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May 4, 1999

The Medical Center is moving forward with a number of cost-control initiatives that are outlined later in this newsletter. While we must continue to reduce costs due to the Balanced Budget Act and the competitive health care environment, we are committed to continuing to provide the highest quality of care. The authority bill remains under consideration. (The purpose of the bill is to provide flexibility for the management and operation of the Medical Center. Our hospitals and clinics would be exempt from state laws governing procurement, capital improvement and personnel regulations.) We hope the General Assembly will pass the bill by the end of the legislative session in early June. The Me Issues Committee recently met and received information such as the KPMG consulting firm’s report and the Medical Center’s strategic plan. The Me Issues Committee decided that if the authority bill passes, then we will solicit questions and ideas from employees. We will communicate the bill’s status as we move forward. This week is National Hospital Week. This is a time to reflect on our patient care, teaching and research mission, and to celebrate our accomplishments. Every month, I receive dozens of letters from patients and families applauding the outstanding care and service given at MUSC. We will run ads in The Post and Courier and The Catalyst honoring your daily efforts in providing excellence in care and service. Thank you for a job well done.

W. Stuart Smith,

Vice President for Clinical Operations and Executive Director, MUSC Medical Center

Budget Update

• Lisa Montgomery, administrator of Financial Services, said the Medical Center needs to cut an additional $8 million from the proposed 1999-2000 budget in order to present a balanced budget to the board of trustees on June 18.
• In recent years, the Medical Center has made progress in reducing personnel-related costs. We need to continue our efforts to improve performance and productivity. A commonly used benchmark in the hospital industry is full-time equivalent (FTE) positions per adjusted occupied bed, which takes into consideration both inpatient and outpatient activity. Before change management in 1994, we had 8.7 FTE employees per adjusted occupied bed. By 1996, we reduced that number to 6.4 FTEs. During this past year, we gradually increased to 6.55 FTEs per adjusted occupied bed.
• An Association of Academic Medical Centers' report indicates the most cost-effective academic medical centers average 5.5 to 6.5 FTEs per adjusted occupied bed. Our administrative team recently adopted a goal of 6.0 FTEs per adjusted occupied bed for next year. With continued performance and productivity improvement, we hope to meet this goal.
• Apparently, we have greater cost-control opportunities in areas aside from personnel. Approximately 49 percent of our budget consists of personnel-related costs, while hospitals often devote 60 percent or more to personnel budgets. This suggests we may have fertile ground for cost-control opportunities in other areas, and we should turn every stone.
• Montgomery gave an overview of fiscal year 2000 financial strategies to increase revenue and cut expenses. Revenue-boosting strategies include reviewing and increasing rates, capturing more outpatient charges, negotiating higher rates with managed care companies, and increasing the use of Rutledge Tower services. Strategies to cut expenses include tightening the hiring process, standardizing and managing equipment, auditing work orders and, on a more long-term basis, passing the authority bill.

Announcements

Award

• Marilyn Schaffner, clinical director of the Digestive Disease Center, Medicine and Oncology, announced that Irene Thomas, R.N., MSN, nurse manager for DDC 10 West, and James Anderson, R.N., CNII on DDC 10 West, won third-place in an OASIS poster presentation.

Compliance Training

• Managers need to return completed compliance training rosters to the Compliance Office by May 15. Commencement 1999 Broadcast

• In order to give more people the opportunity to see the last graduation ceremony Dr. Edwards will preside over, and to hear the remarks of the guest speaker, Bill Cosby, Commencement 1999 will be broadcast in its entirety over the Health Care Network. The ceremony begins Friday, May 21, at 9 a.m. and is expected to conclude at approximately 11:30 a.m. MUSC staff and patients can view the ceremony on channels 23 and 24. We encourage you to tune in and avoid the congestion in the horseshoe area. The ceremony also will be transmitted via closed-circuit TV to Baruch Auditorium.

Y2K Message

• Be prepared—there are approximately 240 days left before the year 2000.