A year ago, I took part in a Scripps Health medical mission to Haiti to aid victims of the devastating earthquake. When we arrived in the middle of the night, we were driven to our accommodations in the hills overlooking Port-au-Prince. The next morning, as I looked to the valley below, the view was like a postcard from a tropical paradise. It wasn't until we drove into the valley later that day that we saw all the destruction.
It struck me then how different things can look, depending on your vantage point. At Scripps, changing our vantage point is leading to a huge change in how we operate.
When we looked at our operations vertically, from each hospital’s point of view, things were effective and efficient. But when we looked at our services horizontally across the system, we saw where we had great room for improvement.
During the past few months, we have implemented an organization-wide management restructuring aimed at reducing unnecessary variation, improving patient care and preserving jobs. Every department at Scripps has been reorganized within a horizontal co-management structure that aims to standardize clinical and operational functions across our five hospital campuses and 22 outpatient centers.
Horizontal team members look at data for their operating areas and determine best practices for application system-wide, while vertical teams in place at the sites have responsibility for delivery of care and meeting patients’ and employees’ needs. This ongoing constructive tension is pushing us to become a better organization, and better able to meet the financial challenges of healthcare reform.
By bringing staff together from across the system to share their operations practices, we saw clearly where we can improve by identifying best practices within our own health system. There was almost a bit of embarrassment when we realized the tremendous opportunities and potential savings we had missed, and that the changes would also improve patient safety and quality of care.
Since the beginning of October, we have identified as much as $150 million in unnecessary variation and possible annual cost reductions. Potential savings will come from across the full spectrum of care and support, especially in these three areas:
- Consolidating lab functions previously carried out in more expensive hospital settings will save $6 million. Quality will be enhanced through an automated processing center, the first of its kind in the U.S.
- Building on efforts started in 2009, we have taken pharmacy management in-house, resulting in $8 million in savings, improved standardization and enhanced patient safety.
- We will be expanding to all our hospitals a program we recently implemented at our busiest emergency department. This best practice resulted in shorter wait times, more patients being treated and $9 million more to the bottom line.
None of our cost-savings measures are based on the wholesale elimination of jobs. Instead, our voluntary Career Resource Center is identifying appropriate matches and retraining staff when necessary: 98 employees enrolled in the program in the past year, and 81 found new jobs within Scripps.
I think this is critically important. As part of our reorganization process, I’ve asked all 13,000 of our employees to come together to think of ways for us to do what we do in a more efficient way. I can’t expect them to be offering up solutions if they’re concerned about having a job tomorrow.
At Scripps, I’m proud to say we have a solid, successful foundation built on trust. But change is hard. While we are well-positioned for this horizontal restructuring and it feels like a natural next step, a change of this magnitude may not ever have happened without the catalyst of healthcare reform.
Say what you will about healthcare reform. We all know there are good parts and bad parts and many parts yet to be determined. I, for one, am glad for the burning platform it provides.
Scripps Health is now aligned like never before, and we are excited about the future. We clearly see how we will turn this challenge into something positive for us and our patients.
We’ve come down from the hilltop. Chris Van Gorder is president and CEO of Scripps Health, San Diego, and chairman of the American College of Healthcare Executives.