7 things to know about UMass Memorial's financial turnaround

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UMass Memorial Health Care, based in Worcester, Mass., has turned around its finances, according to a report from The Boston Globe.

Here are seven things to know about the turnaround.

1. UMass Memorial was in financial turmoil when Eric Dickson, MD, took over as CEO in 2013. The privately run nonprofit was losing millions of dollars each month — it lost $8 million the month Dr. Dickson took over — and was dangerously close to defaulting on its bonds, according to the report. In addition, nurses at the system's flagship facility were threatening to strike.

2. Like other institutions, UMass Memorial was dealing with challenges brought on by the changing healthcare environment. However, Dr. Dickson told The Boston Globe the system's situation was more dire because it was slow to transition to a new leader and was late in making changes to adapt to new state and federal healthcare laws.

3. To bring the system up to speed, Dr. Dickson made various cuts and changes that were not popular with some. For instance, he moved to lay off 600 employees from the workforce, including clinical and administrative staff; sold eight buildings; closed operating rooms and hospital units; and negotiated a deal with the nurses union right before workers were set to strike in Worcester, according to the report. The Boston Globe noted he also transferred Wing Memorial Hospital in Palmer, Mass., to Springfield, Mass.-based Baystate Health so UMass Memorial executives could focus on their operations in and around Worcester.

4. In addition, UMass Memorial made efforts toward efficiency by centralizing scheduling at one website and one call center and purchasing supplies for the entire hospital network together, according to the report.

5. Once cuts and changes were made, the system began to see results. According to The Boston Globe, UMass Memorial lost $57 million on operations in the fiscal year that ended in September 2013. Last year, the system reversed that to a $54 million surplus, and expects to report another profit for fiscal 2015.

6. As UMass Memorial continues to face pressures to control costs and adapt to the new healthcare environment, it seeks out ideas from system employees. According to the report, employees must generate ideas on how to improve operations at the health system. Thousands of ideas have been implemented.

7. In addition, the health system launched new Medicare payment models this year, is building an outpatient surgical center in Shrewsbury, Mass., to compete for day surgery business and has started a massive $700 million overhaul of its patient record and information technology systems, according to The Boston Globe.

 

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