Situation
The hospital, one of 12 Clarian Health Partners & Affiliates, was seeing steadily declining margins, limiting its ability to keep up with rapid changes and seize new opportunities.
Reasons
A cumbersome financial management system was making it almost impossible to access, aggregate, analyze, and share detailed data to support decision-making. Inefficiencies and redundancies strained limited staff resources, drained operating funds, allowed problems to go undetected, and impeded leadership’s ability to set long-term goals.
What they needed
A way to manage, monitor, and report on daily operations, so that productivity could be improved, performance expectations met, and long-range financial goals set.
What we provided
A financial and operational decision-support service suite that helps senior-level executives, division heads, and managers improve and sustain effectiveness, generate better bottom-line results, and align daily operations with strategic goals.
Some of the results Performance improvement—Better financial management has led to dramatic bottom-line improvement. In less than four years, annual operating margin climbed from near break even to 8.3 percent. The hospital now has flexibility to take on more risks for enhancing revenue, expanding existing services and facilities, adding new product lines.
Modeling and forecasting—Now trend current performance against historical data, project what can be expected in future for reimbursement and inflation rates, overlay with impact of adding new services—not just on operating margin, but also what cash-in-hand looks like, do they have to add debt to the mix, if so, how much—and develop very specific long-range plan.
Faster budgeting—Budget workflow is accelerated 50 percent—from three months to six weeks. Also allows budgeting process to start later—from May 1st to July 1st—so there is more robust data to work with.
Measuring productivity—In a matter of seconds, managers can combine pay-period information—down to the employee and pay code level—with each department’s unique volume statistics; display the data in a graph or compile a report; and evaluate where they stand on staffing efficiency.
Sharing information—Year-to-year capital budgeting process now streamlined. Managers only fill out capital item request form once. With a simple click, all the information can be automatically re-entered and re-submitted the following year.
La Porte Regional Health System is a 227-bed facility located 60 miles east of Chicago, serving counties in northwest Indiana and south Michigan. Installed INSIGHTS® software and service solution in mid-November 2004. Current number of users: 89
Feedback “We’ve gone from nearly break-even to an 8.3 percent operating margin…you don’t get results like that unless people are managing differently. I believe INSIGHTS gives our managers access to the information and functional capabilities they need to do that.”
Mark Rafalski
Vice President of Finance & CFO
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