Using Evidence Based Practices
Turned Things Around for One Hospital
From $12M Loss to $8.4M Profit in 365 Days
Lynn McVey
Acting CEO & President
Meadowlands Hospital
Secaucus, NJ
LYNN M C V EY
C AREER PATH BEGAN IN 1982
R ADIOLOGY M ANAGER

2008: After 25 years in imaging, elected national
president 4000-member AHRA. Discovered Radiology is
an industry without external benchmarks

2009: Discovered extreme practice variations existed in
Radiology operations - Published findings.

2010: As consultant, saved 10 hospitals $million$ by
implementing EB practices in their Radiology depts.

2011: As COO; rolled out EBM to every (clinical + nonclinical) department in 200-bed community hospital

2012: As CEO, discovered healthcare is an industry
without external benchmarks
R ESULTS
EB P RACTICES
OF USING
HOSPITAL - WIDE

2010: Meadowlands Hospital was
losing $1 million/month ($12m/year).

2011: Twelve months later,
Meadowlands Hospital showed a
$8.4 million profit.

MHMC captures 6 Key
Performance indicators (KPIs)
each month, from every manager.
EBM dashboard – Summary of the data collections
DEPT NAME
Salary Expenses
Non-Salary Exp.
TOTAL Exp/Costs
Gross Charges
Collections (15%)
Net Revenues
Volume IP
Volume OP
Volume ER
Volume TOTAL
$ Supply/Exam
$ Salary/Exam
$ Cost/Exam
$ Revenue/Exam
$ Net Profit/Exam
AVERAGE OT %
J
F
M
A
M
J
J
A
S
O
N
D
2013 AVG
$12,000
$2,000
$14,000
$3,000,000
$450,000
$436,000
1,400
1,300
700
3,400
$0.59
$3.53
$4.12
$128.24
$124.12
2.00%
2012 AVG
$13,000
$2,500
$15,500
$2,500,000
$375,000
$359,500
1,300
1,200
600
3,100
$0.81
$4.19
$5.00
$115.97
$110.97
2.00%
2011 AVG
$14,000
$3,000
$17,000
$2,000,000
$300,000
$283,000
1,200
1,100
500
2,800
$1.07
$5.00
$6.07
$101.07
$95.00
2.00%
T WO P RACTICAL
C ASE S TUDIES

1. Evidence based knowledge
helped determine that $144
million was left on the floor of
an Interventional Radiology Suite.

