GVH outlines improvement plan to county commissioners

“Everything is on the table”

The Gunnison Valley Health board of trustees and GVH executive staff met with county commissioners, just one week after announcing the resignation of former CEO Randy Phelps. The move was one in a series of changes designed to stop a downward slide in GVH financials—the hospital in particular is already operating at a net loss of more than $600,000 this year.
The management team has already implemented short term measures to reduce spending, but on Tuesday GVH representatives reassured commissioners that there is a detailed improvement plan being implemented under the guidance of interim CEO Scott Landrum.
“We want to look for opportunities to reorganize and reduce costs. We felt as a board that we needed professional advice on what to do at this stage,” said board chairman Dr. Bob Brickman. “We’ve been operating in the same manner for a long time and that has caused us to be in this severe situation.”
The financial problems were not discovered earlier, Brickman explained, because of a lag time in financial reports—the board reviewed December financials in February. It wasn’t until the March board meeting that the downward trend became evident.
“After that board meeting a lot of things were undertaken for management to come up with a plan to turn that around,” Brickman said. “We put dates on it, put responsibility on it, and put accountability on it so that specific individuals would be responsible for specific parts of the plan.”
GVH is contracting with Quorum Health Resources, a hospital and health system management firm that employs interim CEO Landrum, to take a close look at every aspect of the health system. As part of that process, GVH has already outlined a 90-day plan that seeks to meet three key goals: reduce expenses and reengineer hospital processes; engage employees in the improvement process; and grow hospital business.
The group plans to bring business development ideas to their next quarterly update, but clearly outlined the motivations for the first two goals.
“One of the problems we have is the cycle of revenue capture,” Brickman said. “It is one of our major problems that we can’t produce a bill in a timely fashion and collect the money.”
In addition, they plan to review the cost of paying local healthcare professionals to be on call in the ER—an expense that has roughly doubled in the last five years—and examine other internal processes for efficiencies.
One key component in making changes will be staff involvement. Employees at all levels have already been asked to make several financial concessions as part of the GVH management team’s plan to reduce operating costs immediately. Among those concessions, wage increases have been rolled back and changes to 401k policies will reduce employer contributions. But Landrum pointed out that staff also need to be brought into the fold with better communication so they can be part of the hospital’s success.
“It’s become very obvious in meeting with employees that they’ve needed some attention,” said Landrum. “One of the things we’re going to be doing is setting up an employee council… to let them have a voice in what’s going on in the hospital.”
What’s not yet clear is whether changes will include layoffs. Landrum said that it’s important to disrupt people’s lives as little as possible, but the ultimate goal—echoed by the board and executive team members—is to keep delivering excellent care as efficiently as possible. In Brickman’s words, “Everything is on the table.”
The full plan will become clear over the next 90 days. In the meantime, chief marketing and business development officer Michelle Campbell clarified some misperceptions within the community. Recent hospital expansions are not the root of the hospital’s financial difficulties.
“One of the questions we’ve been getting is, are the financial situations at the hospital being derived from the fact that we expanded the building and put in a new outpatient facility… Those are the areas that are ahead of plan,” Campbell said. “Most health systems are moving rapidly to get as much of their operation in the outpatient arena as they can. The [preferred] ratio is now around 40 percent be in patient and 60 percent out patient.”
The fact that GVH’s outpatient facilities are already performing ahead of plan bodes well for the future—it’s one light in the tunnel, she said. And Landrum emphasized that from an outside perspective, GVH is a quality hospital hit by the perfect storm of a lack of information and low volume due to a low snow year.
“What we want to do more than anything else is maintain high quality because [GVH is] already one of the top 100 critical hospitals in the country,” Landrum said. “There’s no reason why we can’t continue that and be more efficient.”