The Bottom Line: Our Community’s Health

We weathered a challenging year. Now SPPI will help us continue our tradition of meaningful community investments.

Earlier this year, our financial news wasn’t encouraging. A change in government reimbursements meant we risked having a smaller margin than needed. Our margin (the amount remaining after all our bills are paid) is vital because it funds our future, allowing us to reinvest in facilities, programs and technology to benefit the health of our community.

We addressed our fiscal challenges head-on. You found ways to enhance revenue and cut costs. Your efforts helped us identify $23.6 million in interventions. They included reduced spending for services and supplies, improved documentation for proper reimbursement, and some changes in jobs, such as reducing the number of valets at LVH–Cedar Crest now that all our parking decks are complete. Also, some parts of our network—Health Network Labs and Lehigh Valley Home Care—experienced strong years financially.

This all made a difference. We are on track to post a margin of about $40 million (about 3.5 percent of revenue). It’s $25 million less than what we had planned at the start of this fiscal year, but it puts us in a far better position to serve our community than if we had done nothing.

Going forward, we’ll face ongoing pressure to do better. To continue reinvesting, we’ll need to return to our goal of a 5 percent margin, and with nationwide trends showing a 3 percent rise in hospital revenues and a 5 percent rise in expenses, it won’t be easy. Helping us on our journey: the System for Partners in Performance Improvement (SPPI). You’ve heard about it for months; now I ask you to read the details of how it will work.

Each improvement that results from SPPI will be done by the people who know their work the best—you. By embracing continuous improvement, you will give our network the tools and the passion to meet our quality care and financial goals.

By becoming more efficient, we will be able to continue to reinvest in our community as we did this year. We opened our Kasych Family Pavilion and are about to complete a near doubling of capacity in our LVH–Cedar Crest emergency department. We enhanced the Patient-Centered Experience 2016, finding new ways to help patients and visitors navigate our hospitals by using volunteers. You can read about both these initiatives in this edition of CheckUp.

We also remained on the forefront of medical technology, introducing the latest da Vinci S® HDTM Surgical System to treat conditions like cervical and prostate cancers. And we announced an agreement to explore new strategic partnerships with Sacred Heart Hospital that will help both organizations ensure access to quality care for residents of our community.

Separately, these are all great things. Combined, they represent important investments in the health and well-being of our friends and neighbors. By embracing SPPI, you will help us continue this level of reinvestment, so people in our community know they can always count on us when they need us most.

Stuart Paxton
Chief Operating Officer

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