Results

These two examples show how our team can serve on an interim basis to yield long-term results for highly complex health care organizations.

Client Assignment: Interim CEO – Major East Coast Academic Medical Center

Annual Financial Impact: $160 Million
Time Period: 10 Months
  • Eliminated 30% Diversion Rate
  • Increased Admissions 2.5%
  • Increased Surgical Volumes 9%
  • Increased Helicopter Flights 20%

This nationally-known academic health system provides the highest levels of quaternary services and serves as the region’s public resource in serving the underinsured and uninsured. The health system comprises a network of hospitals, clinics, an academic physician practice plan, a Medicaid health plan and the Health Sciences Schools — Allied Health Professions, Dentistry, Medicine, Nursing and Pharmacy. The enterprise has total operating revenues of nearly $4 billion with more than $275 million in research.

As Interim CEO, Shane Cerone held multi-site responsibility for operations of the Medical Center, Children’s Hospital and a single community hospital (a state-of-the-art hospital serving the rural communities). This clinical enterprise generates $2. billion in annual revenue. The flagship medical center, a 750+ bed major teaching hospital, admits more than 40,000 patients each year and completes more than 25,000 surgical procedures with nearly 100,000 emergency center visits. It serves as the region’s premier quaternary center with centers of excellence in trauma, transplant, oncology, orthopaedic, cardiovascular and pediatric care.

As Interim CEO, Cerone led the team in (1) implementing a new operating model to enhance physician engagement and accelerate institutional performance improvement, (2) assessing the quality and safety program to achieve high reliability, and (3) achieving operating margin goals. In a period of 10 months, the team completed a comprehensive safety program assessment and established a plan for improving care, developed and launched enhancements to the organization’s patient safety program, implemented a new leadership model focusing on provider efficiency and patient flow to achieve desired results in patient safety, care quality, patient experience and efficiency, modified the organization’s patient flow system by enhancing the daily safety and patient flow huddle, launched the hospital’s inpatient hospice program, established a Complex Care Committee and expanded the Enhanced Recovery After Surgery (ERAS) program.

These and other efforts eliminated the organization’s long-standing 30% diversion rate and increased FYQ1 admissions by 2.5%, surgical volumes by 9% and helicopter flights by 20% over the prior year. The annual financial impact of these changes was $160 million.

Client Assignment: Interim President & CEO – Midwest Community Hospital and Employed Physician Network

Operating Income Improvement: $17 Million
Time Period: 9 Months
  • YTD EBIDA Margin Increased To 7.3% ($10 Million)
  • Erased Prior Year EBIDA Margin of -5.3% (-$6.4 million)
  • Increased Net Patient Service Revenue 12.3%
  • Reduced Salaries And Wages 7.3%

This 234-bed hospital and regional referral center draws patients from throughout a rural region. The hospital, clinics and physician enterprise generate $204 million in annual revenue. The hospital is a leader in quality and patient satisfaction, among the top 2% of hospitals achieving the top 5-star rating from the Centers for Medicare & Medicaid Services. In a recent year, the hospital and medical group experienced a significant downturn in operating performance, posting an operating loss of nearly 20% which ultimately led to 4-level downgrade of its debt rating by Moody’s to B1.

As Interim President and CEO, Shane Cerone led the executive team in implementing a large multi-dimensional financial improvement initiative for the organization. The financial improvement plan included a comprehensive review of operations to right-size spending, improve performance of the 80+ physician medical group and implement strategies for growth. Significant initiatives included: creating a new physician executive committee to manage the performance improvement plan, executing a 6% reduction in the hospital’s workforce, implementing a revenue cycle program that improved net patient service revenue by 5%, launching an assessment of all physician contracts and compensation philosophy, designing a radio and print marketing campaign to increase market share, developing a new contingent staffing program to improve labor productivity, and implementing a defined-benefit pension plan lump sum program to reduce pension liabilities.

The organization recorded positive operating income within six months. The eight-month engagement yielded year-over-year improvements that included a 12.3% increase in net patient service revenue, a 7.3% reduction in salaries and wages, and a $17 million improvement in operating income (reducing a prior year operating loss to break even performance). YTD EBIDA margin increased to 7.3% ($10 million), erasing the prior year EBIDA margin of -5.3% (-$6.4 million). At fiscal year-end, Moody’s Investors Services upgraded the hospital’s revenue bonds and revised its outlook to positive from negative.

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