Healthcare organizations are facing exponential growth in change—not just to compete, but to survive. Amid the widening gap between expenses and reimbursements, hospitals must manage the adoption of expensive advanced technologies, continuous synthesis of emerging clinical knowledge, intensive regulatory readiness and public ranking of quality outcomes. And they must handle these as patient expectations grow.
At Methodist Le Bonheur Healthcare, we have approached these challenges by nurturing an organizational mindset of transformational innovation. The ability to harness the collective brainpower of 12,000 MLH associates to find cost reductions, operational efficiencies and better ways to provide patient care has proven invaluable when facing the demands to do more with less.
Achieving this degree of engagement began with full transparency of the challenges we face as an organization, clearly articulating the need to change, and providing a structured approach to capture and respond to suggestions from the workforce.
The Power of One Idea program, a platform for listening and learning, has enabled the workforce to answer that call and make an impressive impact: $17 million in cost savings and previously untapped revenues. In return, the forward-thinking associates submitting those ideas have shared in those savings and realized more than $1.5 million in extra income. The Performance Excellence Award, a program to seek out best practices in safety, efficiency or effectiveness, also has enriched the business with at least 100 proven approaches to advance care delivery.
Most organizations realize that innovation is no longer an option, and those that are thriving have learned to do it well. Rather than relying on untethered outside-the-box thinking, innovations at Methodist Le Bonheur Healthcare have been largely guided by the Closed World model, which builds on existing resources. This mentality of first looking inward to solve business needs has become a core tenet of our improvement efforts.
The current financial climate for hospitals makes it increasingly necessary to find more cost-effective ways to provide care. In Tennessee, for example, total expenses in 2022 surpassed prepandemic expenses by $3.2 billion and outpaced any revenue increases; in 2022, hospital margins in the state were –2.9% against a national average of 0.4%. Overall hospital expenses rose by 17.5% between 2019 and 2022, while Medicare reimbursement grew by only 7.5%.
The postpandemic outlook is not much better, with the first quarter of 2023 yielding the largest number of bond defaults by hospitals in more than a decade. This situation is not sustainable. Even with the most earnest efforts to be agile, significant transformations are challenging. If it were easy to turn things around, most organizations would have already done it.
So, healthcare leaders must look to innovation as the answer, understanding that if they do not innovate, someone else will do so at their expense. Customer expectations are changing at a very fast clip. At MLH, innovation ensures efficiency and improves our financial stewardship by eliminating duplicative tasks and unnecessary waste.
Learn more from the authors about Methodist Le Bonheur Healthcare’s Power of One Idea program.
Editor’s Note: This content has been excerpted from “A Healthcare System Looks Within to Improve Outcomes,” Frontiers of Health Services Management, vol. 40, no. 1, by Monica Wharton, FACHE, and Paula Jacobs. It has been edited down for length.