'The mission is still the mission'

Healthcare Financial Management, Dec, 2005 by Robert D. Ramsey, Jr.

In August, Robert Ramsey, FHFMA, CPA, CFO of Our Lady of the Lake Regional Medical Center in Baton Rouge, La., gained a new appreciation for the word "sudden." Between August and September, the hospital's census increased 18 percent as a result of Hurricane Katrina. Normally such an increase would be a dream for most hospitals, but hfm wondered about the effects of such a sudden influx on hospital operations.

For answers, hfm interviewed Ramsey, who shared his thoughts on Hurricane Katrina, leadership, the mission of religious-affiliated hospitals, and The Wall Street Journal.

Our emergency department continues to be significantly busier; Baton Rouge almost doubled in size overnight since Hurricane Katrina. And clearly we've had an increase in our self pay population. The hurricane also created some issues with our method of getting supplies. A lot of our suppliers were in New Orleans, or up near the Slidell area, so those supplies have to be rerouted. And we don't have an endless amount of supplies around here as it is--or we try not to.

We've seen our charity care and bad debt go up. We have to believe that some of our bad debt is actually charity care, because not all patients provide us with enough information to classify it as charity. But we've taken a pretty stringent approach to making sure that we classify patients correctly.

We follow the American Hospital Association's recommendations on handling bad debt and charity care. We offer prompt-pay discounts, and we try our best to identify patients up front who may be eligible for charity care. Patients who obviously can't pay their bill meet with a financial counselor. We try to get people signed up for

Medicaid because they're going to get other benefits, not just from the hospital. But if they don't qualify for Medicaid, we'll provide them with the charity care classification.

Clearly, the top challenge for healthcare CFOs today is balancing the organization's mission with the margin. The mission of a religious hospital clearly is going to be a little different from other hospitals because there is a religious tone to the mission. And I don't think the mission of religiously operated hospitals has really changed much. I think the thing that has changed is the amount of government regulation. When the Franciscan sisters opened the hospital in 1923, they didn't have to deal with all the regulations and CMS and OIG and congress telling them what they could and couldn't do. Today we all know that's not the case. But the mission is still the mission. We're still here to take care of the sick and to maintain a Catholic identity. That hasn't changed.

Also, I think hospitals with emergency departments probably have challenges similar to those of religious hospitals. A hospital that doesn't have an emergency department is more able to control its own destiny. If a patient shows up in an emergency department, the government has mandated that the hospital will see that individual. A hospital without an emergency department doesn't have to follow those rules, so its admissions are more likely to be elected and selected.

We do have competition in town--our closest is Baton Rouge General Medical Center. It's not a religious hospital, but it has an emergency department, and it takes care of the same types of patients that we do. And we have to follow EMTALA.

I have worked at both community-based and for-profit hospitals, and other Catholic religious-based institutions, large and small. Clearly, there's a religious theme here that doesn't necessarily exist at a community-based hospital. For one thing, we start meetings with a prayer. You don't do that at a community-based hospital meeting, typically. And Catholic holidays and holy days are observed around here. But other than that, if you're working in health care, then you're there for a reason. So it doesn't really matter if it's religious-based or not, in my opinion.

Our hospital has its goals divided into for pillars--employee engagement, customer service and loyalty. operational excellence, and financial success and growth. Each of those pillars helps us make sure that we're balancing mission with margin and providing the type of financial success that we need so we'll have access to capital. Every employee knows those goals. People are held accountable, and management grades us on those accountabilities.

For example, regarding employee engagement, employees are one of the backbones of the organization, and they're the ones who are going to help keep us out of The Wall Street Journal. If they do something incorrectly, a multitude of things can turn out badly for the organization. What that means is that the last thing you need is to open The Wall Street Journal and find out that you've done something that has embarrassed your organization. If you're in The Wall Street Journal, you want to be in there because you did something great.

We ensure employee engagement through employee surveys, and management addresses issues revealed by those surveys. Management also looks at whether we've lowered our employee turnover percentage in certain parts of the organization. With a lot of turnover, there's a greater potential for errors, it costs more money, and it's harder to pass on the mission of the organization if people come and go.