by Joe Wasserman
In recent months, our industry has experienced unforeseen financial pressures as a result of the economic downturn impacting our patient volumes, operating income and investment income.
The proper response is to lower our operating expenses. This is not likely a transitory situation, and ultimately we need to learn how to operate profitably under our Medicare reimbursement.
The lack of a well planned and executed expense reduction plan may well result in catastrophic financial and operational difficulties.
What to do? Consider these perspectives:
1) Transparency: Share your financial data routinely with your management, staff, physicians and the community, and not just your board. Include state and national comparative data. Most of your constituents are likely not aware of industry trends.
2) Lead by Example: Executive management should reduce their expenses first before asking others to do so, and need to publicize your reductions.
3) Phased and Flexible Approach: Since we do not know, and can not anticipate, what the future may hold, a multi-phased approach communicated in advance will prove to be much more effective. It also will allow the organization to know what may occur next as they understand the ongoing financial performance.
4) Incentives: Consider an incentive plan for associates and management if your cost reduction plan goals are reached. Front load your incentive plan for associates rather than management to boost staff morale. Use a sliding scale incentive based on reaching the stated goals for expense reduction. Build in the incentive plan cost as part of your expense reduction plan.
5) Communicate, Communicate, Communicate: Develop a comprehensive ongoing plan for your Board, physicians, staff, and community. Clearly state the why, what, where and how you plan to reduce your expenses.
6) Minimize the impact on your staff: To the extent possible, avoid layoffs and wage reductions. Utilize wage delays or freezes, minimize overtime, evaluate open positions, rethink your benefits and variable staff departments presently not obligated to do so.
7) Explore creative ways to reduce expenses: Review and reduce the expenses in all of your contracts. Demand price reductions, especially with physician preference items. Reconsider departments that have outsourced to third parties. Cut the hours for your medical directors. Consider physician extenders in your hospitalist program. Evaluate your community benefit expenses if your operating income is below your budget. Reduce operating hours for outpatient services. Look at and consider everything.
8) Revenue enhancement: It is easy and more fun to raise revenue than to cut costs. Look at raising prices if feasible. Check on your physician loyalty for additional referrals. Market the high margin services. Consider and evaluate initiating new services and closing non-profitable services.
Joe Wasserman is the President and CEO of Lakeland Healthcare, a three-hospital system that includes two long-term facilities, an assisted living center, 3,500 associates, and 325 physicians located in Southwest Michigan. He has been in this role since 1985. Joe received his Masters of Health Services Administration from the University of Michigan at Ann Arbor. He is also a Fellow of the ACHE.

http://www.fiercehealthcare.com/special-reports/total-package-health-plan-ceo-compensations-2008 Welcome to the first annual FierceHealthcare review of health plan CEO compensation.
Despite the trials and tribulations of the past year, there are several executives still raking in quite a few dollars at the end of the day. This is a look at some of the top total compensation packages from 2008 based on information gathered from the U.S. Security and Exchange Commission.
Click on each name to get a more in-depth profile.
1. Ron Williams, Aetna
2. H. Edward Hanway, CIGNA
3. Angela Braly, WellPoint
4. Dale Wolf, Coventry Health Care
5. Michael Neidorff, Centene
6. James Carlson, AMERIGROUP
7. Michael McCallister, Humana
8. Jay Gellert, Health Net
9. Richard Barasch, Universal American
10. Stephen Hemsley, UnitedHealth Group

