Budget Revisions Coming

ksbpulseUncategorized10 Comments

Last Friday, the leadership team was challenged to revise their departmental budgets for the second half of the year. As a part of new developments, KSB Hospital is poised to receive considerably less payment for services beginning soon.

First, Blue Cross/Blue Shield of Illinois has indicated that they intend to renegotiate the contract they have with us. According to the terms of the agreement, they can give ninety days notice to end the current contract and renegotiate a new one. Several hospitals across the state have recently renegotiated contracts, so we have some idea of what to expect. 

Second, the State of Illinois recently enacted Medicaid reform legislation. Part of the reform package was a 3.5% rate reduction for hospitals. There were some positive financial changes in the package too, but the rate cut is the most direct result. 

Third, as we’ve done for more than a decade, we promised our Board of Directors that we would produce a 5% margin for the year. Our margin allows us to reinvest and develop our organization, through employee raises, capital equipment, facility improvements, and expanded services. 
So, with revenue reductions on the way and a commitment to maintain our margin, how can we succeed? That’s what we’re asking departments to work on now. 
Your directors are working on revised budgets right now to reduce our expenses by $2 million between July and December, that’s a reduction of about 2% across the organization. 
Because of your hard work and commitment to excellent patient service, we’re still planning to increase employee pay as a part of the upcoming performance reviews. But that means that we have to work extra hard to find opportunities to save $2 million without negatively affecting employees or patients. 
As always, your input is an important part of finding solutions. Share your comments here on The Pulse or talk to your director or vice president with cost saving ideas. Good ideas can come from anywhere and anyone.
I’m confident we can do it. Working together, we can find opportunities for better efficiency, smarter financial decisions, and cost savings. We need everyone on board for this challenge–but together, I’m confident we’ll make KSB Hospital stronger, leaner, and more committed than ever to serving the community.
– Dave

10 Comments on “Budget Revisions Coming”

  1. One way to save money is not to duplicate work. This could be between depts and/or between poeple. I know for the incoming/visiting students, etc, there are several people doing similar work for the same student. This is one example and I'm sure if time was taken to review work flow, there would be more of these circumstances.

  2. I can agree with the need to seek ways to reduce costs and I think it is a good idea to have all departments look at spending and find things that can be reduced or eliminated. But I think too that the bottom line can be strengthened by also looking at ways to increase the fees billed and collected. I suspect that every department services that they think may be underutilized. These should be identified and then decide the reason for underutilization. Sometimes referral sources don't understand the value of a service, or may not even know it is provided. Also, the public may not be aware of all the services provided by the KSB system. If every department, with the help of administration, sought to improve the knowledge of range of services overall charges and collections would increase. This combined with some cost cutting could make a big difference in the bottom line and help prepare for a reduction in fees collected.

    Tied in with this is the general suggestion that KSB work to educate all employees on the range of services provided by KSB. Every employee, regardless of the job skill or job level, represents KSB to the community. Every employee has family, neighbors, and friends that are recieving or seeking to receive medical care at any of the sources in the community or surrounding community. A knowledgeable employee can be a spokeperson to the public, letting them "We can do that at KSB!" This could route people into the system that might go elsewhere or establish a person or family with a KSB doctor, whereas future healthcare services would end up somewhere else because of current need the prospective patient didn't know KSB provided.

    All employees can be seen as Ambassadors for KSB and can help the hospital grow by being informed of our range of services and by embracing a mindset that seeks to bring people into the KSB system.

  3. Dear Mr. Schreiner
    Thank you for your open leadership and allowing employees to participate in the process of determining future goals and strategies. I am very excited to hear about the teams work. I wonder if there is any thought once the team has the ‘overarching’ goals identified, of drilling those down to the department levels ? This is an area of opportunity for us. I have not been made aware of department specific goals, and when informed that we are under budget for revenue or over budget in expenses, it would be beneficial to me to know what those budgeted to actual deficits are. By having the goals feel relevant, visible and specific to our own departments will help us see the big picture. A great tool used in many organizations is the Balanced Score Card. This is a living document or ‘list of goals’, generally annually based that helps align the organizational strategies , vision and goals with day to day business activities of a dept [ I am sure you are familiar with this]. By having department data that feeds into the organizational strategies can make it more tangible for employees and identify cost reduction i.e.

    (over-arching organizational goal) Financial Stability- 5% positive margin.
    Dept Specific goals may include under the organizational goal for example;

    Accounts Receivable: number of days cash on hand.
    Housekeeping: Room turn- around time from patient discharge to new admit.
    P.T. Rehab: Revenue per FTE or number of Now Shows.

    By reviewing the hard data from month to month and over the year can help assist in identifying need for future resources, facilitate areas for process improvement, show trends and seasonal adjustments but most of all engage employees in meaningful dialogue and input.

    I know that there is a wonderful wizard pulling the strings behind the curtain but I need guidance as I travel the Yellow brick road to success, and tools to help me identify the daily ‘flying monkeys’. I have a heart, and I want to be engaged, I have a brain, and I want to be educated , I have courage, and I want to be empowered, so that I might say “ Toto we’re not in debt anymore” and exchange my red shoes for black, because ‘there’s (really) no place like KBS (home)….there’s no place like KSB….

    Respectfully submitted,
    Deb (a.k.a Dorothy) Davey, P.T.

  4. How about cutting down on the lights that are on all night long? They can be every other light or dimmer lights?
    How about making sure all AC/heat units are off when not occupied?
    Vending machine with salads/healthier options included for night shift.

  5. It is time for KSB to start charging for milk at breakfast. I truly appreciate my free milk but would rather pay a fair price for a good provided to me and make a contribution to the food budget. Give us a month's notice, share what the milk will cost and then start charging!

  6. I think dietary staff should be paying for their meals,I am sure that adds up to quite a bit in just one week. Day shift eats 2 meals a day. The rest of us don't get free items from our departments.

  7. I agree dietary staff should have to pay for their meals; everyone else has to pay for their food. As a nurse I don't get free healthcare, I have to pay just like everyone else.

  8. I've noticed how much the summer interns get for food. Why cant they be charged when they come in at night or on the weekends when they are not on the clock?? They come for at least 2 if not all 3 meals and yet they still get to charge. That right there would help everyone out. When we are not on the clock, we still have to pay for our meals.

  9. I think a lot of money could be saved by keeping the temperature a little warmer in the hospital, especially the offices. In the office where I work I regularly have my space heater and a sweater on and I'm not a particually "cold" person.

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