On Tuesdays, New York Hospital President and Chief Executive Officer David B. Skinner, M.D., sees patients. On Fridays, he performs surgery. He says it's a good way to stay in touch with the concerns of patients and other physicians.
The rest of the week, Skinner oversees 1,308-bed New York Hospital and a 13-facility healthcare network that covers Manhattan and reaches into Brooklyn, Queens and Westchester County. He also scouts for low-cost, efficient facilities with stellar reputations for quality that may fit the network's geographic needs.
Of the $21 million in combined earnings posted by members of NYH Health Care Network last year, a good chunk of it was achieved through efficiencies, such as the consolidation of services. For example, five institutions' financial services were combined, and NYU's laundry department now serves seven network institutions.
Signing up hospitals as network members hasn't been completely painless. One of Skinner's network hospitals, New York Downtown Hospital, left the fold because its board wanted more autonomy. This year it joined NYU Medical Center's loose collection of affiliates. "We learned from that," Skinner admitted, and now potential partners are screened more carefully.
Meanwhile, New York Hospital faces continued pressure to reduce costs. Taking state Medicaid cuts, managed-care discounts and looming federal Medicare and Medicaid reductions into account, the hospital could lose $135 million to $200 million in annual revenues.
"If we don't respond by controlling costs, we will certainly be noncompetitive in managed care," Skinner said.
Earlier this year, New York Hospital eliminated 150 positions, or 2.5% of its 6,000-member work force. The cuts helped reduce the hospital's operating budget by 10%, or $70 million.
The hospital's major focus now is on reducing utilization and maintaining good outcomes, Skinner said. Through "re-engineering," he hopes to reduce cost per discharge to $6,500 by the end of 1997 from the current $9,500. The hospital already has shrunk expenses by $1,000 per case by operating more efficiently, he said.
Paying the debt service on a new $810 million hospital building presents another fiscal hurdle. After years of planning, construction on the new facility began in 1993. With all the recent changes in healthcare delivery, some observers wonder whether the new building, to be completed in 1998, will become Skinner's albatross.
On the managed-care front, New York Hospital has shelved plans to start its own HMO for the network. Sources said the HMO community balked at the idea and threatened to pull their business. Skinner said it was decided that an HMO wouldn't have been the best way to spend network resources.
But if contracting HMOs take too much money out of the system, New York Hospital may revisit the idea, he said.