by Nick Jacobs
Periodically, my life crashes into certain realities that did not seem to be even a consideration days earlier. For the past six months, my consulting has directed me toward a project that had been ruminating in my mind for over five years, and that project involved the networking of approximately 20 rural hospitals via dark fiber. The purpose of the network was to create a virtual health system that was not dominated by one super tertiary power, the normal system that typically takes the "Community" out of community health care.
During my explorations, a very savvy facilitator appeared on the scene that worked with a stable of consultants responsible for telemedicine efforts in military medicine, the originators of these technological advances. Through her, I began to learn about the unlimited possibilities represented by this connectivity, ranging from telepharmacy to telepsychiatry. Of course, as a virtual health system, all of the less subtle and far less challenging aspects of centralizing finance and billing also were on the table for consideration, and eventual implementation.
While having a somewhat naïve conversation with her, I asked:
"Besides saving money on pharmacists and psychiatrist in these little rural hospitals, are there any other applications?" This is when the bells began to ring. She very calmly explained to me that there are a variety of phases of telemedicine, and that generally, physicians have entered the field cautiously and conservatively. She went on to say that I should not forget about the radiologists who have doubled and tripled their incomes through teleradiology. They were the first to have embraced these technological advances.
Truthfully, our collection of little rural hospitals has spent about $21M a year for the teleradiology connectivity to Australia in order to meet overnight radiology reads.
"So, what’s next?" I asked her. At that point the speed of her words increased as she began to explain the viability of web-based technology for cardiology, dermatology, oncology, pediatrics, et al. As I began to process all of the information, my mind began to whirl. Then I walked into the kitchen, opened my newspaper, and saw an article by Christopher Lawton of the Wall Street Journal. It was one of those "the future is now" articles entitled Cough, Cough. Is There A Doctor in the Mouse? It basically talked about the use of web services that allows patients to communicate with doctors via online video, text, chat or phone. Lawton describes the technology available to physicians via Microsoft Corp’s HealthVault, where diagnosis and even the prescribing of medication can take place over the web. The article goes on to describe patient payments ranging from $10 to $40 for web doctor visits in Hawaii, and a similar service, SwiftMD, that is currently available in New York and New Jersey. Finally, in Dallas, TelaDoc allows online and phone consultations with physicians.
So, it appears that indeed, the future is here. Let your imagination run wild.

by Tony Chen

Check out this link for some examples of how hospitals are using the popular wii game console for their rehab/PT patients.

by Nick Jacobs

A few months ago in an article in the New York Times by Alex Berenson, he discussed the obviousness of the widening gap between those who have and those who do not have in our country. The Centers for Disease Control and Prevention reported that growing dental problems among U.S. citizens, untreated cavities, have reached a higher level than any time in the last 27 plus years. What does this have to do with health? Well, take one of those tests about how old you really are, and check NO when it asks if you floss regularly. Then do it again, and this time check YES. It’s creates a fairly dramatic difference in the years to live category.



Over 100 million Americans, nearly 30% of our population, do not have dental insurance and two children died of untreated cavities last year. Even though it was only two, it’s a very sad statistic. This represents a reversal of earlier trends in dental health in our country. Berenson additionally explored the trend of dental practices that do not accept Medicaid patients and have imposed significantly higher rates for their services. Of course, just like the primary care physicians who have pursued this same route, they are now enjoying booming financial times. Their professional organizations have also fought the use of dental hygienists and other allied health, non dentists to provide basic care.



This development leaves those uncovered individuals waiting in lengthy lines for access to public dental clinics. Sadly, clinics like this are not always available in many areas. The ones that are forced to use the clincs, however, have as much as a six month waiting time for patients to be treated.



Fifteen years ago I worked to help secure funding to provide health care through medical missions to the people of rural Honduras. Upon initial examination of the most pressings needs, we discovered that the single greatest medical crisis faced by the native Hondurans was the lack of potable water and proper dental care, and our teams of mission oriented medical people pulled hundreds of teeth on each visit. This work literally saved the lives of scores of people.



As the article stated, the right to have straight, white teeth in the United States among the middle class and above appears to be a God given expectation, but, once again, as we fall behind in care of our citizens in the industrialized world, we see the plight of those individuals who do not have their own advocates or financial safety nets falling deeper into a world of financial, physical and mental despair as they face more and more life threatening.

by Nick Jacobs

How do you stop a speeding freight train? Type 2 diabetes is one of the most poignant ailments of the 21st Century. According to the American Diabetes Society website: If present trends continue, one in three Americans, and 1 in 2 minorities, born in 2000 will develop diabetes in their lifetime. That prediction alone could lead to our children having shorter life spans than their parents. In 2005 1.5 million new cases of diabetes were diagnosed in people age 20 years or older.

Diabetes is the fifth-deadliest disease in the United States. Since 1987 the death rate due to diabetes has increased by 45 percent, while the death rates due to heart disease, stroke, and cancer have declined.

