HSM 541 Week 6 You-decide Assignment: Enhancing Middlefield Hospital’s Financial Performance (GRADED A)

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Week 6- You Decide Middlefield Hospital HSM 541 Background & Problems Analysis Middlefield Hospital has been undergoing financial... problem for the past 6 months, in which the hospital is having trouble meeting its budget. One of the contributing factors of this issue is the new hospital in the community. With this new hospital in the area, Middlefield is experiencing decline in its patients’ admissions as well as getting more uninsured or under insured patients. Also, the majority of Middlefield’s managed contract are over two years old with lack of data management and absence of ongoing communication with their respective managed care companies. Besides the employees’ health care coverage is getting more expensive, the neonatal intensive care unit and mental health units are also generating losses. Additionally, the new hospital has been offering a wellness center which attracts young families in the community. Recommendations As a CEO of Middlefield Hospital, I am proposing several recommendations to improve our financial performance and to enhance our competitiveness with the new hospital. First, I would recommend cutting costs in employee health care coverage. The cost of healthcare coverage has been increasing significantly, and it is one of our major operational costs. We will need to shift more costs and responsibilities to employees on our healthcare benefit coverage. Shifting our healthcare benefit cost will be done through raising the deductibles and co-payments for medical services, having employees paid higher premiums, and reducing coverage on prescription drugs (for ex: having employees paid for the difference between generic and brand prices). Nevertheless, we still need to balance these changes by keeping the healthcare coverage affordable and applying a reasonable increase of the cost to our employees. Furthermore, we should establish a wellness program designed to improve employees' health and thereby reducing healthcare costs over the years. According to an article from Society for Human Resources (SHRM, 2017), about 70 percent of health care spending are related to behavioral and lifestyle choices. Numerous studies have indicated that implementing wellness programs can help reducing health care costs in the long run (SHRM, 2017). Therefore, having a wellness program will be beneficial for our employees’ health as well as saving costs for our hospital in return. Next, Middlefield needs to advertise on mental health units as the only inpatient facility available in the community to attract more patients into the hospital. This is something that potentially a lot of people in the surrounded area may not be aware of or perhaps just need to be reminded of about this available service. I believe the advertising , such as through mailing brochures to the community, can help Middlefield to get some more patients, in which the new hospital are unable to reach because they don’t have these services or staff available at their facility. Therefore, the mental health department can be a place that our hospital should look closer for potential revenue improvement, since we do not have to compete with the new hospital. Furthermore, we could have Dr. McCrae to reach out to other clinics and hospitals in the area and provide them with information about this department at Middlefield for any of their existing patients potentially need the service or for future patients referrals. Dr. McCrae can also connect with the community by providing educational seminar, such as mental health screening, to raise awareness and provide more exposure to the community of this department at Middlefield. We should also setup some meetings with Barbara and spend some time to better develop Middlefield’s quality improvement program by doing more than data collection and reporting. We need to take the data results and actually using them to make improvements around the hospital to be able attract some of our lost patients back, bringing in new patients, as well as increasing patients’ retention rates. In addition to that, we need to start conducting patient satisfaction survey as a balanced measure to develop quality improvement initiatives According to NRC Health (2016), a positive patient experience is very important to drive loyalty, encouraging them to choose an organization again for future healthcare needs. With using the data provided by quality improvement program -pulled from various system (clinical, financial, and operational) and integrating it with the patient satisfaction data, it will aid us to better develop our quality improvement initiatives. Birkmore and Merkley (n.d.) mentioned this method has been implemented by Texas Children Hospital (TCH), in which they could accurately analyze how the quality improvement strategies in place are affecting patient satisfaction, for example, “TCH can analyze how exam wait times impact patient satisfaction.” At Middlefield, we could apply this strategy to analyze the current loss of revenue at Neonatal Intensive Unit Care (NICU), and see if there are any correlations between the quality of care and the patient satisfaction rating. If so, we could then establish a more effective strategic planning on quality improvement based on the contributing factors determined from data analysis, including patient satisfaction survey. On top of the quality improvement initiatives, we also need to form a new managed care team to monitor managed care contracts and better evaluate our utilization and reimbursement trends. Barbara and her team should also be involved with the new managed care team to provide reliable utilization and reimbursement data to aid the managed care team maintaining an effective communication with managed care companies. With the improvement of quality of care program and focused managed care coordination, it should aid our hospital to enhance our reimbursement rates and boost our revenues. Furthermore, Middlefield needs to open a wellness center where patients and their families can get preventative and wellness services performed. We can also look into integrating our wellness center with our employee wellness program to further generate savings. Our wellness center can provide a range of services, such as exercise program, health screenings, and monitoring patients' wellbeing over time. Research has shown that preventive services can save lives and improve health by identifying illnesses earlier, managing them more effectively, and treating them before they develop into more complicated, weakening conditions, and they can also be cost-effective to both patients and health providers (Ullman, 2015). In a financial perspective, this could also be a great way of expanding Middlefields’ revenue and increasing the hospital’s overall reimbursement rates as we further improve of our quality of care through health promotion and disease prevention. Also, studies by the Medical Fitness Association show wellness center construction offers returns on investment between 6 and 10 percent with contribution margins around 30 percent (Ullman, 2015). In addition, healthier patients can help keeping costs down over the years, as every additional hospital bed requires an investment of more than $1 million, according to Benjamin Spense, CFO of Lee Memorial Health Hospital (Ullman, 2015). If we can lower the total demand for beds in a long-term, we can greatly decrease the capital expenditure needs of our hospital besides improving quality of health care for both our patients and employees. On top of that, Middlefield would also then be able to become a better competitor to the newer hospital to attract patients returning back to Middlefield as well as bringing in new patients such as young families and more insured patients into the hospital. Conclusions I am very confident that implementing the above recommendations will tremendously help Middlefield Hospital improving financial performance and keeping our competitive edge in the community. We should be able to see significant reduction in the operational cost through increased employee cost sharing of our healthcare benefit coverage. Having a wellness program will also help our organization to reduce our employee healthcare cost in the long run through the increased in employees’ healthy lifestyles and behaviors. Other recommendations on better exposure of our mental health program, improved quality of care through enhanced data utilization and patient satisfaction survey, as well as establishing a wellness center will also be beneficial to increase overall reimbursement rates and net income. References Bickmore, A.M., & Merkley, K. (n.d.). The Top Five Recommendations for Improving the Patient Experience. Retrieved from https://www.healthcatalyst.com/Patient-Satisfaction-And-Outcomes- Five-Recommendations NRC Health (2016, March 29). Competition and Consumerism in Healthcare: What Makes Consumers Change Healthcare. Retrieved from https://nrchealth.com/what-makes-consumers-change- healthcare/ Society for Human Resource Management (2017, Jan. 11). Managing Health Care Costs. Retrieved from https://www.shrm.org/resourcesandtools/tools-and samples/toolkits/pages/managinghealthcarecosts.aspx Ullman, Kurt (2015, Aug. 17). Wellness Centers, No Longer Hospital Gimmicks, Become Money-Making Population Health Engines. Retrieved from http://www.healthcarefinancenews.com/news/wellness-centers-no-longer-hospital-gimmicks- become-money-making-population-health-engines [Show More]

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