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LBJ 3rd Qtr report promises aggressive changes to reduce costs, streamline services

LBJ Medical Center’s new board of directors and administrative team have promised changes to the current “grim” financial situation and will be aggressively seeking new funds for the government owned hospital, according to LBJ’s third quarter performance report for fiscal year 2013, covering the period of Apr. 1 - Jun. 30.


The hospital has been faced with financial woes over the years and based on the 3rd quarter report, things have not changed much as the new board is faced with outstanding debts and other unresolved issues. (See last Thursday’s edition for part-one of the performance report)


“The financial situation of the medical center is grim,” according to the report submitted Aug. 23 by hospital CEO, Joseph Davis-Fleming. The report points out the ASG annual subsidy falls far short of covering increased patient service needs and hospital operational costs.


It says expense reductions which began last December were projected to total about $3.8 million by the end of fiscal year FY 2013, and included freezing 71 vacant positions, which were mostly physicians, nurses and clinical support staff; freezing annual staff raises — which was done February this year, eliminate capital equipment purchases, eliminate minor equipment purchases, eliminate travel and training, reduce inventories and supply expenses — including the purchase of drugs for the pharmacy.


“But as a result of these measures, the hospital  is severely short-staffed resulting in significant increases in overtime paid in excess of $1.2 million to date, reoccurring equipment failure in radiology and lab and long delays for patients waiting for services, resulting in an overcrowded Emergency Room,” the report says.


“With reductions in federal funds, ASG subsidies and the chronic financial hardships the hospital finds itself under every year, the board and new CEO have undertaken actions in an effort to get the hospital out of debt by re-organizing a more streamlined and cost-effective operations system at the hospital and to develop a more financially sustainable hospital system for the future,” it says.


Phase one of the re-organization, is that all vice president positions created two years ago are proposed to be eliminated, to be replaced by previously defined director-level positions at the affected divisions.


The impacted employees who served as vice presidents have the option of applying for the newly defined director positions at grade levels comparable to similar positions across the government.


“The board feels very confident that in moving forward, the re-organization will save more money for the hospital and improve patient care services in the long term,” the report says.


According to the report, the hiring of the newly defined management positions will also be open, competitive and fair in an effort to “re-establish a culture of transparency and accountability in implementing personnel hiring policies the right way”.


Additionally, the Care Management program created in the last months of the previous administration will be eliminated and the two nurses who were assigned to this program will be given the option to fill more critical needs in other clinics.


“The CEO has a plan to re-design a more cost-effective hospital program as part of re-allocating functions among the divisions,” it says. “Since the new CEO and CFO team have taken over the helm at the hospital, they have identified numerous long-standing chronic systems problems that must and will be changed as part of streamlining operations for cost controls.”


The board will also continue to seek ways to modify hospital policies that have created unjustifiable costs, including unfunded mandates at the hospital — e.g. 15-20% automatic salary increases for doctors on contract and automatic 5% salary increment increases for career staff, both of which have been abolished by the board.


In closing the report promises that the board and new hospital administrative team will “aggressively pursue new funding opportunities to help support renovation and replacement of very old, failing facilities and equipment, staff hiring and training, expansion of high demand services like Dialysis and other chronic disease management services, and information systems upgrades to resolve many federal government certification violations, especially focused on patient care, safety & quality.”