No rational business person expects to find a silver bullet that can, by itself, slay a hydra-headed dragon of problems, from deficits to wage inequities to below-par technology. The trick is to identify problems, design solutions, and dig in for the long haul.
That is what Lifespan, a partnership of five Rhode Island hospitals with a total of 11,700 employees, has been doing in the past decade, and the improvements are showing now across the board: in profit, staff morale, patient service and professional reputation.
For that achievement, Lifespan is the winner of the 2007 Business Excellence Award for a company with 100 or more employees.
Lifespan is Rhode Island’s largest private employer and also the state’s largest health care system, made up of Rhode Island Hospital, Hasbro Children’s Hospital, The Miriam Hospital, Bradley Hospital and Newport Hospital.
When President and CEO George A. Vecchione came to Lifespan in 1998 from New York-Presbyterian Hospital, the hospitals faced “harrowing” problems, he said; in fiscal year 1998, it lost a combined $50.2 million on operations.
But Vecchione said he saw the potential for the Lifespan-owned hospitals to become a “regionally competitive and nationally recognized academic health enterprise,” bolstered by a close relationship with Brown University’s Medical School.
“I saw a huge potential here if we could stabilize the hospitals,” Vecchione said. And indeed, eight years later, fiscal year 2006 brought a $43.4 million surplus on operations; it was the fourth year in a row of surpluses.
“The financial turnaround that Lifespan has made is nothing short of fantastic,” said James E. Purcell, president and CEO of Blue Cross & Blue Shield of Rhode Island.
The turnaround started with greater efficiencies in expenditures, Vecchione said. But he acknowledged, “You can’t solve the problems on expense lines alone,” so Lifespan created a revenue review process to make sure that the hospitals were promptly billing and collecting payments.
Another early endeavor was to raise wages, particularly at Rhode Island Hospital. “We had fallen behind the market, and we needed to correct it,” Vecchione said. The improvements in pay scales led to discernible improvement in employee morale, he said.
Leadership was another route toward improvements at Lifespan. Every year, CEOs and other senior managers at Lifespan hospitals are given performance objectives, but they have a lot of latitude in how they will achieve the goals.
Also, in working on their goals, hospitals pass around to other partners the lessons they have learned. For instance, Miriam had achieved Magnet hospital designation, and it helped Newport Hospital work toward that goal. Newport Hospital piloted a Picture Archive Communications System, and after that technology was established there, it was taken to Miriam and Rhode Island hospitals.
Picking good leaders for partner hospitals also comes with the philosophy that every partner has valuable ideas and insights to spread around.
“We don’t have the notion that the central office knows all the answers to all the questions,” Vecchione said. “The CEOs and their management teams decide how they are going to reach their targets.” He added, “It is amazing what you can pick up and learn from each other.”
In the early years of this decade, “we were correcting things from the ground up,” Vecchione said. “We were making sure that employees were compensated, that physicians were listened to, and we were spending a lot of money on information technology.”
Improvements in information centralization and accessibility for patients means that Lifespan practitioners have available at the nearest PC an electronic record of every encounter a patient has had at any Lifespan institution, including labs and imaging centers, Vecchione said. “If you present at an ER with a problem, the doctor can go to a PC and look up your record, and this results in improved care.”
The update in information technology – a multi-year project that began in the late 1990s – is showing benefits for patient care and for the hospitals in general, Vecchione said. He added, “To the credit of the board, that required a sizeable multi-year investment that was begun at a time when we were losing money.”
One side effect of improve information technology, he said, is a rise in the quality of doctors interested in joining the Lifespan team. “Doctors coming out of medical school and going into residencies want to be at the most technologically advanced places,” Vecchione said.
In July, Dr. Mary Cooper joined Lifespan in a new position, chief quality officer. Cooper, who came from New York-Presbyterian Hospital, said the progress Lifespan has made in recent years influenced her decision to come. “The changes they have been able to make here are extraordinary,” she said.
Purcell, the Blue Cross CEO, speaks in similar terms.
“They have made great strides in consolidating the technology of the hospitals, and that goes a long way in improving the quality of care,” he said. “They have a sense of corporate social responsibility. The organization has done a tremendous job.”
Lifespan is also involved in improving health care in the state as a whole, most notably through the Rhode Island Quality Institute, a nonprofit collaborative that brings together health care providers, insurers and policymakers to work on common concerns. Top-level executives from the different groups meet monthly to hammer away at their challenges.
“The CEOs are at the table,” said Vecchione, who chairs the institute’s board. “No one is allowed to send a substitute.”
One project of the institute, for example, is solving the problem of a high rate of infections that patients contract in intensive-care units. Through the ICU Improvement Collaborative, experts are teaching and publicizing practices for reducing infections.
Laura Adams, president and CEO of the institute, said Lifespan has earned its Business Excellence Award.
“The caliber of people at Lifespan is unparalleled,” she said. “They put their best and brightest on projects that benefit the entire community. They have a sense of what’s in the best interest of patients and families, and they act accordingly.” •
