Cost of Care

Regional Hospital’s Focus on Rapid Results Reaps $6M in Savings

October 10, 2018 7:57 am

Henry Ford West Bloomfield Hospital leaders test at least two cost-saving ideas per month, leading to bottom-line impacts.

Leaders at Henry Ford West Bloomfield Hospital, a 191-bed facility in Bloomfield Township, Mich., have turned around the hospital’s financial performance by improving operations and reducing waste. From October 2014 through February 2017, leaders implemented $8.7 million in savings, $6 million of which has been confirmed in the hospital’s financial statements. The hospital, part of Detroit-based Henry Ford Health System, achieved a 4 percent operating margin in 2017 while holding the cost per discharge steady despite a reduction in discharges. Cost per case also declined.

Henry Ford West Bloomfield Achieves Financial Improvement

Leaders have been able to achieve these results without large-scale, corporate-led process improvement changes, says Lynn Torossian, president and CEO, who came to the hospital in 2014 when it had been open for five years and had a projected deficit of $7.5 million. Instead, Torossian and her team have focused on completing a high volume of small changes that generate an average savings of $10,000 to $15,000.

Hospital leaders work with an outside consultant to organize their efforts into 100-day productivity cycles with dedicated themes. During each cycle, leaders are expected to implement at least two changes per month.

By focusing on such initiatives, leaders can be innovative while maintaining the momentum for change. “We are able to make small changes today to see if they work. If they don’t, we can change our processes tomorrow,” Torossian says.

Focusing on Labor Productivity

Recognizing that corporate-led labor productivity initiatives can take a long time to implement, leaders at the regional hospital chose to focus on smaller scale initiatives they could manage on their own. One of their first cycles focused on understanding how much staff time was spent “in quality,” meaning doing their “true” jobs rather than work that did not add value.

During that cycle, leaders realized that historical staffing patterns could be revamped to make departments run more efficiently. In some cases, staff were cross-trained so they could support other departments as volumes shifted. For example, front-desk greeters were trained to serve as laboratory intake staff so they could fill in when needed.

Leaders also shifted the start times orthopedic unit and post-anesthesia care unit staff to better match patient volumes. “In health care, we have become very accustomed to certain start and stop times, but our work is not predictable by normal shift work,” Torossian says. “You have to find your own patterns in your departments and adjust your staffing to accommodate that.”

Torossian and her team also have developed strategies to help leaders react more quickly to labor variances in real time using analytic tools and pay period reports—which come out every two weeks—rather than waiting for monthly and quarterly financial reports. As part of a “rapid variance response” initiative, 82 department leaders receive a labor standard based on hours per unit of service and complete training on how to make up any hours that they may have overspent in their last payroll. “We don’t just want leaders to explain why they are overstaffed, but rather tell us how they are going to make it up,” she says.

For some departments, the answer may involve new staffing approaches. Leaders in interventional radiology had been relying on their in-house nursing agency to cover busy shifts and were consistently using too many staff. By using flexible start times and less costly contingent and overtime resources, leaders saved $96,000 in 2017.

Henry Ford West Bloomfield Reduces Labor Hours

Overall, working on rapid variance response has helped leaders become better business managers. “Our team has never felt as confident as they do right now in putting together a labor budget and managing to that labor budget,” she says.

That confidence was put to the test when a large water main break in the community shut down the hospital’s operating rooms and all but one unit for close to a week. Within 24 hours, leaders had to cut their census in half by transferring 20 patients to other facilities and expediting the discharge of 40 patients. Teams collaborated to keep staff updated on hourly census changes. By the fifth day, they had reduced their census to just eight patients. “It was like a ballet because we had to make sure that people were moving in the right direction,” Torossian says. During the crisis, 77 percent of departments maintained their budgeted labor productivity standards.

Improving Quality Incrementally

Beyond labor productivity, other cycles have focused on themes such as enhancing the patient experience and improving quality. During one quality-themed cycle, staff trained the transport team about catheter-associated urinary tract infections (CAUTIs) and implemented a process to help transporters double-check patients before they were moved. So, when transporters help pick up Foley catheter bags off the floor or gently place the bags onto the patient’s bed while moving them, that helps decrease the likelihood of a CAUTI. As part of this process, transporters learned to seek help from a nurse if a patient’s urine collection bag was too full.

“Before we did this, we didn’t necessarily think of the transporter’s role in preventing CAUTIs,” Torossian says. “But collaboration is really important—a lot of health care happens in the handoffs.” As a result, the hospital reduced CAUTIs from six cases in 2016 to one year-to-date in 2018.

Heeding Lessons Learned

Torossian offers advice on implementing and sustaining operational changes.

Get finance leaders involved early. “This process is very finance heavy, but it is also very strategic because it offers CFOs and other finance leaders the opportunity to create more strategic partnerships with operational leaders,” Torossian says.

At Henry Ford West Bloomfield Hospital, the finance team has developed Finance 101 and 102 courses to help department leaders become better stewards of their resources. “The more we can provide education, the more willing leaders are to be partners,” Torossian says. “We have found that even some of our most resistant leaders have embraced understanding their department’s financial picture. It’s up to finance leaders to help make that happen.”

Don’t delegate change management. CEOs and other C-suite leaders should champion change in their organizations, rather than delegating it to process improvement teams, Torossian says. “The status quo is where leaders should be uncomfortable while change should be where they are most comfortable,” she says. “The world is moving so quickly that if we don’t have a culture where people are comfortable trying new things and experimenting, an organization is going to have a hard time surviving.”

Recognize staff. Henry Ford West Bloomfield Hospital staff can earn recognition every 30 days at “check-in” meetings as well as awards at the completion of 100-day cycles.

Changing the Culture

Since the productivity cycles were started in October 2014, leaders at Henry Ford West Bloomfield Hospital have implemented more than 3,596 plans. Because the cycles happen at a rapid pace, leaders have begun to embrace experimentation and not fear failure because they know they can rapidly change their strategy without compromising months or even years of planning. They also have begun to think differently about their work, which Torossian believes is key to sustaining success.

This article is based in part on a March 2018 ACHE Congress presentation.

Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.

Interviewed for this article:

Lynn Torossian, is president and CEO, Henry Ford West Bloomfield Hospital, Bloomfield Township, Mich.


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