How to Turn Around a Bankrupt Hospital: 4 Lessons From South Hampton Community Hospital in Dallas

When Ed Downs took the reigns as CEO of South Hampton Community Hospital in Dallas last summer, the hospital was emerging from its second bankruptcy, which included a forced closure of the facility that dropped the census of the 111-bed hospital from around 50 patients to zero without any warning to the hospital's staff. Although the hospital was reopened shortly after its sudden shuttering, the forced closing was all over the news, making the rebuilding process even more difficult.

South Hampton is surrounded by two large non-profit hospitals with 300-plus beds. Mr. Down's goal was to get the facility back living off its revenue — a feat which he has since achieved with the help of his management team, physicians and staff.
So, how did South Hampton turn itself around? Mr. Downs shares four successful practices that contributed to the hospital's success.

1. Communicate, communicate, communicate. After the hospital's closure, employees and physicians were both enraged and confused about their lack of knowledge of the hospital's troubles. For his first 120 days, Mr. Downs met continually with medical directors, physicians, employees, vendors and community members to determine the biggest issues plaguing the hospital so they could be addressed first. "They wanted to hear anything and everything about the facility," says Mr. Downs. "Their biggest concern was no one communicated with anyone."

2. Address inefficient processes. All successful turnarounds depend greatly on support from managers outside the executive suite and require putting and keeping proven best practices in place, says Mr. Downs. South Hampton took the approach of bringing in a process improvement consultant and brought on a new chief nursing officer who had just returned from managing a battalion hospital in Iraq to improve hospital operations.  "Look for demonstrated best practices and processes from other entities and use that as your guide. Often, just implementing those will fix many of your problems," he says. "Then you have to monitor them and hold people accountable."

South Hampton started by fixing processes that would immediately improve quality, which Mr. Downs says is a hospital's most important key to success, and then moved to put in place processes in other areas. Take the hospital's method of admitting new inpatients, for example. Before the turnaround, physicians would call up the admitting desk, often providing clinical orders, but the administrative staff in that department was not qualified to take the orders. This angered the physicians who would later be called by a floor nurse asking them to repeat the orders, says Mr. Downs. "Now all physicians have a direct line to our nursing supervisor who takes the orders, fills out a form and then takes that to admitting," he says. "Getting her a cell phone only costs us $60 a month, and it has greatly improved admitting efficiency." Mr. Downs admits this system made need changes as the hospital's volume increases, but it currently serves the hospital's needs.

3. Focus on customer service. After improving key processes, the hospital worked to improve the customer service it provided. "I don't run this hospital. The staff runs this hospital," says Mr. Downs. "I'm easy to replace, but it's very hard to find a good ER or ICU nurse. Our goal is to keep everyone in a job, provide great patient care and become the hospital of choice for our community." Employees without a patient-centered mentality were allowed to leave, and management worked to keep high-performing employees satisfied with recognition events and other employee relations programs.

After focusing on the customer service it provided to patients, leadership turned to the service it provided to local EMT groups. A full-time marketing employee from the hospital regularly visits will all shifts of local EMT service providers, collects any complaints or compliments and brings them back to the hospital to be addressed. Today, the hospital's ER treats up to 900 patients a month, a more than three-fold increase from its patient visits at the time Mr. Downs arrived.

This level of personal service helped the hospital differentiate itself from its competitors. "We're between two large Methodist facilities, we can't compete with them, but we can be the community hospital of choice for patients who don't want to go to big instuition and get lost," he says. "Patients don't always want to drive 20 miles to go to a facility where they don't know anyone, have to pay for parking and can't move easily from department to department."

4. Attract new physicians. Fixing clinical quality and customer service problems allowed South Hampton to attract new physicians. "The three things physicians want more of are time, quality and money," says Mr. Downs. "If you give them quality, that frees up more time in their lives." Once the hospital had improved in this area, Mr. Downs began meeting with physicians who had stopped sending patients to the hospital to find out their issues with the facility and lure them back. He took the hospital's biggest physician champion, the immediate past chief of staff — a physician who grew up in the area and whose mother drove him to work on his first day at the hospital — to the meetings to provide a physician's point of view.

The hospital started offering block time and developed new product lines, such as a vascular lab, to recruit specialists. Medical staff began reaching out to colleagues, and more physicians came on board. Since its bankruptcy, the hospital has added nephrologists, vascular surgeons and a pediatric cardiologist. "We're not going after the big open heart or neurology programs. There are big faculties that do that very well in our area, but what we can do is fill our community's needs," says Mr. Downs.

South Hampton also added wound treatment services that include hyperbaric chambers, in response to the large number of patients with renal and cardiovascular disease and diabetes in the area. "We now have two chambers that are full every day, and we are thinking of bringing on two more," says Mr. Fox.

A success story
South Hampton was able to emerge from bankruptcy by addressing inefficient processes and improving customer service, which in turn attracted more physicians and more patients to its facilities. The hospital's census and outpatient visits are up and it remains financially sound. While Mr. Downs admits the future of community hospitals is uncertain, he believes there will always be a need for independent community facilities like South Hampton.

"Larger institutions are sprouting up everywhere in areas that are mostly affluent, and the payor class is high in commercial. The community hospitals still around are located in areas of need where the population is not as affluent. If we don't support those hospitals, what happens to those patients?" he asks. "Although I ultimately believe healthcare is a business, I feel we still have to have the human touch. Closing a small community hospital could make patients' care more difficult. You have to weigh the choices."

Learn more about South Hampton Community Hospital.

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