Michael F. Collins is the new CEO at MVH. He's not a stranger to the area, being the head beancounter at Emerson in Concord, MA. Considering he is coming from a system that pulled a net of $5M, from a gross of $384M (translates to 1.3%), and going into a hospital with a -$87k (-0.1% return) net, everyone hopes some of that will rub off.
Let's hope that he avoids the predictable, short-term cost-cutting measures: Staff reductions. It's easy to say, "Cut 10% across the board." But reality starts to sink in. Housekeeping cleans the same amount of square footage in halls and other public areas no matter if the census is full, or only one patient. Security patrols the same buildings, empty or full. And, as another example, the health centers here may have an increased utilization during the same period--should we short staff/shorten hours? It would seem to have an even more negative effect on returns.
But, consider this: Back when I was hiring (Yeah, I know, a tell....), replacing any employee was at a minimum cost of $2-5 thousand. Now, with all the OSHA, state, and JCAHO requirements, the recruiting fees, advertising, bonuses, relocation, orientation, and such, it's far, far more. Cuts might help this quarter, what about next??
My drive would be to increase the gross, and take a smart look at the overhead. Keep the staff you have, with certain exceptions. Switch from quarterly goals to a longer view. Take a closer look at CPT codes, justifications, and repeat mistakes. "I don't have time to do it right" is not an excuse, it's a reason to leave.
Why do I post advise? Because if they follow it, it will change Essent. If they don't, well, there's always, "I told you so....."
Let's hope that he avoids the predictable, short-term cost-cutting measures: Staff reductions. It's easy to say, "Cut 10% across the board." But reality starts to sink in. Housekeeping cleans the same amount of square footage in halls and other public areas no matter if the census is full, or only one patient. Security patrols the same buildings, empty or full. And, as another example, the health centers here may have an increased utilization during the same period--should we short staff/shorten hours? It would seem to have an even more negative effect on returns.
But, consider this: Back when I was hiring (Yeah, I know, a tell....), replacing any employee was at a minimum cost of $2-5 thousand. Now, with all the OSHA, state, and JCAHO requirements, the recruiting fees, advertising, bonuses, relocation, orientation, and such, it's far, far more. Cuts might help this quarter, what about next??
My drive would be to increase the gross, and take a smart look at the overhead. Keep the staff you have, with certain exceptions. Switch from quarterly goals to a longer view. Take a closer look at CPT codes, justifications, and repeat mistakes. "I don't have time to do it right" is not an excuse, it's a reason to leave.
Why do I post advise? Because if they follow it, it will change Essent. If they don't, well, there's always, "I told you so....."
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