Sedentary lifestyles and inappropriate diets are at least two of the primary culprits contributing to this situation. It is no secret that diabetes is a disease that can destroy your body in numerous ways including:

* High Blood Pressure
* Blindness
* Kidney Disease
* Nervous System Damage
* Amputations
* Dental Disease
* Pregnancy Complications
* Sexual Dysfunction
* Others

What is the answer? Maybe the answer is to employ the Ad Council? White bread is bad. Broccoli is great. If all else fails, however, there may be one last emergency rip cord to pull for the auxiliary chute.



A few weeks ago, Parade Magazine featured an article that reported the findings of a study from Melbourne, Australia confirming what many of us have known definitively for a number of years now. Type 2 diabetes can, through weight loss attributed to bariatric banding surgery, be reversed.



Bariatric banding surgery involves the careful placing and then inflation of a small silicone type band around the top of the stomach. How is the surgery done? A miniature camera is inserted through a small incision and transmits images back to a video monitor. The band is then inserted through very small incisions that, post surgery, can simply be covered with band aids.



This procedure limits the amount of food a patient eats and thus begins the weight reduction process. That is what contributes to the reversal of diabetes. The study found that, “after two years, 73% of those treated surgically went into remission from diabetes. That was in comparison to the other 15% who underwent the conventional therapy of diet and exercise. The surgically treated patients lose over 20% of their weight during that amount of time. The researchers did observe that the magic number leading toward reversal seemed to have been a weight loss of about 10%.



Of course the reversal itself is directly attributable to weight loss, and is only recommended and paid for by most insurance companies after everything else has been tried.



The pitfalls of the various solutions available including any surgical procedure must be fully understood, but bariatric banding surgery is: 1.) Less risky than traditional gastric bypass surgery 2.) It is minimally invasive, and 3.)Finally, it is reversible. Although this procedure as compared to the complete bypass procedure may result in a little slower weight loss, it is, according to the study, very effective.



Regardless of the type of procedure chosen, the patient must make a commitment for several months to attempt to reduce the weight through conventional diet and exercise, and in a quality, comprehensive program, numerous professionals including: a physician, dietitians, exercise physiologists, a psychologist and nurses are provided to give the patient the support needed to enable them to stay on the program.



Post surgery, that same team of professionals must be available to monitor you so as to ensure that your progress is appropriate, that appropriate nutrients are consumed, and that no complications are permitted to go unchecked.



If the train won’t stop, maybe banding is the solution.

by Jeff McKune

Having attended a couple of Joe Tye’s seminars, I was eager to read The Healing Tree, a book he first published in 2005. The book is now in its second printing.

The story begins with an evening with Mark and Carrie Anne Murphy and the tragedy that enters their lives. Carrie Anne’s struggle towards recovery is one thread that is carried through the narrative. But a deeper and richer fabric is found in her personal awakening, guided initially by young Maggie, a fellow patient at the hospital who provides unique therapy to Carrie Anne and other patients. Carrie Anne’s despair eventually leads to her discovering a new path for her life, more meaningful and rewarding than anything she had previously imagined. The story alone touched me, and I found myself sometimes both uncomfortable and inquisitive with the introspection it created in me. That alone made the book worth the reading.

It was impossible for me to ignore the glimpses that Joe provides into the healing environment that was a part of the fictional Memorial Hospital. I wondered how some of the innovations Joe discussed would ever get past a Board of Directors. But clearly Memorial Hospital was a hospital focused on much more than physical healing. The hospital’s ongoing transformation was a result of visionary leadership. One phrase that I cannot forget is “the soul of the hospital.” What is the soul of your hospital? How do your efforts contribute to the development and sustaining of that soul?

Throughout the book, Joe also reveals some thoughtful insights into nursing and those that serve in caregiver roles. The bidirectional aspect of the nurse-patient relationship is developed in a discussion between Carrie Anne and Maggie. And toward the end of the book, the hospital CEO reminds us that patients are not the only ones that need healing. Joe is a strong advocate of nursing, and it is no surprise to see this emphasis in The Healing Tree.

