How a rural, independent hospital can survive

Meadows Regional Medical Center in Vidalia, Georgia, serves a “very rural” area, according to president and CEO Alan Kent, DHA, just the kind of facility that has often been scooped up by larger systems in recent years. Staying independent meant the hospital needed to drive through a series of management-led initiatives on quality, patient growth and staffing levels.

The rural setting can be both “a blessing and a curse,” Kent said during his presentation at the American College of Healthcare Executives (ACHE) Congress in Chicago. The 57-bed hospital is considered the go-to facility for oncology and maternity care in the region, participates in an accountable care organization, has a provider-sponsored health plan and often receives the indigent care from five critical access hospitals within a 30-mile radius.

But it also faced challenges from serving a lower share of commercially-insured patients (around 24 to 30 percent, according to Kent), expansions from for-profit chains HCA and Community Health Systems and a $12.9 million Department of Justice settlement all combining to put its independent status in peril.

“It’s not the final stake in the ground that says we’re going to be independent until we die, but we like being in charge of our own mission,” Kent said. “We may have some partnerships down the line. We’re talking about a couple of joint ventures but we have to be strong no matter what.”

Building up that strength would require a multi-step turnaround initiative. Kent said it was important to break down departmental silos and get managers engaged in the work by having executives set targets for how many changes should be made, but then leaving it to managers as to how to reach those goals.

The first 100-day project focused on reducing waste. Managers decided to start on the small things first, Kent said, which could be simple efficiencies like how patients and staff move around the hospital. It targeted $1.6 million in savings and managers’ plans would have resulted in more than $2.9 million by their original estimates. In the end, the hospital validated savings of $1.8 million, beating its initial target.

After the first project, even the skeptical managers began getting more engaged.

“As this moves along, you really see some good impact from peer pressure and you really see some good impact from expectations being raised,” Kent said. “People start to get the idea that I can’t be a non-player here.”

The second phase, focused on reducing barriers for patient volume, was similarly successful. Managers had to start working together to address the time wasted between departments or when dealing with outpatient locations within the system which are used to their own processes. The result, Kent said, was a total of 407 efficiency plans implemented with validated savings of $1.7 million.

The third phase, however, garnered more resistance as the hospital turned its attention to what staffing levels were really necessary. Managers “panicked,” Kent said, assuming executives were pushing for layoffs or eliminating vacant positions. They did find areas to make cuts, such as scaling back by one full-time-equivalent MRI tech, but Kent said they found understaffing as often as overstaffing.

The human component made managers initially resistant to any changes, but by providing everyone with data on the ideal staffing in the system, they eventually came around and started making suggestions on where to make operations and processes could be made more efficient. This project did fall short of its goals, however, achieving only $1.1 million of $1.6 million in expected savings.

Kent considered the initiatives as a whole to be successful. For hospitals in similar situations, he recommended sticking to own key principle in designing their own turnaround plans: get everyone to participate.

“People in healthcare need to realize that change is not optional. You have to change to survive,” Kent said.