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September 07 Businessexcellence 55 CEO Michael Young tells Jenn Monroe how standard operating procedures have resuscitated Erie County Medical Center Erie County Medical Center Standards of health

Businessexcellence September 07 56 Among all of its strengths, Erie County Medical Center has long been known as a quality trauma center, providing excellent care for residents of Western New York. However, at the end of 2004 ECMC found itself in a financial emergency; it had lost $28 million, and was projecting a $39 million loss for 2005. To repair its critical financial condition, ECMC brought in CEO Michael Young and changed from a county-owned facility to a public benefit corporation (PCB). In a PCB, which is unique to New York State, ECMC is part 501C3 and part government-owned. “We are exactly half way in between,” Young explained. “The board of directors is independent and has full authority—that’s the 501C3—yet they are appointed by elected officials.” The demise of ECMC would have had a tremendous impact on the residents of Erie County. Not only is it the only trauma center within 60 miles, it also is a teaching hospital (the majority of its staff are faculty members), the only regional hospital with specialty clinics, and “the hospital of last resort,” which means it will take care of anyone, whether or not they can pay. Additionally, the ECMC includes a 636-bed nursing home facility. Change came quickly under Young’s leadership, with ECMC losing only $16 million in 2005, not the projected $39 million, and showing a more than $7 million profit for 2006. Currently, revenue is up more than 11 percent from last year. What has made the difference? “Standard operating procedures,” Young said. Everything from billing and hours of operation, to productivity and scheduling, was examined and improved procedures put into place. “The normal business practices you would expect at any other health care facility,” he continued. “These were never looked at because it was run as a county department. “A strong hospital in America has labor cost at 45 percent of revenue,” he continued. “We were at 65 percent. We have to be more efficient, much more efficient, than the average hospital, so we look to productivity. We look for every opportunity to substitute capital for labor because each unit of labor is so expensive.” One key area of improvement was information technology. When Young arrived in January 2005, he found ECMC bogged down by old hardware and software. “We put 50 new computers in the business office and went from processing $400,000 in billing a day to $900,000.” Part of this success comes from ECMC’s partnership with Accumedic Computer Systems which provides a “scrubber” software program to make patient billing and collections more efficient. In terms of daily patient care, ECMC now has software that allows nurses to automatically chart blood pressures, saving up to 30 minutes for each nurse each day. “We have really good nursing and IT departments and they worked together to be collaborative there,” Young noted. For most medical centers, the emergency room and the operating room serve as both the highest revenue generators and the largest cost centers. This is true at ECMC and Young turned his attention to both. In 2005 the emergency room was on divert 85 percent of the time, forcing patients to other hospitals; today, with help from new systems, the rate moves only between zero and 10 percent, even when at its busiest. In June, ECMC took in 233 traumas, the highest in its history. It was also recently cited for having the best trauma outcomes when compared to 35 of the largest hospitals in New York State. In the OR, ECMC now uses a tool called Perioptimum, which improves case management outcomes and has resulted in a 25 percent revenue boost in the past year, while reducing patient pre-admissions costs. “We’ve increased OR throughput,” Young said, “and used the software to measure where breakdowns were. We have a two-thirds better turnaround.” These efficiencies are allowing ECMC to take on more surgical cases without increasing staff. “Doctors come here because they know cases are going to get turned around,” Young continued. “We’ve increased our OR cases by 1000 a year and are doing it with the same staffing; that’s $10 million to the bottom line.” Now that it has regained its financial health, ECMC is ready for its next big venture—a $92 million heart and vascular care center. ECMC has also already taken a big step toward providing complete heart care with the reopening of its expanded, state-of-the-art digital cardiac catheterization laboratory suite in May. “A free standing hospital focused on what it does increases the quality of patient care exponentially,” said Young. “The people working there will be there because they want to work with that type