Modeling itself after Columbia/HCA Healthcare Corp. and other large systems, the New York City Health and Hospitals Corp. behemoth is attempting to form a leaner, more efficient healthcare network.
Starting with HHC's corporate office, President Bruce Siegel, M.D., is consolidating some functions, slashing positions and shedding bureaucratic red tape. HHC's board of directors approved the interim plan for reorganization, voting 9-5, on March 31.
"This is just a beginning," said Dr. Siegel, who took the helm of HHC in February. The corporation plans to restructure its hospitals and ambulatory-care services in the five boroughs of New York City into several "regional systems."
It's also looking at a possible joint venture with another managed-care provider. Its own HMO, called Metropolitan Health Plan, has captured less than 10% of the local Medicaid population.
Before year's end, HHC also will seek to join a group purchasing program and contract out some services that it used to provide directly, such as food service. Dr. Siegel declined to elaborate because "there are huge union issues" involved.
Dr. Siegel analyzed healthcare systems nationwide to find ways that HHC could operate more efficiently. He found that HHC's corporate office is twice as big as it needs to be.
The newly pared corporate office has 11 vice presidents and senior vice presidents, down from 19. Five divisions, instead of 12, report directly to the president (See chart). For example, under HHC's new structure, there will be one senior vice president of finance and capital, rather than separate vice presidents in charge of those functions.
Dr. Siegel also eliminated the position of vice president for Equal Employment Opportunity, a move that concerns some board members. Defending the decision, he said EEO remains a major commitment but doesn't need a vice president to head up the effort.
In recent months, with the latest tran- sition of power at HHC, several senior executives have left. For example, Benjamin Chu, M.D., senior vice president for medical operations, started last week as vice president of clinical affairs at New York University Medical Center. Regina Morris, HHC's senior vice president and chief operating officer, and one of MODERN HEALTHCARE's 1992 Up and Comers (Oct. 26, 1992, p. 40), or rising young executives, is seeking a new job in the city, sources said. Ms. Morris couldn't be reached for comment.
The restructuring will result in 600 to 700 fewer jobs in HHC's corporate office, which has a staff of 1,200. Some 300 of the workers eliminated from the corporate office will be reassigned to positions in the corporation's 16 acute and long-term hospitals and numerous clinics, for a net savings to the corporation of $17 million.
Decisions about what jobs to cut will be made over the next six weeks as the corporation's senior vice presidents meet with their staffs.
The corporate office reductions will be accomplished by July 1.
Dr. Siegel said that by year's end, he intends to slash 2,200 jobs throughout the corporation. The cutbacks are part of a plan to close a $189.8 million deficit in HHC's $3.5 billion budget for fiscal 1995.
In addition, four "guiding principals" are shaping the new HHC. Dr. Siegel is seeking to increase quality of care, move decisionmaking authority closer to the actual delivery of care, respond more quickly to the incentives of man-aged care and healthcare reform, and improve relationships with the corporation's individual facilities.
Beyond saving money, the new struc-ture is "more designed to make (HHC) work as an integrated system," Dr. Siegel said. Currently, the executive directors of HHC's 16 hospitals see the corporate office "almost as another regulatory agency," he said.
To illustrate his point, Dr. Siegel showed his board of directors a chart depicting all 37 steps that it takes for an executive director to get a capital project completed.
Reducing the size of the corporate office and moving decisionmaking authority into the hands of hospital administrators makes sense, said Debra Goldman, assistant director of voluntary initiatives for the City Hospital Visiting Committee, a volunteer group that produces an annual report on patient care at New York's public hospitals.
However, Ms. Goldman said she'd like more details about the positions that will be eliminated and what impact it will have on patient care.