I am scratching my head from a comment a colleague made to me last week..."I hear St. Joseph's is having problems????"
He had come to that conclusion because he heard we were making cuts.
Well, "problem" is one way to view it, being financially responsible is another.
What do we know:
- Federal cuts are occurring
- State cuts are occurring
- Commercial payers are offering lower rates
- Employers are asking, please, bring down the costs of healthcare
- Costs are escalating
So we either keep going and begin to lose more and more, make less investments in growth, or we stop right now and rebalance.
If we are successful in doing that, we offset these cuts, and if we do it soon enough, we build even more capital to invest in growth.
Some organizations have chosen layoffs or spending down the balance sheet.
We have chosen an immediate across the board spending cut as phase one, engaging all departments in looking at reasonable cuts for phase two, looking at every service going forward and deciding what we can continue in this future environment. Administration, physicians, employees and business partners are all participating.
It's like balancing the family budget. If someone loses a job, you cut back.
If the roof needs replacement, it comes from savings then the savings have to be replenished.
But cutting expenses is only one part. We are also:
- Assessing all expenses, looking for places to reasonably make reductions.
- Growing the Foundation and increasing use of grants and fundraising.
- Monetizing assets; what can be converted to cash that is no longer needed to be owned.
- Looking for other options to access capital for growth.
- Reviewing if there services or programs that that are adequately served in the community that we no longer need to offer, or others that need to grow.
- MOST importantly, is understanding the relationship between quality and costs. Perhaps the biggest opportunity exists to find savings in hospital acquired conditions, re -admissions, unnecessary testing and length of stay.
These are complicated times, with multiple financial pressures.
We are doing the responsible things as an organization to prepare.
It will require focus and commitment to achieve our quality and financial goals.
Our mission, vision and values will not change, but the areas in which we need to focus and the way we provide care will change.
We are being challenged; there is no question the next few years will see ups and downs. The question is, will we be prepared? With your help, I believe we can meet these challenges.