How to Reduce Costs and Improve Quality: 4 Tips From St. Vincent's Medical Center CFO John Gleckler

In fiscal year 2012, Bridgeport-based St. Vincent's Medical Center was the most profitable hospital in Connecticut, according to a September report from the Connecticut Office of Health Care Access.

During the fiscal year, the 473-bed community teaching and referral hospital, an affiliate of St. Louis-based Ascension Health and subsidiary of St. Vincent's Health Services, had a total margin of 18.9 percent, according to the report. It was far from a typical year for the hospital, says John Gleckler, senior vice president for finance and CFO of St. Vincent's Health System.  He says moving associates from a defined benefit plan to a defined contribution plan, as well as investment income, were significant drivers of the year's margins for the medical center. However, St. Vincent's is also engaged in various long-term efforts to contain costs and increase quality of care.

1. Turn to employees for ideas. When it comes to identifying ways to hold down spending and provide better care at St. Vincent's, Mr. Gleckler says it's not just the executives who participate.

"One of our biggest programs is our 'Bright Ideas' program, where any associate can put forth ideas," he says. "We reward employees for smart ideas on how to reduce costs and improve quality."

2. Focus on safety. St. Vincent's has experienced success with what Mr. Gleckler calls a high-reliability initiative, which aims to improve safety within the organization. He says it not only makes the workplace safer for patients, families and employees but will also cut costs in the long run.

"There’s a huge cost savings in reduction in improving patient outcomes and reducing unnecessary care associated with adverse events," he says.

In addition, he says there are savings in reduced employee loss of time, through worker's compensation cost and through litigation.

3. Spend wisely instead of cutting costs. Based on his experience, Mr. Gleckler says he would advise other hospital and health system CFOs seeking to keep their organizations fiscally strong to think about spending the right amount in the right place rather than cutting down.

"That's what we're finding here," he says. "We don't think it's just cost cutting but as spending more wisely where the community needs it."

For instance, St. Vincent's decided to focus on its oncology care about a decade ago because the organization discovered there was a big need for those services in the region, based on assessments of the local community.

4. Invest in technology. Facing dwindling revenues and pressure to contain costs, healthcare providers might hold back from capital spending, Mr. Gleckler says. However, he advises executives not to hold back across the board, particularly concerning technology.

"Try to pick the areas where capital would be better invested for future growth," he says. "Right now, we're investing a lot into our informational systems, patient portals and the upfront revenue cycle process."

More Articles on Hospital Finance:
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10 Statistics on Hospital Labor Costs as a Percentage of Operating Revenue 

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