California system's revenue spiked 14% after establishing 'turnaround group'

Stephen DelRossi and the executive team at Northern Inyo Healthcare District in Bishop, Calif., have had their work cut out for them over the last year.

The district was on the brink of bankruptcy last year, according to The Inyo Register, after 10-plus years of "fiscal mismanagement." Mr. DelRossi said the hospital had around 80% chance of going bankrupt at the time, and the administrative team tried to find ways to cut costs.

Mr. DelRossi, CEO and CFO of the system, told Becker's he created a turnaround group with around 25 permanent members and subject matter experts who were brought in on an "as-needed basis" to right the ship. The TAG group had five subcommittees:

  • Labor, which covered salaries, wages, benefits and professional fees
  • Revenue
  • Services and operations
  • Materials, contracts and other services
  • Special CEO and CFO items, which covered governmental funding, regulations and oversight

"Since maturation of the group, operational expenses are down more than 8%, volume is up more than 10%, and revenues are up more than 14%," Mr. DelRossi told Becker's. "We have opened cardiology, and we are in the process of opening neurosurgery (spine)."

In the last few months he has also focused on the workplace culture to transform into an organization that "supports change, champions improvements and accepts responsibility." He has spent time right-sizing the organization to avoid overstaffing and fit the right people in the right roles.

TAG worked with the system to increase wages by more than 20% while reducing full time employees by more than 50%. Inyo Healthcare also dropped contract labor by more than 20% FTEs and reduced wages per adjusted bed day by 10%-plus. In the last half of 2023, Inyo Healthcare cut costs 8% with targeted strategic efforts.

"All in all, a good year for moving the needle," Mr. DelRossi said.

The executive team will continue to zero in on revenue cycle management for the next year to build on its success. Mr. DelRossi told Becker's the system invested in technology to maximize the revenue cycle and reported a 75% drop in denials.

"With cash collections at 87% of net patient revenue and denial rate approaching 5%, correcting these two items will move the hospital to a positive position," Mr. DelRossi told Becker's. "We are also expanding services and service lines to generate more revenue."

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