The Key to JCH’s Financial Success: Communication

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Jon-Wade-thumbWhen Jon Wade began his tenure as chief executive officer of Jersey Community Hospital in Jerseyville, Ill., on Aug. 5, 2013, he was tasked with one overarching priority: turn the organization around financially.

The hospital board told him, in no uncertain terms, that they wanted to see a definitive margin from core operations.

At the end of October 2014, after one year as CEO, the board gave Wade his evaluation, and it was overwhelmingly positive. JCH has had a $2.5 million financial upswing in the last year, one that has been holding steady for the past eight months.

Wade’s key to success, however, didn’t revolve around clever revenue initiatives or trendy think-tank strategies.

Most of what Wade did was simple leadership, such as becoming involved with the hospital’s agenda and messaging; restructuring and overhauling departments; and closing and expanding services.

However, what was core to each of these initiatives, he said, was something JCH lacked when he arrived: communication.

Restoring urgency and transparency

As an outsider, Wade noticed immediately that there was an acute lack of urgency about JCH’s financial situation.

“I could see it pretty quickly that we weren’t communicating as an organization thoroughly, consistently, and we were off-message quite a bit,” he said.

For example, Wade would talk with the personnel in different departments and ask questions about metrics. Most of them didn’t know what their department’s metrics were.

He eventually discovered that the administrative culture of the hospital had been traditionally closed. Information was doled out on a need-to-know basis. However, he believed that information through communication empowered clinicians and their staffs to succeed.

With the board’s blessing, he began to instigate communication, beginning with his leadership team.

Before he arrived, the leadership team would meet weekly, Wade said, but these meetings were structured in a way that limited open feedback from the team. There was no agenda, and they weren’t really asked to participate in establishing strategy.

Wade said he changed this approach, immediately revealing to them that the hospital would be unable to make payroll in eight months. While this news was troubling, what he said next shocked them.

“What should we do about this?” Wade asked the team. “What would you suggest?”

“It took a little while for them to adjust to me asking for their input,” he said. “Then, things started surfacing and bubbling up.”

The first step he took was to hire a new controller and chief financial officer, both of whom were tasked with restructuring JCH’s financial practices.

His next steps were even more controversial. He closed labor and delivery and abandoned JCH’s physician compensation model.

“They were all on a flat-salary model and not that productive,” he said. “It was death by a thousand cuts for us. Now we’re hiring on more of a productive basis, which is more typical of what you would see today.”

Finally, he re-focused on wellness. Fifteen years ago, the hospital had built a wellness center that truly reflected the progressive ideas of JCH leaders at the time. With over 1,000 members, it was a bright spot in JCH’s dire revenue cycle. Through an expanded wellness program for employees, Wade was able to realize an additional $800,000 in lowered health insurance costs from the previous year.

Receiving feedback from unusual sources

Wade and his team expected pushback, and they did receive it. Initially.

But feedback from the least likely sources confirmed in his mind that JCH’s leadership team was making the right decisions.

“I sent out a survey in the pay stubs to try to make it anonymous,” he said. “I had been here a couple of months at the time, and I got some feedback that to me was very enlightening. It was from housekeepers, couriers, people that you would not really expect to have strategic insights into our issues.

“They knew everything I did. That’s when I was more emboldened.”

Most people, regardless of their role in an organization, know what’s happening in their guts, Wade said. They know what needs to be fixed.

After labor and delivery closed, Wade said the employees began to open up and tell him they knew it wasn’t wise to keep it open. The department simply wasn’t busy enough.

This was the type of communication JCH needed, but had lacked just a few months prior.

Remaining independent and financially stable

Now that JCH has found financial stability, Wade and his team are looking to distinguish themselves further as a primary-care organization. Currently, JCH is in the early stages of purchasing a group of 25 primary-care providers.

This provider expansion will enable JCH to develop a new business model centered on primary care, Wade said. He wants this model to be different from the market standard, where decisions tend to focus on what’s best for the highest-paid specialist.

Wade envisions a model that is focused on the holistic needs of the patient, one that realizes patients will receive care from other, non-JCH providers. Instead of leading to a fragmented care team, however, JCH will help coordinate care on the patient’s behalf, working as an informed patient advocate.

“It’s going to be exciting,” he said. “I’m looking forward to that. The primary-care docs are anxious to begin advocating for patients, and we want to build an infrastructure around them.”

In talking with fellow healthcare leaders at small hospitals like JCH, Wade said two words frequently are woven throughout the conversations: selling and merging.

“I’ve always felt that it wasn’t necessary,” he said. “I’ve seen the good and bad of systems.”

As JCH has shown, the answer to a floundering independent hospital doesn’t have to be a buy-out or a bail-out. What the executives in the larger system are going to do, he said, is make the hard decisions that you think you’re incapable of making on your own.

“So you just need the courage and the backing to do the things that need to be done,” Wade said. “It takes courage.”

-by Pete Fernbaugh

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