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Southwest Washington Medical Center was a stand-alone 422-bed acute care facility located in Vancouver, Washington, which merged with PeaceHealth, a large multi-state healthcare system, to become PeaceHealth Southwest Medical Center. The GE Healthcare Camden Group team guided the identification and implementation of recommendations for improvement in Non-Labor expense reduction.

Background

In early 2010, Southwest Washington Medical Center (SWMC) realized the need for immediate financial improvement due to changing market conditions and the increase in charity care and bad debt due to the downturn in the economy. In addition to initiating a hospital-wide financial improvement effort with targeted improvements in reimbursement, labor and productivity, and non-labor costs, hospital executives opened up merger discussions with PeaceHealth, a large multi-state health care system serving the northwest states of Washington, Oregon, and Alaska. Executives ultimately decided that PeaceHealth represented a good cultural fit for their organization, and in early 2011, they became PeaceHealth Southwest Medical Center.

Our Approach

PHSW created several Operational Excellence Improvement Teams (OEITs) to lead the financial improvement efforts, and our team was engaged to lead the Non-Labor OEIT efforts and the $14M savings target. While this was a hospital-wide effort, a majority of the focus was on clinical supplies, contracted services, and physician contracting. GE Healthcare Camden Group provided teams of subject matter experts in each of these three areas and developed a team structure focused on expanding the list of previously identified opportunities by PHSW and expediting the implementation of these opportunities.

Results

Throughout the course of the project, the teams identified over $16.2M in savings and, as of the writing of this document, had implemented just over $14M of the identified opportunities. While some of the savings came as a result of the conversion to PeaceHealth contracts, a majority of the dollars were captured through local contracting efforts and innovative savings strategies for complex expense categories like orthopedic and cardiovascular implantable devices, supply and instrument inventory, distribution, physician contracting fees, and asset lifecycle management. In addition to the financial benefits of the project, PHSW’s familiarity with the methodology used throughout the project has positioned them very well for continued success with non-labor savings efforts in the future.

  • Implemented $14M of Identified Opportunities
    The team identified over $16.2 million in savings and implemented just over $14 million of the identified opportunities.
  • Action Plans
    Developed detailed implementation action plans to enhance systen efficiency and achieve cost savings.
  • Accountability
    Ensured buy-in and consensus in efficiency plan development to foster ownership and accountability during implementation.

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