Marin General Hospital managers begin effort to trim expenses 3 percent over the next 18 months.
By Richard Halstead, The Marin Independent Journal, Novato, Calif. | |
McClatchy-Tribune Information Services |
"We have engaged
He said the goal is to make the cuts over the next 18 months.
Friedenberg wrote that the good news is that "If we can reduce our operating costs by three percent, we will weather the current financial difficulties." He also wrote, "The bad news is that if Optimize Marin General (OMG) is unsuccessful, our hospital's future will be questionable."
Domanico said, "Jon's memo is directionally correct. I think his goal was to emphasize the importance to our employees of our Optimize Marin General effort."
Domanico said, "Today, all hospitals are facing financial challenges due to declining inpatients and a tightening of reimbursement from insurers and governmental agencies."
In the first quarter of 2011, Marin General reported 2,498 discharges, 11,559 patient days and 558 surgeries; in the first quarter of 2014 it reported 2,308 discharges, 10,129 patient days and 531 surgeries.
"There has been a continual shift from inpatient to outpatient," Domanico said. "For example, we are now doing total knee replacements on an outpatient basis, and a year ago those patients would have been admitted to the hospital."
He said hospital stays for hip replacement surgery have also been dramatically reduced, and patients that used to be admitted for intravenous antibiotic therapy are now treated on an outpatient basis.
"There are a whole host of quality-of-care changes that are being encouraged by the government and we are fully participating in those processes to improve care, make it more efficient and minimize people's need to be in the hospital," Domanico said. "It might sound bad for business, but it is good for patients."
In his memo, Friedenberg also said that the hospital's "payer mix" has shifted, resulting in more patients covered by
Domanico said, "In California, the state chose to expand
Domanico said Optimize Marin General will be implemented in "a very thoughtful and targeted" way.
"This is absolutely not an across-the-board approach," he said.
He cited a few examples of contemplated cost cuts. These included renegotiating drug and supply contracts, lowering inventories of supplies and drugs where feasible, working with physicians to standardize supplies and instrumentation and adjusting staff scheduling to better align with patient demand.
Domanico said it is too early to discuss how the cost-cutting program might affect nurses at Marin General. The nurses' current contract ends in December.
In his memo, Friedenberg wrote that the financial challenges Marin General faces are not unique.
"Every hospital in
Friedenberg also noted that
"Health care reform is reducing utilization of hospitals so hospitals have to cut their cuts," Kopp said. "Marin is in a favorable position; but they have to be cost-efficient."
Kopp added, "It's a good thing. We spend too much money on health care. We're getting at one of the core causes, which is the overutilization of hospitals."
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