Hospitals

Reform (and a petite filet crackdown) help Cleveland’s MetroHealth System get healthier

Cleveland’s primary charity hospital has gone from red ink to a razor-thin profit margin, thanks in part to smarter (and tougher) policies, as well as smart use of consultants.

CLEVELAND, Ohio — Cleveland’s primary charity hospital has gone from red ink to a razor-thin profit margin, which the Cleveland Plain Dealer credits to smarter (and tougher) policies, as well as smart use of consultants.

MetroHealth Medical Center lost $10.5 million from January to May of 2008. But for that period this year, the hospital has made $1.5 million.

In another good sign – recession considered — revenues rose (pdf) over that period: $275.8 million in 2008 to $284.2 million this year. Expenses also dropped: $286 million from January to May of last year, now  $282.7 million.

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MetroHealth has mixed a policy of reform with consistent cutbacks in the last two years — topped off most recently with a reorganization that trimmed 6 percent of the system’s workforce. Since Chief Executive Mark Moran took over at the hospital, the system also has stopped providing free care to patients from outside of Cuyahoga County, which provides a subsidy for the system.

In addition, MetroHealth embraced the popular health-care trend of pushing primary care-seeking patients out of the emergency room, readjusted its fee schedules for other patients, making a deal with the county to see more paying patients, and working to sign up more poor patients for federal aid.

The Plain Dealer said hospital officials informed employees about the revenues through a series of summer town-hall meetings. But the articles also let the health system address the use of consultants from Moran’s former employer, Booz Allen Hamilton, which also has been a source of new executive talent.

Employees at the hospital have had mixed feelings about the layoffs and reforms at the hospital, but many are extremely cynical about $12 million in fees and salaries paid to Booz, and The Plain Dealer has reviewed consultant expenses down to the room service costs.

“It’s so challenging to try to move an organization forward when we’re talking about a $25 petite filet,” former Booz consultant and now MetroHealth Chief Financial Officer Sharon Dougherty told the paper.

Dougherty, who has an apartment in Cleveland but commutes from Virginia, now eats her travel expenses.

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