Here's a fantastic story about economic changes we as a company have certainly noticed at some of the St. Louis region's biggest hospitals, including Barnes-Jewish Hospital, MO Baptist Hospital, St. Mary's Hospital, and the entire SSM and BJC systems. It remains unclear whether the economic downturn is also affecting outpatient heathcare services such as the prosthetics and orthotics profession.
Economic downturn affects local hospitals, tooST. LOUIS POST-DISPATCH06/25/2008
 Mary Jo Feldstein [More columns] [Mary Jo Feldstein's biography] (P-D) |
SSM Healthcare-St. Louis announced another round of departures last week. This time, it was mostly top hospital managers. Since the system's new chief executive, Jim Sanger, came on board late last year, nearly 200 local SSM employees have lost their jobs.
Most losses have been part of a larger shift to make the SSM system more cohesive. Most decisions on human resources, finance and technology will be made at two regional offices or at corporate. Eventually, nursing protocols will be formed by a centralized committee.
For years, managers at hospitals within SSM and BJC HealthCare — the St. Louis area's largest health systems — have controlled most decision-making within their facilities. Goals and benchmarks were set at the corporate level. Achieving them was left to the hospitals.
In many ways, experts say, the changes at SSM make sense. A more efficient system that's better equipped to determine best practices and implement them should result.
When a hospital system has several similarly sized facilities near each other, there's little reason to duplicate back-office functions, health care consultants said. And, as insurers and the government promote standardization to achieve better quality care, centralization could funnel directives more quickly through the system.
"Business in general is constantly pushing to say, 'How do we get the most value?'" said Susanna Krentz, a senior principal at the nonprofit Nobilis Center for Health Innovation near Chicago. "Health care systems are doing the same thing."
Change never occurs without discomfort.
"Whatever strategy the corporation adopts, it has to be consistent with the corporate culture," said Donald Davis, a managing director at TriBrook Group Ltd., a health care consulting firm in suburban Chicago. "Culture eats strategy for lunch."
Krentz and Davis said hospital systems around the country are trying to figure out the right balance of centralization and independence.
"There's no one right answer," Krentz said.
She points out the calculation might be quite different for BJC. It has hospitals ranging from a large academic medical center, Barnes-Jewish Hospital in the Central West End, to the 22-bed Clay County Community Hospital in Flora, Ill.
BJC's chief executive, Steve Lipstein, agrees. BJC corporate sets priorities and determines how progress will be measured. All of the hospitals use the same clinical-performance and patient-satisfaction scorecards, for example. But Lipstein said BJC's hospitals have considerable autonomy in implementing the objectives.
And, while Lipstein said it's important to manage costs and prevent duplication, he thinks physicians should be given the tools and equipment they feel is necessary to do their best.
On a side note, not all of this year's hospital layoffs have been the result of strategic change.
Some — including about 45 positions at SSM's St. Mary's Health Center in Richmond Heights and 25 at its DePaul Health Center in Bridgeton — stem from the hospitals seeing fewer patients than they expected.
Citing similar declines in patient volumes, Missouri Baptist Medical Center, BJC's outpost in Town and Country, said last week that it was laying off about 40 people, mostly administrative staff and managers.
Hospitals are facing increasing pressure to improve care while cutting costs. Quality directives from managed-care companies and the government are coming with slight, if any, increases in payment. And lately, some hospitals are seeing fewer patients.
It's not clear exactly what's driving the trend, but here's a possibility: As health plans raise the patients' portion of their medical bills and more families have fewer dollars to spend, some might be holding off on care. Meanwhile, outpatient and testing services continue to grow, sending more patients out of the hospital for care.
Though hospital finances might see leaner years ahead, hold off on the bake sales. Most of our area hospitals have built up healthy reserves in recent years. Indeed, difficult conditions might force them to ready themselves for the next generation of health care.
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