Alverno Clinical Laboratories: Cheryl Vance, CEO

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Alverno Clinical Laboratories LLC is a Hammond, Indiana-based integrated lab that serves three Catholic healthcare organizations: Resurrection Health Care (Chicago, Illinois), Provena Health (Illinois) and the Sisters of St. Francis Health Services (Indiana).

Alverno Laboratories is composed of 27 hospitals, as well as a central laboratory which functions as the core lab. In terms of revenue and staff, the laboratory network has 1,600 laboratorians, and will conduct approximately 10 million billed tests in 2008, which will generate about 125 million dollars in projected net revenues.

A Young and Eager Organization

Alverno Clinical Labs is a relatively new organization, formed in 2005 by Provena Health and the Sisters of Saint Francis Health Services. Cheryl Vance has been Alverno’s CEO since the company’s inception. With respect to the company’s progress, Vance explains that, “[w]e’ve been very successful in accomplishing what was asked of us as the organizations came together. One of our unexpected opportunities was Resurrection joining our laboratory system in late 2007. So we’ve done well for our organizations. They are pleased with both the quality and the financial outcome, which is a good place to be.”

Focusing on the future, Alverno Laboratories has recently implemented a strategic five-year plan that summarizes the company’s goals and core values. “A lot of our focus right now is on building a culture for the new organization and transforming our culture so that this is an organization that people like to work for. So, many of our initiatives are focused on that cultural transformation.”

A Chief Executive Experienced in Integration

Vance spent the first half of her career with commercial labs and came to the Chicago area in 1991 to work with a hospital-integrated laboratory that was an early integrated laboratory formed between two hospitals. Next, she moved to an 8-hospital organization that was integrating their laboratory in Chicago. From there, Vance went to Provena Health, the legacy organization that formed Alverno. “The last half of my career has been spent moving hospital sites into an integrated lab model. I’ve had a fair amount of experience and, based on what didn’t work in the past, I understand how we can do it more effectively. My leadership team also has hospital-based, outreach-based, and integrated lab experience, so they also bring these best practice models to the organization.”

Core Values Create a Strong Foundation for Growth

Like many health care systems, Alverno has chosen certain key values as the pillars of their organization. These pillars are service, quality, stewardship, people and growth. “We believe very strongly that, by providing high quality lab services in a cost-effective manner, we can meet our health care organizations’ objectives. “In terms of our cultural transformation, in supporting those pillars, we believe very strongly that our employees and leadership need education and training so that they have the tools to manage their sites in this rapidly changing environment.” Vance also noted that many of these initiatives involve focusing on communication, training and education.

Alverno’s new initiatives also look to align employees together to foster better communication and teamwork. Monthly meetings are held so that site leaders from each laboratory can come together and share ideas at the central laboratory. “Part of the reason for these meetings is education, and part of it is communication. Our site leaders and our leaders at the central lab find this to be very helpful.”

Late in 2007, Alverno began to build up its quality department. “We have three directors of quality who support all 28 sites in training and education. They are responsible for leading projects at our hospitals, as well as training and the oversight of our quality tools like PDSA, the Plan-Do-Study-Act method, looking at quality processes and work flow, leading and evaluating out LEAN transformation, helping to document how we function and seeing where we have opportunities to streamline our operations and work more effectively.”

Alverno has also begun an “emerging leader program,” which encourages the promotion and growth of the staff.  In the program, employees must apply and be qualified to step into a site leadership position under clearly defined guidelines. “We take them off the bench and put them through an internship program so that, internally, we are building new leaders to move into our organization when needed.”

Creating Strong Leaders

Another way the company works to improve its leadership is through a management camp, known as Camp Alverno. “On a quarterly basis, all of our supervisors and above are taken off-site for a day of leadership training, so everyone has standard training. It also gives us the opportunity to put people together into peer groups so they can learn from other sites and see how other sites are handling their initiatives and identify best practices.”

“I feel very strongly that we must put the right people in the right place and give them the tools to be successful,” explains Vance. “In health care, I think that our very best clinicians are moved up to a supervisor or a director position, and then we don’t give them the tools to really be effective leaders. We need to give them these tools so that they can be effective in our organization” To demonstrate how effective the company is in meeting its goals, Alverno has put together an organization-wide scorecard that is presented to the board of directors. “On the scorecard, there are goals and objectives for each site which align with our pillars. So we have goals for quality, for service, etc.”

Focused on Flexibility

A key to Alverno’s efficient success is the organization’s flexibility. “We need to be nimble and respond to the environment quickly.” Vance says that although it is important to stay on the path outlined in their strategic plan, it is also critical to have the ability to seize opportunities as they arrive. “Things are happening in health care more quickly now than they ever have in the past…[so] we also need to move quickly to take advantage of marketplace opportunities that come up. An example of that was Resurrection Health joining our organization. When Resurrection joined the laboratory system, Alverno wasn’t actively seeking another health care system to partner with.  But after Resurrection approached them, Alverno was able to sign a contract with the health system within months of the initial contact. “We began integrating testing in May and by September have integrated most of the clinical testing and most of the microbiology. We have to have processes and people that can move rapidly to meet those marketplace demands.”

Investments In The Future

Alverno is also looking to the future and is making capital investments in several areas. First, seeing a need to replace equipment platforms, the company chose to standardize these platforms for all 28 sites.  Next, the central lab was upgraded to respond to an increase in test volume. “Our parent organizations invested in a dual automated line in the central lab. We not only installed that equipment, but we also had to change work flow processes in order to maximize the use of that equipment and build that infrastructure.”

In terms of other technological advancements, Alverno has had to address the issue of how to integrate data while continually adding on new hospitals. Because the labs receive many foreign bar codes, the lab system made the decision to not make all hospitals change to one laboratory information system, “We move data back and forth through interface engines, so that’s one of the reasons we are able to do the integration [of new hospitals] so quickly.” Vance added that, as there continue to be more and more esoteric tests, particularly in genetics and genomics available on the marketplace, Alverno has a molecular laboratory and a research and development committee. “We have timelines in order to bring new projects up every quarter, so we are keeping up with what our clinicians want from new testing availability, and we are bringing these in-house as it makes economic and service sense.”

Quality Equals Growth for Alverno

Vance credits the quality processes and programs for much of its success. “I think it’s a huge edge. If you are not putting out fires all the time, you can really focus on growth and your strategic initiatives. When you have issues with quality, such as lost specimens, clinicians who don’t believe the clinical results, or sites that have concerns about quality or service, then you’re focusing internally on resolving those issues – so you really can’t focus on the needs of the customer.”

Emphasizing the need for quality, Vance explains that this priority applies not only to the labs and tests, but to the organization’s business information as well. “You need really good data in order to manage your business. As an organization, we’ve got a finance group that really understands the data and that helps us to understand our business. It allows us to understand our cost structure, service and quality initiatives so that we can identify best practices within the 28 sites and move them throughout the organization. That’s been the key to our ability to move quickly.”

Additionally, Alverno is set up independently from the hospitals it serves. This benefits the organization because, as Vance explains, Alverno has remained independent from much of the stress of hospital politics. “We have our own board of directors that I report to. We have the confidence of our owners and accountability. As a result, we can move forward and make decisions and manage our business. A lot of the politics that might be inherent in the expansion or the management of our business isn’t there – so we have that support.”

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