4 Keys to a Speedy and Sustainable Financial Turnaround
I see a lot of work being done within hospital departments aimed at improving bottom lines. I see teams working on IT projects and process improvement and lots and lots of measurement. The problem is, these efforts are creating a lot of busy work, but they are not translating into quick and sustainable financial results.
Here are four things I suggest you put in place to capture–and sustain–the ROI you’re looking for:
2. Stretch Targets
I recently read Leigh Page’s article about three common hospital coding problems (read article here) and thought this would be a good example to highlight what I’m suggesting. In a nutshell, improving coding problems with short stays, infusion therapy, and discharge status may represent a substantial financial opportunity for your hospital. Here’s how to work through the opportunity using the four keys I suggest above.
(By the way, this approach applies to organizations outside of healthcare, too).
Too often, I see project work with no measurement of project success, nor timely completion. I’m talking about outcomes that are directly correlated to moving the needle on the top level measure “$ cost savings.” Often this is the case because each team does not control the ultimate outcome; they merely influence it partially. To capture the ROI from coding changes, it will require a multi-department, cross-functional effort with changes from IT, finance, nursing, medical staff, and more. As individual departments, it’s hard to get motivated by implementing work and not seeing a result. I suggest:
• A sponsor at the executive level who can foster dialogue between departments
• One cost savings measure that each department can align to (when work is done across all the departments, this one needle will move)
2. Stretch Goals
Your participants need a stretch, but realistic target at the top of the house ($ cost savings) which helps the team guage “how close we are.” For RAC denials, this will be a significant (potentially $ millions) opportunity.
Stretch, but realistic, targets must be set for each project outcome measure as well.
One way to challenge yourself is to ask this question before you get started on project work: “if I reach the target on every outcome measure I’ve identified for this effort (short stay, infusion therapy, discharge status project outcomes), will I achieve my cost savings goal?” If the answer is no, then either you have not set the right targets or you don’t have all the right improvements in place.
If your hospital is like most of those I work with, you’ll know how easy it is to add more work for your staff and how hard it is to take existing work off the table (I work with a client who uses the term “to don’ts” for the second group, which I really like).
This is where the cross-functional team, led by the executive sponsor plays a key role. In order to achieve financial results quickly, you need to re-sequence, reprioritize, delay, or simply take some other work off the table.
For each “to do” you introduce to the medical, nursing, and IT staff, have you introduced a “to don’t?”
Just measuring something won’t change an outcome. It might give you a temporary blip, but it certainly won’t lead to a sustained improvement.
Rather than “what gets measured gets done,” we like to say “what gets reviewed gets done.” To drive something as big as a financial turnaround requires that the executive sponsor challenges their cross-functional team on many levels and frequently enough to convey the right sense of urgency. I’d expect to see these types of challenges occur during the project reviews:
• Is it OK for a project to be on hold for 3 months if it’s holding up your ROI?
• Is it OK for a project to be classified complete, but to see no change in the outcome measure?
• Is it OK for staff to go back to old habits if it threatens a sustainable ROI?
I’ve seen this basic structure work in many areas of financial turnaround. It takes discipline and dialogue, though, not just measurement.