Community Healthcare System embarked on a journey of Operational Excellence in January, 2007 with the support of the Studer Group®. The journey to hardwire excellence was undertaken by three not-for-profit, acute care hospitals – Community Hospital in Munster; St. Catherine Hospital in East Chicago and St. Mary Medical Center in Hobart. The three hospitals, which were brought together under a single ownership in 2001, were looking to establish a common culture upon which to achieve further integration, operational improvements and greater patient satisfaction.
A key focus of Operational Excellence was leadership training. In January, 2007 the management team from all three hospitals was brought together for the first time for leadership development. With new skills in tow, the management group set out to address ways to make Community Healthcare System a better place for patients to receive care, for physicians to practice medicine and for employees to work. For the first time since becoming a healthcare system, everyone was talking the same language and measuring progress based on the five pillars: Service, People Quality, Finance and Growth.
Service. As a healthcare system, there was a general belief that we provided very good care, but our Press Ganey scores did not support this notion. As a system, our patient satisfaction scores for the third quarter of 2006 were in the 18th percentile for inpatients across the three hospitals. Using many of the training tools provided by the Studer Group, the management team focused on improving our patients' perception of care. Steady, consistent progress has been demonstrated at all three hospitals, which collectively recorded an inpatient satisfaction score in the 82nd percentile for the second quarter of 2009. We continue to set higher goals and hold our management team accountable for driving further improvements.
People. With the emphasis on training our leaders, we wanted to create a better workplace for our employees. We took a hard look at ourselves and established teams throughout the healthcare system to focus on employee recognition and retention initiatives. New programs were started at all three hospitals to recognize high performers. New channels of communication were opened at every level of the organization. We answered tough questions, solicited ideas from employees and instituted regular town hall meetings to better engage our staff. Employee turnover rates have dropped from 13.6% in the third quarter of 2006 to 10.3% during the second quarter of 2009.
Quality. The journey for Operational Excellence built upon the practice of identifying best practices between the hospitals and implementing them across the healthcare system. Since the start of operational excellence, the hospitals of Community Healthcare System have been recognized by a number of agencies for delivering high quality care. Most recently, Community Healthcare System was rated by Thomson Reuters as one of the top 50 performing health systems in the nation. Community Healthcare System has performed in the top 20 percent of health care systems nationwide for five measures of performance: mortality, complications, patient safety, length of stay and use of evidence-based practices. Hardwiring excellence is also evidenced in the gains made in compliance of core measures and patient falls. Core measure compliance improved from 91% average (first quarter 2007) to a 95% average (second quarter 2009) for the healthcare system. The actual number of patient falls throughout the healthcare system declined 28 percent from the third quarter of 2004, compared with the second quarter of 2009.
Finance & Growth. A number of operational efficiencies have been achieved since coming together as one healthcare system. However, the largest incremental improvements – including an increase in market share – have occurred within the past two years corresponding to the improvement in patient satisfaction. Community Healthcare System realized this past fiscal year ending June 20, 2009, an increase in operating income of 17.9% over the prior year. The higher operating income was derived from a rise in operating revenue of 6.4% while holding expenses to an increase of only 5.9%. Total Assets increased 8% over the prior year, and net assets saw an increase of 2%. Community Healthcare System positioned itself well in the financial markets during Fiscal 2009. Leadership studied the collapsing auction rate bond market, investigated alternative funding options, and developed a plan to reduce interest costs by 21% over the prior year. This reduced cost of borrowing has allowed the system to invest in capital while simultaneously increasing the System's daily cash on hand. The capital expenditures made possible by the financial gains mentioned above have assisted Community Healthcare System in realizing its goal of growing market share in a very competitive hospital environment.