Hospital Operations and Turn Around
Meridian Healthcare Partners led the turnaround of Kern Medical Center from a $21.2 million net loss for the fiscal year that ended June 30, 2014 to a net income of $7.7 million a year later through improvements in the revenue cycle, labor productivity, physician enterprise performance, operational efficiencies, a focus on profitable growth, and managed care contracting strategies.
Kern Medical, a 222-bed county-owned safety net hospital, serves the community’s 860,000 residents as the only trauma center and teaching hospital. The Medical Center’s specialty and primary care clinics treat over 110,000 outpatients each year and many of the area’s physicians graduated from its graduate medical education programs. However, the hospital faced potential closure due to $3 million a month losses.
In December 2013, Kern County entered into a five-year management agreement with Meridian Healthcare Partners to bring financial solvency, provide stable leadership, and transfer the medical center from operating as a county department to a public hospital authority. Meridian initially assessed the organization’s issues to develop plans addressing the medical center’s leadership, financial controls, operations, information systems, labor, service quality, medical staff, and academic programs. Within 18 months, Meridian achieved the financial results necessary to allow the hospital to continue its mission as a vital resource in its community.
Turnaround Initiatives
- Improvement in revenue cycle performance including a complete restructuring of scheduling, authorizations, documentation, coding, charge master, billing, and collections with monthly gains in excess of $750,000 in cash collections.
- Implementation of a labor productivity system resulting in real-time labor management leading to monthly improvements in excess of $1.5 million.
- Transition of County-responsible medically indigent patients from the hospital’s Low Income Health Plan to Medi-Cal (Medicaid) HMOs resulting in monthly improvements of $500,000.
- New managed care strategies achieved gains in excess of $900,000 each month.
- Focus on profitable growth and launching new services including a Comprehensive Medical Home, outpatient hand clinic, outpatient wound care clinic, as well as the establishment of two new clinic sites resulting in outpatient clinic visits increasing from 6,400 per month to nearly 10,000.
- Establish strategic framework with County Board of Supervisors.
- Successfully facilitated full accreditation of two graduate medical education programs previously on probation by the Accreditation Counsel of Graduate Medical Education (ACGME).
- Establish an employee engagement program.
- Evaluate and recruit new C-suite leadership through Meridian.
- Launch of a dedicated LEAN-Six Sigma team to eliminate waste.
- Develop and implement a physician assessment, recruitment, and compensation model resulting in stabilization of employed physician faculty and new hires in endocrinology (2 positions), pulmonology critical care (2 positions), radiology (2 positions), trauma surgery, pathology, rheumatology, OB-GYN (2 positions), emergency medicine (2 positions), ophthalmology, and internal medicine.
- Development of an Ambulatory Surgery Center.