Breath Life Into Your Mission Statement

Who am I? Why am I here?

Oh the questions of human existence. They should also be the questions of your hospital's existence. Mission statements can be for the organization as a whole, but also for each part of the organization that feeds into the larger mission. Whether your mission is for the organization or for the med/surg first floor, your mission should have the same characteristics:

Missions should be broad in scope but specific in action
You don't want your mission statement to put your organization in a box. "We will treat elderly women who have breast cancer." That may be a great mission for a department, but it doesn't allow innovation and creativity in the services your organization offers.

Mission statements aren't meant to change with the newest fad
Mission statements are meant to last the test of time. Your mission statement in the 90's may have been to develop an organization to meet the needs of managed care. However, we have seen managed care decline dramatically, and that would not be an appropriate mission for today.

Your mission statement should specifically identify the market that you serve
This is the who, what, when, and where of your statement. Some hospitals may serve a town, some may serve at state, and some may serve a special group (think the VA).

Your mission statement should convey the special qualities of your organization
This is about how your differentiate yourself in the marketplace. It helps you to distinguish your hospital from the one in the town 10 miles away. As we talked about in earlier posts, service quality can be a great way to differentiate yourself from your competitor.

Connecting

Hospitals used to be much like universities, where executives would get together to help one another through the sharing of ideas, experiences, and best practices. Unfortunately, the hospital industry has become competitive and ideas have ceased to flow throughout the community.

The Hospital Finance Society is going to change that. We will use the knowledge that we have accumulated from the experience of our members to help you manage your hospital's finances. With exclusive benchmarking, case studies, and our exclusive CFO network, we will connect your hospital to success like never before. If you would like to become a member, join now.

We Need More IT!

Business men (and women) love to solve problems. There is a solution for every ailment in America's medical record. It's very popular in the for-profit business community to shout for business solutions to America's health care problems. One of the more popular suggestions, as you'll find in today's WSJ, is a call for greater utilization of information technology.

There have been other industries that have been slow to integrate information technology and all the great possibilities it entails, but no industry has been more resistant than health care. We complain about quality of care problems, integration of data issues, and any other excuse to combat the barrage of IT ideas.

Well here is the ultimate excuse that will quiet the argument of any MBA out there. There isn't enough money for it! No other industry in the world has margins that are controlled by the government as much as healthcare. For example, here in Maryland hospitals were able to increase their rates for a few years to help them to recapitalize. Only one thing went wrong, government regulators looked at the profit increases and decided that hospital profits were too large. This left many hospitals with huge debt loads and a lack of cash flow to fund them.

Give that one a try with your local MBA.

Scared of the Regulatory Storm

I was at an educational event last week and one of the presenters spoke about the major regulatory changes that are going to be coming to hospitals in the near future. The major changes that are coming are:

RAC audits
IRS form 990
HIPPA

After the presentation (which was very good I might add), the general emotion of the CFO's around my table was fear. I guess it was fear about how difficult their job was going to be, or maybe fear about the financial performance of their institution.

Many of these regulatory changes are meant to improve your hospital. Use the opportunity of the RAC audits to review your charging practices. While the RAC auditors will be looking for overpayments, there are just as likely to be procedures you didn't charge for. Form 990 changes give you an opportunity to review how you serve your community. How can you improve the hospital's perception in the community?

There's nothing to fear but fear itself. If you let the fear of these changes take over, you could miss the opportunity to improve the operations of your hospital.

Thinking Long Term

I was in a meeting yesterday discussing the intricacies of hospital rate regulation. In Maryland we have a rate comparison tool called the Reasonableness of Charges calculation. This tool measures hospitals charges and identifies high cost hospitals. The discussion centered around how we bring costs at high cost hospitals down to the state or peer group average.

There are two proposals out there. One, is to use arbitrary fixed percentages above or below the peer group and rearrange money from there. Second, is to use the standard deviation of the hospital charges and identify hospitals as a percentage of that standard deviation.

As we were discussing this, I thought to myself.  Using a standard deviation is great because there is a mathematical basis for it and therefore it is more reasonable and fair.  However, I began to think, using a standard deviation means that there will always be hospitals that are identified as high cost no matter how spread out the data is.  This wasn't going to happen the first year, but 5 years down the road this is a strong possibility.  

When people are making policy decisions, it's really difficult for them to think years down the road.  Whether they are talking about hospital rates or they are talking about a $700 billion bank bailout.  Sometimes what seems like a good option now, can ultimately fall back and hit you in the face.

The Battle for CFOs

It seems the only way for people to move up the career ladder in the hospital industry is to move from hospital to hospital. It is said that the average CFO tenure is approximately 3 years.

McKinsey released a report nearly 10 years ago stating, "the most important corporate resource over the next 20 years will be talent: smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile. And even as the demand for talent goes up, the supply of it will be going down."

From the standpoint of risk identification and mitigation, this has to be on the top of every board's radar. People take time to gain the necessary experience to identify risks that the hospital is facing. However, if CFO's are turning over every three years there is no time to become familiar with the risks of the hospital. In coming posts we will explore strategies to keep the institutional knowledge in your hospital for a long time.

Assorted Links

1. Outsourcing ER dispatchers

2. Health Policy Blogging is being tracked by Kaiser

3. Washington still can't make sense of healthcare IT