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Currents Jan. 11

To Medical Center Employees:
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 13.

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 ( or 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

Tuesday, Jan. 11, 2011

The Catalyst Online is published weekly by the MUSC Office of Public Relations for the faculty, employees and students of the Medical University of South Carolina. The Catalyst Online editor, Kim Draughn, can be reached at 792-4107 or by email, Editorial copy can be submitted to The Catalyst Online and to The Catalyst in print by fax, 792-6723, or by email to To place an ad in The Catalyst hardcopy, call Island Publications at 849-1778, ext. 201.