Athens Regional Health System leaders worked across departments to achieve performance improvements and continue to monitor results through project management teams.


In 2014, Athens Regional Health System, one of northeast Georgia’s largest healthcare systems, was in the midst of evaluating its performance improvement efforts while launching a new electronic health record (EHR). A less than optimal EHR implementation widened the gaps in performance and negatively impacted the financial status of the hospital. The health system needed to identify performance improvement opportunities to help close a projected $29 million to $51 million gap and achieve its desired 5 percent margin.

To achieve these goals, Athens Regional engaged a consultant to assess and implement performance improvement initiatives focused on the following financial goals.

  • An immediate income statement improvement of $15 million during the first year of the initiative (August 2014 to July 2015)
  • A stretch goal of $30 million per year in income statement improvements after the first year

Leaders also aimed to achieve targeted improvements in the following areas.

  • Supply chain (particularly pharmacy and laboratory services)
  • Physician enterprise services
  • Care management and clinical and operational effectiveness
  • Labor optimization
  • Human resources and 
organizational structure

Supply Chain

Within pharmacy, initiatives focused on improving medication inventory management to reduce the costs associated with waste of expired medications and 340B optimization to manage pharmaceutical spend by accessing outpatient drugs at a lesser cost when meeting regulatory requirements. In addition, the teams focused on enhancing Athens Regional’s antibiotic stewardship program to reduce overuse of antibiotic therapy while improving—and not compromising—patient outcomes.

Supply chain management set its sights on negotiating or renegotiating contracts with various vendors, especially medical device suppliers.

The initiation of a National Provider Number allowed Athens Regional’s laboratory services to develop its Regional Lab Outreach (RLO) locations to provide a more comprehensive and timely scope of lab services and improve the patient experience. Through its RLO, Athens Regional focuses on the availability of information to enhance the accuracy and timeliness of its services to maximize efficiency and cost-effectiveness throughout the testing process.

This resulted in increased commercial and governmental volume, additional decreases in vendor pricing agreements, and negotiation with payers to add Athens Regional’s RLO to the payer-provider network.

Physician Enterprise Services

Updates to Athens Regional’s chargemaster improved revenue capture. Increasing the use of scripting allowed frontline team members to engage patients and family members in capturing copayments and deductibles at the time of service, helping to ensure enhancements in cash collections.

Physician services also accessed an analytics tool allowing for concurrent evaluation of physician coding practices, collections, productivity, and volume statistics. The tool offers detailed data that can be collated and analyzed concurrently, providing business intelligence that can translate into actionable steps toward performance improvement—before bottom line results are unfavorably impacted. It can track evaluation and management coding performance against Medicare benchmarks. Through training and understanding of regulatory guidelines, physicians helped achieve appropriate reimbursement rates for services rendered.

Care Management and Clinical and Operational Effectiveness

This initiative leveraged proven best practices to enhance communication among physicians, nurses, care managers, social workers, and charge nurses—especially during multidisciplinary rounds—resulting in improved patient outcomes that reduced length of stay and associated costs. For example, utilizing a multidisciplinary rounding template to target anticipated day of discharge, accelerate care, and plan early for discharge moved overall length of stay from 4.71 days to 4.28 days in just eight months while increasing discharges by an average of 120 patients a month during the initial measurement period.

To reduce orthopedic cost per case and position the organization to break even on Medicare, leaders at Athens Regional implemented a clinical and operational effectiveness program. The effort focused on patient education, standardization of hip and knee order sets, post-operative pain and nursing management, and proactive discharge planning.

To accomplish these performance improvement goals, training and education focused on the following areas.

  • Utilization review tools to decrease reliance on external physician advisers and associated costs
  • Patient class assignment and compliance with the Two-Midnight rule to avoid increased observation discharges
  • Nursing documentation to effectively capture charges for observation services

Labor Optimization

To support labor optimization, Athens Regional’s strategies keyed in on training, evaluation of automation, and staffing-to-demand to improve workflow in such areas as adult critical care; facilities management; IT; public safety; and environmental, nutrition, and surgical services.

Leaders at Athens Regional implemented a clinical labor optimization model for nurse staffing that pairs operations analytics with provider data. This allows for predictability modeling that assists nursing to understand the ongoing day-to-day challenges of patient demand and the supply of clinical labor needed to deliver staffing solutions that provide sustainable cost savings. The solution has been utilized by a variety of health systems, resulting in sustainable savings, increased staffing efficiencies, and increased employee satisfaction.

Finally, a position control process was implemented that requires detailed information about requests to fill open positions, including the FTE value proposition and the current departmental budget and productivity status. This provided the right detail to allow leaders to be informed before approval.

Human Resources, Benefits, and Organization Structure

A dependent audit was conducted to update employee information and ensure dependent coverage was accurate and appropriate. This involved removing ineligible dependents (e.g., divorced spouses, children who have met the maximum age limit for coverage).

Additional strategies included aligning paid-time-off practices with the market in an effort to reduce balance sheet liabilities. Finally, the organization initiated span-of-control guidelines to ensure each leader managed the appropriate number of personnel, providing better management of employees and reduced employee burnout.

Sustaining Success

In an effort to maintain projected gains, an interdisciplinary team comprised of Athens Regional clinicians and leaders from finance, supply chain, operations, and human resources was formed to provide oversight of existing and future high-visibility initiatives.

As initiatives are completed and transitioned to their leaders, project information and scorecards are housed in a central repository and overseen by project management teams who alert senior leaders when variation is present. When needed, the project management teams re-engage with the Athens Regional initiative leaders to begin process improvement methodologies to identify the root cause of the issue and implement corrective strategies. In addition, to augment leadership communication, the project management teams are responsible for reporting to executive leadership every Monday morning.

Key Performance Indicators for Case Volume
Key Performance Indicators for Case Volume

See related sidebar: Best Practices for Rapid Change Management and Performance Improvement

Results

As a result of the partnership, Athens Regional achieved the stretch target of $30 million in annual improvements by July 2015. Furthermore, the health system achieved a cumulative balance sheet benefit of $6.6 million within a year of the project’s inception. Athens Regional is expected to maintain and even improve on this pace in FY16 and FY17, with $33 million in annualized improvements projected for FY17.

Athens Regional Achieves Stretch Target of $30M in Annual Improvements
Hospital Achieves $30M in Cost Savings


Geoffrey P. Cole, MD, 
is vice president of ancillary services, Athens Regional Health System, Athens, Ga.

DeeDee Risher is manager of the project management group, Athens Regional Health System.

Lisa M. Bragg, RN, BSN, CCSGB, 
is director, delivery innovation, Navigant, Tampa, Fla.

Publication Date: Wednesday, October 05, 2016

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