SoutheastHEALTH proceeds with efficiency plans

SoutheastHEALTH's executives say "financial improvement" and "operational refinement" are the goals of an initiative underway that recently has produced changes in leadership and will identify efficiencies needed to help its health-care organizations face a challenging time.

The initiative, known as APEX, "is causing some pain at the hospital, but it has to happen." said John Thompson, chairman of the SoutheastHEALTH system board of directors.

If SoutheastHEALTH can make certain changes in the six key areas of the initiative, including clinical documentation improvement, human resources, labor, nonlabor, physician solutions and revenue cycle, a potential for $32 million in annual savings may come the health system's way, said John Skeans, interim CEO.

Skeans was hired as chief financial officer in August, a few weeks before SoutheastHEALTH began the initiative with the help of the consulting group Huron Healthcare. Another $9.5 million could be paid to SoutheastHEALTH through backlogged billing.

The need for change at SoutheastHEALTH is being triggered by financial decline for the organization. The system this year received a downgrade in its bond rating. The agency that made the downgrade said it "reflects significant and unexpected operating losses in 2013, which resulted primarily from billing and revenue cycle issues" and has faced other common financial challenges for health-care providers, such as cuts in reimbursements and other funding.

John Skeans

"Back here, in the old model, we got paid for doing things," Thompson said. "In the future, that's not how a hospital will be paid. Unfortunately, we are sitting in a spot in the middle, because that model hasn't been explained to us yet."

An assessment of the health-care system in the spring set SoutheastHEALTH on its current path, which has employee "work teams" assessing areas throughout the organization, searching for opportunities for efficiency. The initiative is expected to last 12 months. The teams, according to Skeans, are examining all aspects of the organization, looking at everything from costs of vendors to labor to billing inefficiencies.

Not for sale

Though there is financial strain in the organization, executives are quick to try to dispel rumors in the community that SoutheastHEALTH may be for sale.

"There is no ongoing, active or hint of discussion with another health-care system about a sale," Thompson said.

Changes for employees

This year, five key members of SoutheastHEALTH's senior management have left their positions for retirement or other reasons.

Included were Wayne Smith, CEO, who announced in August his intent to retire by the end of 2014, but instead left in October for health reasons; CFO Hugh King and Dr. Dennis Means, vice president and chief medical officer, who simultaneously announced plans to leave in April; chief operating officer Sly Moore, who announced her retirement last week; and Jim Limbaugh, executive vice president of planning and business development, who recently left SoutheastHEALTH under circumstances that remain undisclosed because of the organization's privacy rules.

The changes reflect what Thompson said is expected to happen with the initiative at more levels of the organization -- employees who have left or who plan to leave or retire may not be replaced.

"There will be fewer people involved by June, hopefully as many [lessened] by attrition," he said.

SoutheastHEALTH is searching for a new CEO and, with the help of an executive search firm, has narrowed the field to three potential candidates.

All of the candidates are fully aware of the health system's financial position, Thompson said, and claim to like what they see of the initiative and how the organization has begun making improvements, as well as an engaged board of directors.

Though employment changes are expected, executives say there is more to the initiative.

"All of this will not be on the back and burden of employees, in terms of that's the only piece of this," Thompson said.

Whether the positions of chief operating officer and vice president of planning and business development will be filled, that is up to the next CEO.

For patients

Skeans estimated about one-third of the efficiencies identified so far were within billing processes, which already have been improved in the areas of workflow and technology. He also said backlogged bills that resulted from prior inefficiencies still will go out to patients.

Shauna Hoffman, SoutheastHEALTH's marketing director, said the initiative is not in any way expected to detrimentally affect care for patients.

"The only thing that's different is that the way we deliver care is being forced to change," she said. "What that means is we take a closer look at best practices, and continue those."

Quality of care, along with keeping down associated costs, are focuses for the organization going forward, according to executives. They pointed out several bright spots for SoutheastHEALTH, including that patient satisfaction surveys show overall high marks. A hospital customer satisfaction survey report for the Centers for Medicare and Medicaid Services that looked at six regional health-care providers from October 2012 to September 2013 gave SoutheastHEALTH the top score in eight of 11 categories.

The organization also received a positive overall score, resulting in higher fiscal-year 2015 payments, for its participation in the Hospital Value-Based Purchasing program, a Centers for Medicare and Medicaid Services initiative that rewards acute-care hospitals with incentives based on the quality of care they provide to Medicare patients.

"We have never lost sight of what is the most important," Thompson said. "The quality and outcomes here are still very high, and we are continuing to provide quality care."

Thompson said the organization has a "very committed workforce" and that he constantly receives reports of extraordinary care at SoutheastHEALTH.

"It is heartwarming to constantly hear about the impact this hospital is having," he said.

eragan@semissourian.com

388-3632

Pertinent address:

1701 Lacey St., Cape Girardeau, MO