At the Jan. 11 communications meeting I updated the management team on
the driving forces behind our cost savings initiatives which we refer
to as our “5/5 plan,” as mentioned in previous Currents newsletters.
This means we are drilling down on all costs of providing care, while
improving quality, with the goal of reducing costs 5 percent this
fiscal and 5 percent next fiscal year.
My intent is to convey a sense of urgency to everyone. You have
probably read in the newspaper about our state’s financial crises and,
in particular, the Medicaid funding dilemma. This fiscal year (ending
June 30, 2011) the state faces a $230 million shortfall and for next
fiscal year a $663 million shortfall. The medical center’s operating
budget of approximately $1 billion includes about $200 million in
Medicaid funding amounting to around 20 percent of our budget. At this
time, the state has not identified funding for the final quarter of
this year. The MUSC leadership team is working with legislative
leaders, state government officials, South Carolina Hospital
Association and others to formulate recommendations on how to address
this dilemma. In the best case scenario, we will have to tighten our
belts and reduce the cost of care.
Also, I mentioned to the management team that health care reform on the
national level will likely adversely effect our reimbursement levels in
the future. One possible scenario is insurers could move toward
Medicare rates. This scenario would require us to reduce our costs by
11 percent to maintain our current margin.
During the past several months, service line administrators, physician
leaders and other members of the management team have been working
diligently to craft specific action plans, utilizing our IMPROVE
performance improvement model, to target opportunities for cost
savings. Administrative support departments are also being asked to
craft similar plans. Routine progress reports are being presented
weekly by service line leaders. The cost reduction action plans are
being shared with all members of the management team.
At the conclusion of our Jan. 11 management team meeting I shared key
points on how the management team and their respective departments can
help as follows: focus on improving quality of care (which reduces
costs); focus on methodical implementation and success of the 5/5
plans; focus on eliminating overtime (overtime costs continue to be
excessive); put progress reports on the 5/5 plans as regular agenda
items for your meetings; and celebrate success.
On another matter, I want to thank everyone for your cooperation during
the recent winter storm. This underscored the fact that we need to
routinely ensure everyone is familiar with department-based plans and
relevant policies including the Medical Center Weather Emergency Plan
(policy A-64) and the Human Resources Weather and Emergencies policy
Also, the management team should ensure everyone is familiar with the
Medical Center Employee General/Emergency Information line (aka Green
Card) and how it is used to facilitate good communication during
hazardous weather conditions. Departmental representatives should be
prepared to update department-specific instructions if necessary. We
issue new cards each year and the updated (2010-2011) card needs to be
used. The card can be printed off the Medical Center Intranet (https://www.musc.edu/medcenter/disasterToolbox/source/MedicalCenterEmployees.pdf)
call Angela Ladson, Safety, Security, Volunteer and Information
Services, at 792-6902 to pick up a laminated Green Card.
Thank you very much.
W. Stuart Smith
Vice President for Clinical Operations
and Executive Director, MUSC Medical Center