In the dynamic world of healthcare, it takes more than passively sitting behind a desk and reviewing census numbers and statistics to ensure your hospital is going to survive. Having a successful and profitable hospital requires aggressiveness and a willingness to embrace innovation.
This is the challenge I faced more than 10 years ago when I accepted the position of CEO of 216-bed Sacred Heart Hospital, in Eau Claire, Wis. An affiliate of Hospital Sisters Health System, the organization was struggling to survive and rumors circulated that the hospital would close. At the time, I knew it was paramount to find ways to attract and retain the best physicians and medical staff and keep patients in our local community instead of losing them to hospitals in nearby cities such as Minneapolis or Rochester, Minn.
Part of my approach to make Sacred Heart Hospital successful was to be aggressive. I firmly believe that outstanding healthcare, advanced technology and continuous innovation should not just belong in big cities or large academic centers. Access to the latest medical technologies is key to the long-term viability of an organization, no matter the location or size. So is a passion for patient care excellence.
The first step that my leadership team and I took was to expand the hospital's existing neurosurgery service into a comprehensive program that offered the full spectrum of neurosurgical care. Over several years, our hospital made substantial investments in state-of-the-art technologies, including two “smart” operating suites equipped with advanced intra-operative imaging and 3-D mapping capabilities. This was accompanied by innovative physician and nursing leadership, improved pre-op and post-op care, and a sophisticated administrative structure to support it all.
Investments made to our neurosurgery service line were more than just a marketing opportunity. These investments created a “halo effect” within our organization and elevated the level of care in other areas of our hospital as well, such as in our emergency department, critical care and multi-disciplinary teams. These investments also enabled our hospital to upgrade clinical resources in other service lines. Most significantly, we added an open-heart surgery program, as well as advanced capabilities in orthopedics and cancer care. These changes raised the case mix index for these services from 1.19 in 2005 to 1.40 in 2010, while maintaining overall volume.
The bottom-line impact of this increase in acuity has been dramatic. Contribution to overhead from neurosurgery rose from break-even in 2002 to nearly $6 million in 2009, while contributions from cancer, orthopedics and cardiac services are up 50% since 2005. As a result, Sacred Heart Hospital's total operating margin grew by nearly 2% per year since 2008 and has increased again in 2010, reaching levels not seen for 15 years.
These initial developments not only make previously unavailable services accessible to the 450,000 residents of Eau Claire and our surrounding regions, but they've also raised the standard of care in the areas we serve.
That said, there still was more to be done. Healthcare reform has created a lot of changes and uncertainty in the future of healthcare. To help our community better understand what is taking place, and for our organization to better understand our community, we're engaging community members in our upcoming five-year strategic planning process. Sacred Heart Hospital and our sister hospital, 102-bed St. Joseph's Hospital in Chippewa Falls, Wis., are asking our communities for input in charting the future of their healthcare system. The information we gather will be unveiled in early 2011 with the launch of our new strategic plan, Imagining the Future: 2016.
While I understand that these approaches may not work best for all hospital organizations, I recommend that healthcare CEOs take a step back, learn to be aggressive and embrace the world of technology. You never know—it just may save your hospital from closing its doors.
Steve Ronstrom is president and CEO of Hospital Sisters Health System's western Wisconsin division, which includes Sacred Heart Hospital in Eau Claire and St. Joseph's Hospital in Chippewa Falls.