August 13, 1998

At our Aug. 11 communications meeting, Mr. Steve Jones, executive assistant to the president, updated the management team on MUSC’s overall priorities. Mr. Jones mentioned that our institutionwide priorities fall into three central themes: our commitment to improvement and change, accountability, and planning. Mr. Jones’ comments are summarized below.

Ms. Lisa Montgomery, administrator for Financial Services, and I also spoke to the management team about our current budgetary situation and outlook. While the Medical Center has been very successful in recent years in reducing costs while providing the highest quality care, we have reached a crossroads at which we will be challenged to control costs. Through embracing the central themes (commitment to improvement and change, accountability, and planning) in the Medical Center budgetary process, I am confident that we will continue our successful operational performance.

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

Announcements

• The Joint Commission on Accreditation of Healthcare Organizations will be conducting a survey of special function and point-of-care lab testing Aug. 18 - 20. The surveyor will be visiting more than 15 areas in Medical University Hospital, Children’s Hospital, Storm Eye Institute, the Institute of Psychiatry, the Family Medicine Center and other locations on campus. While the survey focuses on lab testing done outside the laboratory, the surveyor will be aware of all areas and has the power to cite any breach of JCAHO standards. Everyone is asked to check their areas, making sure they are in compliance with standards such as life and fire safety, storage (18-inch clearance from the ceiling, 6-inch clearance off floor) and other standards we should be keeping in mind daily.

1998-1999 MUSC Priorities

• Steve Jones, executive assistant to the president, spoke to the management team on the priorities set for the university for the coming year. He said these items were determined after a close look at the goals and objectives of the many areas within MUSC. While the priorities are categorized in specific areas, all follow three themes:
• MUSC is a dynamic organization committed to making improvements and changing for the better;
• the public’s demand for accountability -- as a health care organization, public agency and educational institution—will be met at MUSC; and
• planning involves more people throughout the organization and is treated as a skill to be continually developed.
• Educational priorities include: continuing recruitment of a diverse student body and maintaining an optimal educational environment; obtaining reaccreditation; and continuing recruitment of a diverse and highly qualified faculty.
• Research priorities include: financial goals (obtaining $100 million in research funding from federal, corporate and private foundation sources); space goals (construction of the Research Building II and finding more lab space); and efficiency (using existing resources to their fullest potential).
• Patient care priorities include: moving ahead with the clinical enterprise strategic plan; successfully utilizing MUSC Rutledge Tower; maintaining high national rankings; optimally using Charleston Memorial Hospital; and continuing to develop appropriate care sites to ensure access for South Carolinians.
• Universitywide priorities include: continuing the implementation of the strategic plan of October 1997; encouraging a work place of choice where open communication, cultural diversity, compassion, honesty and accountability are celebrated; continuing to review and enhance information systems; finalizing the campus master plan; and recruiting for a vice president for development.

The Budget: Good News-Bad News

• Stuart Smith, interim vice president for clinical operations and CEO of MUSC Medical Center, gave the management team an update on the budget, saying he had good news and bad news. The good news is between fiscal year 1994 and fiscal year 1998, the Medical Center has experienced tremendous growth. A recent hospital census was the highest seen at the Medical Center in five years. Other numbers also reflect this growth.
• Patient days are up 1.77 percent. This increase seems small, but it must be looked at with our length of stay, which has decreased 22.75 percent, and our admissions, which have increased 31.74 percent. Taken together, these statistics mean we’re seeing a much greater number of patients in the hospital, and these people stay, on average, a shorter amount of time.
• Outpatient registrations are up 61.23 percent.
• Emergency/trauma visits are up 159.66 percent.
• Surgery procedures are up 29.49 percent.
• Using radiology procedures as an example of ancillary services, CT scans are up 60.96 percent, MRIs are up 88.03 percent and angiography is up 198.18 percent.
• Average FTEs (full-time equivalent employees) is down 12.61 percent.
• Average FTEs per adjusted acute bed are down 26.44 percent. (Our current number is equal to the University HealthSystem Consortium averages.)
• Average FTEs per adjusted admission are down 44.44 percent.
• Expense per admission is down 27.5 percent.
• Smith said that as an organization, we have succeeded beyond anything anyone could have predicted, but there is a less rosy trend developing. Our expenses per admission have decreased steadily since 1994 when change management had a dramatic effect on operations. However, in fiscal year 1998, the expenses increased.
• Smith said as Medical Center business increased in the last few years, expenses for such things as new services and equipment also increased. He cautioned that we must not allow our costs to increase faster than our growth and undo all the good done in the last few years.
• Lisa Montgomery, administrator for Financial Services, gave managers information on what they can expect from next year’s budget process. She outlined six steps in a new process designed to give managers the information they need to make good budget decisions.
• A Decision Support Unit is being established to assist with Trendstar, deliver more useful information to managers, streamline how information is collected and provide technical support. Rachel Herbert, director of Health Information Services, is leading the unit. Montgomery noted that the best way to control costs is through using information systems. This unit will help with that process.
• The prior year’s budget is being reviewed in meetings with departments this month and next.
• The evaluation and implementation of Trendstar has begun and will continue through December.
• Budget training and delivery is scheduled for January and February. Managers will be able to get help preparing budgets and benchmark data from UHC also will be available.
• Budget hearings are scheduled for March.
• Administrative review of proposed budgets is scheduled for April.
• Montgomery said the Medical Center should be prepared for revenue losses as a result of the Balanced Budget Act. Cuts in Medicare and Medicaid payments will amount to a $16 million decrease by 2000.

SmartStream Status Report

• At the Aug. 11 communications meeting, Howard Lundy, controller and assistant treasurer, gave the management team a status report on the SmartStream financial and reporting software package now in use at MUSC. Lundy said the package has been up and running for just over a year, and in that time his department has worked to resolve the glitches that come with any new program. He said he has heard from other institutions that have had similar problems smoothing out the program. Year 2000 compliance issues also have contributed to kinks in the system.
• The accounts payable, purchasing, general ledger, decision support and funds control functions of the software have been implemented, and the last software bugs in the funds control function are being worked out.
• Rollout of the system to user departments is under way with two online so far. A steering committee will be setting the plan for rollout to all departments. John Cooper, director of Finance, is the Medical Center representative on the steering committee.
• Another committee reviews reports and is developing modifications to the system as needed. Donna Johnson, manager of fiscal services in Finance, is the Medical Center representative of this committee, which reports to the steering committee.
• SmartStream training is available through the Department of Human Resources Management and also is scheduled for specific areas as they go online with the system.
• The SmartStream systems that will be up by 2000 are asset management, inventory and supplies, the credit card system and human resources management.