Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 29, 1995 TAG: 9510270119
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Long
Simply put, Carilion Health System is trying to cut its expenses so it can cut its prices to customers, most of whom are represented by insurance companies with their eyes on the bottom line.
As a patient's stay in a hospital, or any type of health care service, is controlled more and more by rules of an insurance company, health care providers have to find ways to make themselves attractive to the insurers. Insurance companies and the businesses they represent can shift a group of workers from one health care network to another in short order.
Carilion President Tom Robertson took note of that two weeks ago when he announced a new and leaner organizational chart for the Roanoke-based hospital company.
"Customer is a new word in health care," Robertson said. "But patients are being won and lost in large numbers, and we have to be responsive to the cost demands of companies."
Money talks, which means low-cost service is alluring. But so is service that produces results. Hospitals, doctors and others in the business of overseeing the public's health not only have to try to be the low-cost provider, but they also have to prove they're helping the patient, he said.
In Carilion's new structure, a business that wants to know the results of certain cardiac procedures, or the mortality rate from them, will be able to ask and get answers, Robertson said. And that goes for all medical procedures. The information will be centralized under an executive vice president who also is a physician.
Come the first of the year, it won't be accurate to speak of Carilion "departments," not if you're thinking of operations contained within walls. The company, which owns and/or operates 15 hospitals from Southside to far Southwest Virginia, is being redesigned along service lines, much the way companies in other industries are organizing.
Medical Director Dr. Kellogg Hunt Jr. will be responsible for the data on quality management and performance, risk management and utilization as he oversees all medical staff activities within the system of Carilion-owned hospitals, which include Community and Roanoke Memorial in Roanoke, Radford Community and Giles Memorial in the New River Valley, and Bedford County Memorial and Franklin Memorial hospitals. The managed facilities aren't included in the changes.
Dorman Fawley, who runs Community Hospital, will be responsible for all patient services, whether they're delivered in a person's home, in an emergency room at Roanoke Memorial or at a clinic in Giles County.
The same is true for Houston Bell Jr., who will oversee system services, including pharmacy, human resources and food services. Don Lorton will head such strategic services as planning, managed care, marketing and legal.
These four men, plus Lester Lamb, who remains president of Radford Community, will become executive vice presidents in the new structure, which is to be in place by Jan. 1.
Except for Lamb, the corporate team members will have no specific hospital identity. Carilion is trying to get away from looking at itself as a collection of hospitals and begin thinking like a single system, Robertson said.
That will mean making some tough decisions, such as where services should be offered, he said. An example: Does the company need to run radiology services at six sites?
Carilion hospitals will have a learning curve on this, because they have been competing with each other for patients and developing their outreach programs and public images independent of their kin.
Patients also may have to make some adjustments; a familiar hospital might not be the one giving the service needed. The hope, though, is that a customer-patient might be able to move smoothly throughout the Carilion system without the burden of repetitious paperwork.
In addition to the corporate-level changes, the company has identified 10 service areas that each will have an administrative director and a medical director with the power to make decisions across the system. Whoever runs home health for one hospital will run it for all of the hospitals and for the home health business that's not connected to a hospital service.
The effect of the staff changes is obvious. Within the next year, as management is flattened from eight layers to five, management staff will be uncomfortable about job security. What employee group will be affected later depends on the findings of each service area as it settles into operation. Will there still be too many employees?
Most likely. Robertson has noted in the past that cutting the work force by attrition has gotten harder because people are staying in their jobs longer than in the past.
Will there be layoffs? He doesn't rule them out. Will there be buyouts? He says none are planned at this time.
However, Sentara Health System, a Norfolk-based hospital company often compared with Carilion, said Oct. 13 that it had offered early retirement to 500 employees age 55 or older. The company employs 11,000.
Sentara's redesign is not exactly like Carilion's, but it, too, is changing. How and how much is being figured out by 25 managers who were handpicked and are housed together in an unused portion of Sentara Leigh Hospital in Norfolk.
Carilion's future has been charted by more than 300 employees who have met anywhere they could find space.
No matter who's doing the remake, such results as lower costs, streamlined decision making and more flexible employees are obvious results. The unknown is how it will affect the patient or health care user, the "customer," by Robertson's definition.
"It will be business as usual in terms of taking care of patients," he said recently. The new system also should assure "quality service" across the system, he said.
The unknown factor is that there's no general definition for "quality service." And the ones doing the buying - the insurance companies and employers - aren't the ones receiving the service.
This new system of health care emerging throughout the country will be a major challenge for consumers, but with all the promises of accountability, the customer might be the winner after all.
\ Sandra Brown Kelly covers health and medicine for The Roanoke Times. She can be reached at (540)981-3393, or at sandrakinfi.net.
by CNB