details will be given as the conversion is completed.
• Information Technology Goals/Benchmarks:
• Northrup briefly outlined the following goals for the Medical Center information technology services:
• Unscheduled downtime goal of no more than 16 hours of unscheduled downtime in one calendar year for each system/server.
• Workstation support: installation of new workstation within one week of arrival; moves accomplished on-time with at least two weeks notice; high priority problems addressed within 24 hours; and less than 200 outstanding calls and tasks on the books at any time.
• Northrup stated they also plan to keep up the current application software releases within three months of receipt.
• If anyone has any questions or needs further information about any of the above plans and systems, contact the CCIT Help Desk at 792-9700.