2. Evidence based practices
reduced OVERTIME and
ABSENTEEISM by 7.2% or $5.7
million
Feb
Mar
Apr
May
Jun
Jul
Salary Expenses $111,082
$86,404
$134,636
$83,038
$70,375
$73,134
$74,866
$83,112
$110,406
$10,637
$9,097
$6,546
$13,817
$28,885
$22,628
$21,832
$16,206
$13,931
TOTAL Exp/Costs $121,719
$95,501
$141,182
$96,855
$99,260
$95,762
$96,698
$99,318
$124,336
RESPIRATORY
Non-salary Exp.
Jan
2012 AVG 2011 AVG
Gross Charges $2,738,145 $2,161,470 $2,406,385 $2,153,859 $1,508,465 $2,403,221 $2,407,319 $2,183,717 $1,582,855
Collections
(15%)
$410,722 $324,220 $360,958 $323,079 $226,270 $360,483 $361,098 $327,558 $237,428
Net Revenues
$289,003 $228,720 $219,775 $226,224 $127,010 $264,722 $264,400 $224,812 $113,092
Volume IP
4487
3238
4004
3188
3111
2921
2385
2937
4363
Volume OP
335
95
396
398
444
399
353
388.5
383
Volume TOTAL
4822
3633
4400
3586
3555
3320
2738
3326
4746
$ Salary/Exam
$23.04
$23.78
$30.60
$23.16
$19.80
$22.03
$27.34
$38.26
$24.00
$ Non-Salary/Ex.
$2.21
$2.50
$1.49
$3.85
$8.13
$6.82
$7.97
$4.71
$3.00
$ Cost/Exam
$25.24
$26.29
$32.09
$27.01
$27.92
$28.84
$35.32
$42.38 $26.20
$ Revenue/Exam
$ Net
Profit/Exam
$85.18
$89.24
$82.04
$90.09
$63.65
$108.58
$131.88
$98.50 $50.03
$59.93
$62.96
$49.95
$63.09
$35.73
$79.74
$96.57
$56.12
$23.83
AVERAGE OT %
1.1%
1.0%
1.2%
0.6%
0.5%
0.5%
0.3%
0.9%
2.0%
ABSENTEEISM
3
3
8
7
3
0
1
3.125
2.6
C ASE S TUDY 1 - 2003
P RACTICE VARIATIONS
 200-bed Community hospital
Interventional suite gross
charges = $150,000/month
 888-bed Level
1 Trauma
Center interventional suite
gross charges =
$150,000/month
R ETRO - BILLED AND COLLECTED
$5 MILLION OF $144 MILLION LEFT
ON THE FLOOR OVER 20 YEARS
Gross charges rose from $150K/month to
$750K/month overnight. This means an
extra $7.2 million/year for a struggling
inner-city hospital.
C ASE S TUDY 2
M ONITORING OT + SICK PAY
According to Bureau of Labor Statistics,
healthcare is an industry with above
average Overtime and Absenteeism
10.8% = OT (4% all industry average)
4.2% = SICK (2% all industry average)
http://www.bls.gov/cps/lfcharacteristics.htm
http://www.prnewswire.com/news-releases/overtime-in-us-extended-hour-operationscontinues-to-rise-73013397.html
Feb
Mar
Apr
May
Jun
Jul
Salary Expenses $111,082
$86,404
$134,636
$83,038
$70,375
$73,134
$74,866
$83,112
$110,406
$10,637
$9,097
$6,546
$13,817
$28,885
$22,628
$21,832
$16,206
$13,931
TOTAL Exp/Costs $121,719
$95,501
$141,182
$96,855
$99,260
$95,762
$96,698
$99,318
$124,336
RESPIRATORY
Non-salary Exp.
Jan
2012 AVG 2011 AVG
Gross Charges
Collections
(15%)
$2,738,145 $2,161,470 $2,406,385 $2,153,859 $1,508,465 $2,403,221 $2,407,319 $2,183,717 $1,582,855
Net Revenues
$289,003 $228,720 $219,775 $226,224 $127,010 $264,722 $264,400 $224,812 $113,092
$410,722 $324,220 $360,958 $323,079 $226,270 $360,483 $361,098 $327,558 $237,428
Volume IP
4487
3238
4004
3188
3111
2921
2385
2937
4363
Volume OP
335
95
396
398
444
399
353
388.5
383
Volume TOTAL
4822
3633
4400
3586
3555
3320
2738
3326
4746
$ Salary/Exam
$23.04
$23.78
$30.60
$23.16
$19.80
$22.03
$27.34
$38.26
$24.00
$ Non-Salary/Ex.
$2.21
$2.50
$1.49
$3.85
$8.13
$6.82
$7.97
$4.71
$3.00
$ Cost/Exam
$25.24
$26.29
$32.09
$27.01
$27.92
$28.84
$35.32
$42.38 $26.20
$ Revenue/Exam
$ Net
Profit/Exam
$85.18
$89.24
$82.04
$90.09
$63.65
$108.58
$131.88
$98.50 $50.03
$59.93
$62.96
$49.95
$63.09
$35.73
$79.74
$96.57
1.1%
1.0%
1.2%
0.6%
0.5%
0.5%
0.3%
3%
3.1%
8.0%
7.4%
3.1%
0%
1.0%
OVERTIME
ABSENTEEISM
$56.12
$23.83
0.9% 2.0%
3.13% 2.6%
Case Study 2
Monitoring OT + SICK Pay
LABOR & DELIVERY
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
Case Study 2
Monitoring OT + SICK Pay
OPERATING ROOM
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
C ASE S TUDY 2
M ONITORING OT + SICK PAY
Liberty Hospital
$48,000,000
$7,200,000 (Liberty)
$1,440,000 (MHMC)
$5,760,000
US Hospital Data
$421,254,620,889
$63,188,193,133
$12,637,638,627
$50,550,554,507
2010 Budget = $80m
60% = SALARY
10.8% = OT and 4.2% = SICK
2% = OT and 1.0% = SICK
7.2% reduction
2011MedPac
60% = SALARY
10.8% = OT and 4.2% = SICK
2% = OT and 1.0% = SICK
7.2% reduction
EBM cases at Meadowlands Hospital
Incomplete documentation of medical records - average admission = $11,000
(cardiologist = $6m)
Staffing Plan in EBM format 1- disclosing practice variations ($144K in Lab,
$120K in Radiology)
2- On-call/night shift in ultrasound cost $100K/year. Staffing it cost $84,000.
"we like the extra money"
Overtime in EBM format discloses $160K in OT in Cardiac Cath Lab - 4 fTEs
worked 7a-3pm; moved 2 to 9-5p
Productivity in EBM format discloses low performers (<20% average =
progressive discipline)
Absenteeism in EBM format discloses unaddressed/excessive absenteeism
($268K reduction Year 2)
2 - Hawthorne Effect eventually reduced OT to 2% + SICK to 1%; reducing
$1m/year in labor costs (Year 3)
Volume in EBM format discloses referral patterns of physicians in real-time;
triggers intervention
Failed Bills/Edits in EBM format discloses root cause of denials (usually
Registration omission)
North Jersey hospitals rated for
patient safety
Wednesday, May 8, 2013
BY LINDY WASHBURN
STAFF WRITER - The Record
Chilton Hospital dropped to a D and
Meadowlands Hospital Medical
Center improved to a B in the latest
hospital grades for patient safety
reported Tuesday by the non-profit
Leapfrog Group. The rest of North
Jersey's hospitals maintained the
grades they received six months ago.
EBM CAN FILL THE “GAP” BETWEEN
CLINICAL MANAGERS AND B USINESS
I’ve used EBM since 1982. In 2012, my graduate
degree’s theme was “EBM in the acute care setting”.
I’ve demonstrated several EB-practices with
significant results here today.
As a CEO, I witness the “knowledge gap” in Clinical
Managers everyday. My role has become EBM
educator.
I believe EBM should
be a required course
for both undergraduate
and graduate clinical
programs.