Operational Performance
The annual budget process is a routine opportunity to establish targets and accountability structure to achieve results that serve the mission and vision of the organization. Rolling forecast processes are also a great approach for this purpose. Occasionally, this is not enough. Market dynamics can shift bringing financial stress to the organization. Crane has led efforts both with and without external consulting resources. At OHSU, they implemented two large scale consulting engagements focused on operational improvement. The first program focused on matching labor to demand. They had several mismatches where staff would be available without patients to treat and over the course of the same day, we would have consistent surges with inadequate staffing. Adjustments save money and led to increased quality.
Operating EBIDA Fishbone
The second engagement was a typical large-scale project with revenue cycle, supply chain and labor productivity opportunities implemented to drive multimillions in value. In Salem they did a similar project focused exclusively on revenue cycle. See the 2009 results in Executive Interim Leadership. (link to revenue cycle bullet above). In 2012 they implemented margin improvement based on internal evaluation and execution. In this process they engaged the broader leadership team starting with why this work was necessary. The team uncovered opportunities and set up processes for monitoring progress involving the lean A3 tool. The finance team would support this with analytics, key performance measures and a process to monitor progress and implement counter measures in areas of underperformance. Any effort to drive operational performance should be balanced, growth and revenue cycle optimization are at least equally important as cost containment. The expense side must also be balanced appropriately as workforce, supply chain and professional services agreements are evaluated based on key principles of the organization and its strategic priorities.