I consider The Healing Tree to be one of those books that takes a hospital administrator beyond mechanics and methodology – it invites and encourages visionary and transformational leadership. A section containing discussion questions is included at the end of the book for the purpose of initiating dialog regarding that transformation. Also, there is a website for the book at www.healing-story.com where you can download the companion workbook Healing the Hospital, which I understand has been popular at caregiver and leadership retreats. If you want to spark discussions as to how your hospital can better serve both patients and staff, I invite you to read and share this compelling book.

by Nick Jacobs

The November 25th, Sunday, New York Times editorial provided an in depth analysis of "The High Cost of Health Care." Six possible solutions were identified that could possibly assist in ameliorating this accelerating problem: Geography, the wide variances that occur in pricing based upon location of the service; Stick to What Works, a demonstration that only those treatments that actually have proven merit should be utilized by the physicians; Managed Care, it worked for a while, but too heavy of a hand would cause passionate kickback by both the population and the physicians; Information Technology, knowledge is power and this will produce more efficient use of the system; Prevention, everyone knows that attention to prevention works; Disease Management through comprehensive management of chronically ill patients; and finally, Drug Prices, drugs are more expensive in the United States.

The seventh and probably most important means to reduce health care costs was omitted by the Times, and by what seems like 75 percent of physicians most days, and that is Hospice care. Approximately 30 percent of all health care dollars spent in the United States are spent on the last thirty days of life. If we are close to 2.2 trillion dollars in expenditures, then divide by three and see what an impact Hospice could have on our expenditures.

by Nick Jacobs

The World Congress on Cardiology met last week in Belgrade, Serbia, and, as an invited speaker, we are going to be exploring the efficacy of the coronary artery disease reversal program currently being studied at our research institute. One of the most unique findings of our studies, as identified by our lead researcher on this topic, Dr. Darrell Ellsworth, is a major reduction in measurable depression scores. After having personally gone through the program nearly ten years ago, it is very clear to me exactly why this is the case.

When any type of serious medical reality hits us, be it a cancer, heart disease, or neurological dysfunction, we are thrown into a spiral that feels irreversible. All of our lives, we have worked very hard to ensure that we had as much control over our personal situation as possible. At the same time, we tend to live in denial of our own mortality until we are staring it directly in the face.

What we/I have found with programs like the Dean Ornish Coronary Artery Disease is that, not unlike the old factory experiment directed toward seeing if low lighting or bright lighting made the employees happier, the outcome was that either worked equally well because the act of changing the lighting demonstrated that someone was paying attention to them.

In our research, a group of highly trained medical professionals work carefully with each participant to explain his or her condition, risks, challenges and alternatives. The most important outcome, however, is that the patients are taught how NOT to be victims of their disease anymore.

It is my deep belief that every human being would benefit from this type of exposure to medical professionals, people who take the time to help us sort through our personal situations, to give us hope and to ensure that we will have mental and physical support while working toward improving our health both mentally and physically.

by Christopher Cornue

During a routine inspection of a hospital in England by the Healthcare Commission in the late 1990s, a concern was raised regarding hospitals not having consistent, evidence-based, standardized care paths. From this, approximately a decade later, the Map of Medicine was launched.

Developed for use by the National Health Service in England and Wales, this tool was created as a framework for sharing knowledge across care settings and providing evidence-based care pathways to clinicians at the point of care. This electronic, website-based tool is an impressive collection of more than 700,000 articles and resource materials. While it is “localizable” as needed, it’s an awesome repository of information. As stated on their website, “for the first time all NHS staff such as doctors, nurses, midwives, allied health professionals, healthcare scientists and trust managers will have access to a single view of the best clinical information and latest guidelines relevant to a patient’s pathway and approved by NHS experts.”

While most physicians have a good sense of particular pathways to follow with patients, this tool is best used for those situations and conditions that are less familiar to the general practitioner. Research conducted has indicated that 80% of physicians will change the care they provide as the result of evidence-based knowledge. Among other desirable results, it’s been estimated that 12% more hospitalizations could be avoided and a 19% reduction in length of stay could be achieved as a result of practice changes based upon evidence-based information.

The Map of Medicine is being rolled out to all hospitals in England and Wales as an additional resource for physicians and to assist in NHS’ clinical governance. Dr. Michael Stein, Chief Medical Officer for the Map of Medicine, stated they are in discussion with some other countries to see if this would be adopted elsewhere. Who knows if it (or something similar) might be a resource available in your hospital in the near future?