Traveling Down a New Road

Our transformation will take time, but we’re fully engaged on adjusting to new realities in health care

When you’re heading out to experience something new—a recently opened store, a friend’s new house or a vacation destination—how do you prepare? You probably study a road map (or an electronic navigation system) so you’ll arrive safe and sound.

At Lehigh Valley Hospital and Health Network, we’re navigating our own new course. We’re adjusting to changes in government reimbursement that impact our net margin—the amount we reinvest in programs and services for our community.

In the past, some of our journeys, such as last year’s Turn-Around Team, have been measured in 60- or 90-day increments. This new journey will take longer as we find the right balance of providing high-quality care most efficiently.

Here’s where we stand in the early steps of our journey. Through February, we continue to be busier than ever; we’re caring for 12.2 percent more patients who require beds than at this point last year. But decreasing reimbursements continue to affect our margin; we are $22 million short of where we expect to be. We are committed to retaining as healthy a margin as possible for Fiscal Year ’08 while planning to make future fiscal years better.

Your help has given us plenty of momentum. You’ve looked at ways to do things more efficiently in your department, and it shows. Our overall expenses network-wide are below budget. Also, some areas of our health network—including Home Health Services and Health Network Laboratories—are each about $2.5 million above their anticipated margins so far this year.

The interventions we’ve made to help the Fiscal Year ’08 budget are working. We’ve identified $20 million in cost savings and revenue enhancements. About 25 percent comes from wage savings, another 25 percent from reduced spending for services and supplies, and the remaining amount from revenue increases due to improved documentation and coding.

One example: During construction at LVH–Cedar Crest, the number of cars parked increased from 70 to 1,600 per day, so we added more valets and shuttle drivers accordingly. Now that our parking decks are complete, our valets park about 300 cars a day. As a result, we don’t need the same number of valets and shuttle drivers. All affected colleagues are working with human resources to explore other opportunities in our network wherever possible.

Senior management continues to be fully engaged in our journey, meeting every week to plan our course. Just some of the items we’re reviewing: caring for more patients in areas that can accommodate them and appropriately classifying patients based on the type of care needed (acute admission, for which we get reimbursed a set amount, or observation or overnight ambulatory, for which we typically are reimbursed far less).

We also need your help in maintaining appropriate length of stay. We did this successfully while delivering high-quality patient care through last year’s Turn-Around Team, but those length-of-stay numbers have increased by 0.4 recently. While that may not seem like much, consider that 0.1-of-a-day reduction in length of stay means we can care for 800 more inpatients at LVH–Cedar Crest and 200 more at LVH–Muhlenberg.

Soon we will all play a role in working smarter—not harder—through the System in Partnering for Performance Improvement (SPPI). You’ve heard a lot about it—and we’re refining it to make sure that when it starts, it will give us a long-term commitment to becoming one of the nation’s most efficient health networks.

Your commitment and determination to helping us on our journey is invaluable. Together, we will successfully navigate our new course and create a better hospital for our patients and our community.

Stuart Paxton
Chief Operating Officer

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