Sunday, May 13, 2007

MVH Gets a Beancounter....5/14

Michael F. Collins is the new CEO at MVH. He's not a stranger to the area, being the head beancounter at Emerson in Concord, MA. Considering he is coming from a system that pulled a net of $5M, from a gross of $384M (translates to 1.3%), and going into a hospital with a -$87k (-0.1% return) net, everyone hopes some of that will rub off.

Let's hope that he avoids the predictable, short-term cost-cutting measures: Staff reductions. It's easy to say, "Cut 10% across the board." But reality starts to sink in. Housekeeping cleans the same amount of square footage in halls and other public areas no matter if the census is full, or only one patient. Security patrols the same buildings, empty or full. And, as another example, the health centers here may have an increased utilization during the same period--should we short staff/shorten hours? It would seem to have an even more negative effect on returns.

But, consider this: Back when I was hiring (Yeah, I know, a tell....), replacing any employee was at a minimum cost of $2-5 thousand. Now, with all the OSHA, state, and JCAHO requirements, the recruiting fees, advertising, bonuses, relocation, orientation, and such, it's far, far more. Cuts might help this quarter, what about next??

My drive would be to increase the gross, and take a smart look at the overhead. Keep the staff you have, with certain exceptions. Switch from quarterly goals to a longer view. Take a closer look at CPT codes, justifications, and repeat mistakes. "I don't have time to do it right" is not an excuse, it's a reason to leave.

Why do I post advise? Because if they follow it, it will change Essent. If they don't, well, there's always, "I told you so....."


Anonymous said...

Seeems Hud likes "the boys" from Emerson Hospital in Concord, MA. Nashoba Valley Medical Centers CEO Steve Roach (previously CFO at NVMC) came from Emerson Hospital as well. Emerson Hopsoital is the hopsital of choice for many of the local residents. There is no comparison in the quality of care or the talent of the medical staff at these two facilities. These hospital are in two different leagues. NVMC is a pick up team and Emerson is the Varsity Team.

Anonymous said...

Were I this Collins guy, I wouldn't go the staff cutback route until first I did several other options:

Unpaid time off (shortening of hours)

Staff reduction by attrition

Seriously looking at cutting so-called "deadwood"

CLosing wings or floors to consolidate patients

Cut back on PRN staff

Hiring freeze

Halt on raises

Those are harsh enough, but they're a lot better than a 10% cut across the board. Look what that tactic has done, if you don't believe me.

Of course, the alternatives I mentioned would be temporarily, and would be stopped when business and revenue picked up. After all, other businesses have similar tactics during slow periods.

I know McCuistion did such things, and we managed to get through without such draconian measures as Dud seems to approve.

Anonymous said...

Obviously, Stevie didn't tell Mikey about the blog. Let's just wait and see how long this guy lasts. Time will tell.