| The Challenge |
 | InterMountain Health Care is an Integrated Delivery System with a total of 23 hospitals throughout Utah and Idaho, and has a nationally recognized reputation for clinical performance improvement and cost effective patient care. Within IHC, the Urban Central Region (UCR) is the result of a consolidation of four Salt Lake City area hospitals. UCR wanted to create the foundation for an internal performance improvement initiative that would improve costs without sacrificing quality. The UCR looked to The Healthcare Management Council, Inc. (HMC) to help them address this initiative. |
High Overhead Prompts Creation of Functional Teams |
| One of HMC's primary goals is to redefine the traditional consulting model through the effective use of benchmarking and networking tools. HMC offered the Urban Central Region functional and clinical data from other organizations to supplement the IHC's internal benchmarking. HMC's multi-dimensional approach included three-year analyses for each individual hospital and an analysis of the Urban Central Region system as a whole. |
| HMC's benchmark found consistencies in high-cost performance across the system, revealing previously undefined cost improvement opportunities, particularly in overhead functions. UCR's Chief Operating Officer, Richard Cagen, used the analysis to target and gain commitment for an ambitious improvement program. Instead of across the board cuts, Cagen prioritized and focused on seven key functional areas. Managers received benchmark detail and financial forecasting models via CD-ROM, as well as access to HMC's extensive networking services. Achieving departmental budget targets became a factor in management review and salary determination. |
| To implement and sustain the improvement efforts, HMC assisted in the initiation of teams to examine each of seven functional areas. A Best Practice Steering Team with administrative advisors for each of the seven areas and representatives from clinical lines, quality management, and management engineering was created to report on specific progress being made and any barriers to implementation. |
| In addition, UCR has incorporated HMC's financial forecasting model into the budget process. "Each fiscal cycle puts additional challenges on administrators to cut costs. Benchmarking with HMC facilitates improvement processes with consistent comparisons to other well-managed institutions," says Sean Murray, UCR's Senior Management Engineer. |
Good Budgeting Process Means $5.4 Million Cost Reduction |
| The net result was $5.4 million in net cost reductions incorporated into the 1999 budget. |
| COO Richard Cagen said, "This was the best budget process we've had in years." |
