'To make a difference'

Healthcare Financial Management, Feb, 2006

When Catholic Health Initiatives was founded in 1996, it was the nation's largest Catholic healthcare system, with facilities in 22 states. That broad coverage was the result of the consolidation of three large systems--Catholic Health Corporation (Omaha), Franciscan Health System (Aston, Pa.), and Sisters of Charity Health Care Systems (Cincinnati). With the addition of two more systems--the Sisters of Charity of Nazareth Health System (Nazareth, Ky.) in 1997 and the Sisters of St. Francis of the Immaculate Heart of Mary (Hankinson, N.D.) in 1998--CHI realized that its regional structure was preventing its national office from relating closely with its local markets.

Consequently, the system reorganized from six regional structures into an organization with two levels of operation and governance--one at the national level and one at the local level with many basic service units, called market-based organizations, which provide healthcare services to their local communities.

This restructuring was very much in line with the CHI vision.. "transforming traditional healthcare delivery and creating new ministries to promote healthy communities. "In other words, CHI set out to make a difference. And it is succeeding. After a bumpy financial ride in the late 1990s, the system managed a significant turnaround, achieving a positive financial turn of more than $150 million from FY99 to FY00. CHI is now the second-largest Catholic healthcare system in the nation.

To learn more about how the healthcare system manages its complicated and successful enterprise, hfm talked with Colleen Blye, CPA, CHI's senior vice president of finance and treasury and CFO. Before accepting her current appointment in January 2005, Blye sewed as vice president of financial services for CHI since 1998, and with one of its founding member systems since 1989.

As the second-largest Catholic healthcare system in the nation, how does CHI communicate with its many market-based organizations?

We use both formal and informal communication methods. We have a number of regular written and web-enabled communications, including an organization newsletter and a president's report, which help foster and facilitate organization-wide communication. We have monthly financial reporting; we also prepare a quarterly investment report because we have a centralized investment program for all of our facilities.

We also have regular meetings, including a number of face-to-face meetings with our key executives across the organization. Every two years we bring together all our leaders, from the national as well as the market-based organization level, in a national leadership conference. This group includes our senior executives as well as board and physician leaders. All MBO CEOs meet semi-annually for education and clinical, operational, and financial updates. And we typically have annual national meetings within each of our functional areas--finance, strategy, IT, and so on. So we have many opportunities to bring the key executives from across our system and from the national organization together to share leading practices and talk about the organization's direction.

There is a lot of "face" time. We also have CEO and CFO conference calls, as well as periodic conference calls with our functional areas. So whenever we have a major initiative and we're looking either for feedback or the opportunity to update the organization, we regularly schedule conference calls to accommodate that. These calls can be held as frequently as monthly, or maybe four to six times a year.

Where is CHI focusing in terms of cost containment and revenue generation?

CHI is focusing on a number of fronts to ensure long-term viability. We have both growth and cost-containment initiatives under way, and it's imperative to make sure the focus exists in both arenas. Growth for CHI is an imperative. We have significant focus on growth opportunities at the MBO level, whether on service line development or enhancement, or on what I refer to as the basics of health care--for example, making sure that we document and code to properly account for the services we deliver.

CHI is also in the midst of implementing an enterprise resource management system. That will allow us to standardize as well as centralize a number of our core functions, which include accounts payable, supply chain, payroll, and human resources. Obviously, cost reduction is one of the objectives related to that project.

CHI is also building relationships with our providers and physicians, and through mutual advantage we believe that improves our quality and patient access while at the same time reducing the costs of delivery. We have developed an organizationwide initiative that we call STEEEP--safe, timely, efficient, effective, equitable, person-centered care--which ultimately is focused on providing the right care in the right setting at the right time.

As part of this initiative, we have rapid response teams in our care delivery model. A rapid response team is a core group of experienced clinicians that nurses and other hospital staff--and, in some eases, patients and their family members--can call onto intervene if a patient's condition is deteriorating. This practice provides assistance to patients before they reach a more critical point of distress, when they are at greater risk of serious complications. It provides an additional resource to keep patients safe.