Greenwood Leflore Hospital’s turnaround plan should return it to profitability in less than a year and a half, says CEO Jason Studley.
Studley presented the outlines Tuesday to the Greenwood Rotary Club of what’s being called the “immediate plan” to stop the losses that are currently averaging about $2.5 million a month at the hospital jointly owned by Greenwood and Leflore County.
It was the first public presentation of a strategy that previously had been shared only with hospital employees and behind closed doors with the hospital board and Greenwood and Leflore County officials.
“It’s not all doom and gloom, but there are some very hard choices that the hospital is faced with in order to continue serving our community,” Studley said.
The hospital has been losing millions of dollars a year for several years, but those losses have been exacerbated by the pandemic. According to Studley, the hospital has spent $35 million so far battling COVID-19. Of that total, $25 million was covered by government grants, mostly from the federal government, but the rest has come out of the hospital’s cash flow, depleting its reserves.
Although the hospital still had $28.3 million in cash on hand at the end of August, almost half of the total was in a pandemic-related loan that the hospital is required to pay back through deductions in its monthly Medicare reimbursements.
The immediate plan calls for a combination of expense cuts and revenue enhancements, but Studley again emphasized that no layoffs are expected “at this point in time.” Instead, the workforce at the 1,000-employee hospital will be reduced through attrition. When employees retire, the plan calls for shifting their work onto others. The pandemic-driven loss of nurses and other health care workers who are leaving for lucrative traveling contracts is also requiring that those who remain help pick up the slack, Studley said.
“I’m going to have to ask you to do a lot more,” he recalled telling employees last week when he explained the plan to them in a series of meetings.
In order for employees to take on more responsibility, he said, there will be an emphasis on cross-training, on reducing non-productive work and on adjusting staffing levels to expected patient volumes. Although the Greenwood hospital is a 208-bed facility, less than 50 beds are occupied on a regular basis, Studley said. “We have to be able to staff at a level we can accommodate.”
He said the hospital presently averages more than eight employees per patient, a ratio that is about 50% higher than the national average.
Studley said his evaluation has also uncovered some operational inefficiencies that can be corrected. For example, the hospital’s nurse practitioners have been outsourcing to other providers about a million dollars a year in services that could have been rendered by the hospital itself. When Studley inquired about it, the nurse practitioners told him they were doing this because of a backlog at the hospital. Further research showed that the backlog was a mirage; about half of the supposedly “filled” appointments were routinely with patients who didn’t show up.
“There’s no reason we can’t double-book time slots,” he said.
An ongoing initiative at the hospital is to bring the offices for all its specialists into the main hospital facility. That serves at least two purposes, Studley said. It eliminates the cost of leasing outside clinics and it increases how much the hospital receives in rebates from pharmaceutical companies under a federal prescription drug program it joined last year.
Other revenue plans include adding or restoring lines of service that have good profit potential, more fully utilizing nurse practitioners so physicians can concentrate on building their patient numbers in other parts of their practices, and aggressively pursuing federal grant funding.
On planned expense cuts alone, it would take the hospital 18 months to be generating more revenue than it is spending, according to Studley’s estimate. The anticipated revenue enhancements, though, should allow the hospital to get to a break-even point in as quickly as 12 months, he said.
The changes, according to Studley, will also better position the hospital for the nationwide trend that is shifting from inpatient to outpatient care for the majority of patients.
“We have to start operating as if we’re an outpatient base,” he said.
In response to an audience member’s question, Studley said that Medicaid expansion, which Mississippi government leaders have repeatedly rejected, would help the hospital but by itself would not put it in the black.
He estimated that the proposed expansion in the government health insurance program would produce an additional $2 million to $2.5 million a year in revenue for the hospital.
“Right now that would cover at least one-twelfth of our annual problem. Yes, it would be a nice benefit for us,” he said. “I’d rather get 30% of something than 100% of nothing.”
When Studley shared the hospital’s plan last week with city and county officials, it drew a mixed response. The reaction of hospital employees, though, has been largely positive, according to Studley. He said they gave it an average score of 4.8 on a five-point scale in an anonymous survey.
“They get it. They understand it,” he said.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
