THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 15, 1995 TAG: 9501140094
SECTION: SUFFOLK SUN PAGE: 14 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY PHYLLIS SPEIDELL, STAFF WRITER
DATELINE: SUFFOLK LENGTH: Long : 159 lines
VIRGINIA'S FIRST report card on the efficiency and productivity of its acute-care hospitals and nursing homes, published in December, has given local hospitals, including Louise Obici Memorial, an opportunity to see how they stack up against other hospitals in the region.
Obici did not get top grades. And Obici's directors have decided to postpone plans to expand the hospital's nursing school and build a conference facility.
Among 20 acute-care hospitals in the Eastern region, Obici ranked 13th. There was a virtual three-way tie for both first and second places; Sentara Leigh in Norfolk edged out the competition for top honors as the region's most efficient health care provider.
This report, however - the first of its type nationally - looks primarily at financial indicators and does not measure quality of care or patient satisfaction. Those are the areas the Virginia Health Services Cost Review Council, publisher of the report, plans to include in future years as the report's methodology is refined and expanded.
``I think the report is of some value because it is helpful to see how you stand in regard to some of these statistics related to other hospitals in the area,'' Obici president William C. Giermak said in a recent interview. ``The report points us in the direction we are already pointing ourselves: to become more efficient and to take a more aggressive look at costs while making sure that quality is still there and that we offer the full range of services we do now.''
In 1992, the Virginia General Assembly directed the cost review council to develop a method of recognizing and ranking Virginia's most efficient health care providers. Working with data collected from each hospital for fiscal year 1993, the council compiled a four-volume, 3-inch-thick statistical report aimed at helping insurers, employers and other health care purchasers compare providers.
Accountability, efficiency, productivity. Key words in business and industry for years, they have become increasingly important to the health care field.
``As purchasers take a more critical look at how they purchase health care, they are going to be focusing in on the costs, efficiency and productivity of all providers,'' Giermak said.
Obici's ranking came as something of a surprise to Giermak compared to other statistics compiled over the years by the Virginia Hospital Association and the SunHealth Alliance, a regional hospital association. Those reports had placed Obici closer to the median in areas of staffing and labor costs.
``However, this report clearly indicates that we were in the last quartile,'' Giermak said.
Overall, Obici ranked in the third and fourth quartiles in the areas of costs, staffing and the average length of a patient's stay - but fared better in utilization of staffed beds and in providing charity care.
Giermak, as well as some other area hospital administrators, acknowledged that the strict parameters of the report may not adequately factor in the unique characteristics of each facility. For example, Giermak said that because Obici serves an older, less affluent community, it incurs a higher level of uncompensated care - which in turn affects Obici's overall operation costs.
``Of the five hospitals in the bottom quartile,'' he said, ``all generally serve an older and poorer population.''
One of the intended uses of the cost review council's report is to support collaborative efforts among hospitals to provide special services economically by sharing highly specialized, sophisticated diagnostic and treatment equipment.
But Obici plans to continue its policy of providing a full range of services to the greater Suffolk area, Giermak said.
``One of the things we have worked on very hard for the last seven to 10 years is really expanding the range of services that is available in Suffolk so that people would not have to travel to Norfolk for certain aspects of their care.
``But there has been a cost in doing so - in equipment, technology, plant expansion - and also in having more people here to operate the cardiac cath lab, or the MRI, or the psychiatric service here.''
Giermak also mentioned Obici's nursing school, an integral part of the hospital complex but a factor that was not positively reflected in the council's report. The additional costs of staffing and running the school inflated Obici's overall cost figures and resulted in a higher average cost per admission.
Although Giermak said he has heard no feedback from outside the hospital about the report, he has had several sessions with the board of directors and with the hospital staff to discuss its impact.
``We have talked about why it was important to Obici,'' he said, ``and about the areas where we need to make improvements.''
Even before the report was issued last month, Obici department managers had been assigned a specific project to reduce staffing wherever possible by normal attrition or early retirement incentives.
``We hope to do this without having to go into job elimination,'' Giermak said. ``That would be a very last resort.''
Although Giermak says Obici has a firm commitment to its nursing education program, he said that recently announced plans for a $7 million nursing school expansion and conference center have been put on hold.
``We didn't think it made a lot of sense to, on one hand, be talking about all these other efficiencies we need to make from the operating standpoint and then be digging a $7 million hole in the ground for a new building,'' he said.
Obici has a master plan of expansion and remodeling with particular attention to the operating and emergency room and ambulatory services areas.
But Giermak indicated no major projects will be undertaken within the next year or so.
Giermak did say, however, that Obici will continue to work closely with the Gates County (N.C.) Medical Center and with the medical office facility in Smithfield, in Isle of Wight County. Obici also plans to establish a family practice physician in northeast Suffolk in April when an office will be opened in the Food Lion shopping center in Bennett's Creek.
And Obici plans to convert a small portion of its medical/surgical unit to a skilled nursing facility as an intermediate step for patients who could leave the hospital but are not ready to return to their homes. ILLUSTRATION: [Cover]
THE COST REVIEW REPORT
Why Suffolk's hospital didn't score on top.
[Color Photo]
Staff photo by MICHAEL KESTNER
Obici president William C. Giermak talks about the hospital's score
in the Virginia Health Services Cost Review Council's report. The
low ranking was a surprise, he said.
Staff photos by MICHAEL KESTNER
``Of the five hospitals in the bottom quartile,'' Giermak said,
``all generally serve an older and poorer population.''
``The report points us in the direction we are already pointing
ourselves: to become more efficient and to take a more aggressive
look at costs.''
``One of the things we have worked on very hard is . . . expanding
the range of services . . . so that people would not have to travel
to Norfolk.''
File photo
Betty Faison, a registered nurse, checks on newborns in the nursery
at Obici Hospital. Because of the state report, Obici's directors
have decided to postpone plans to expand the hospital's nursing
school.
Chart
OBICI MEMORIAL
Number of staffed beds 180
Total employees 950
Full-time employees 780
Average stay 5.8 days
Average amount paid for a hospital stay $4,976
THE BOTTOM LINE
STAFF Chart
SOURCE: Virginia Health Services Cost Review Council: Staff reports
[For a copy of the chart, see microfilm for this date.]
KEYWORDS: OBICI HOSPITAL COSTS EFFICIENCY RANKING by CNB