Integration Update

Moving Forward in a Rapidly Changing World: Jefferson Update

More than 3,000 employees and physicians attended the second series of meetings, in Center City "Moving Forward in a Rapidly Changing World: Jefferson Update." (Ford Road Campus meetings have been scheduled for April.) They heard senior managers talk about the changes Jefferson is making to ensure that we can continue our patient care, teaching and research missions while maintaining our standards of quality as well as our financial stability. What follows is a synopsis of these meetings and a review of frequently asked questions.

Jefferson Health System (JHS)

Employees heard that Jefferson is moving forward in its strategy to develop an integrated healthcare delivery system. The hospital separated from the University on March 1, and became Thomas Jefferson University Hospital, Inc., with Thomas J. Lewis as chief executive officer. This separation allows the hospital to fully participate as a member of JHS. While the University and Jefferson Medical College will be separate from the Health System, they will still be strategically linked to continue our academic and research mission.

Administrative details, such as new forms, separate purchasing systems and payroll will be worked out over the next months.

In addition, 15 integration teams with approximately 60 participants from Main Line Health and Jefferson are looking at ways to operate more efficiently.

Continuing discussions with Riddle Memorial Hospital and West Jersey Health System move us toward JHS's goal of bringing into the system institutions that are compatible and can provide the levels of care needed. The hospital is also looking at developing closer affiliations with Methodist and Pennsylvania hospitals.

Likewise, the Jefferson Cancer Network continues to develop with the recent addition of Pennsylvania and Underwood hospitals.

HealthLINK

A priority of Jefferson Health System is to develop an integrated information technology capability. We are working to coordinate selection of a primary software vendor shortly and have narrowed the selection process to two finalists. We need to ensure that patient identification and sharing of data can occur easily between JHS members.

Significant progress has been made in:
Physician Linkages

A key component of our success in developing an integrated healthcare delivery system is the commitment of our physicians, who recommend Jefferson's services to their patients and who support our delivery of quality care. In Philadelphia and throughout the country, there has been a great deal of movement of physicians between different healthcare organizations ­p; another sign of the rapid change we are experiencing in the healthcare industry today.

While several doctors have decided to leave Jefferson to work with other academic healthcare centers, Jefferson has also been able to recruit new physicians with highly respected and well-established practices; and we are actively pursuing primary care and specialty practices.
Jay Sial has been hired as JeffCARE administrator, and Stanton Smullens MD, has been named CEO.

The Jefferson-Affiliated Management Services Organization (JAMSO) provides practice support and management expertise to 13 practices and 24 primary-care physicians, as well as 2 practices and 3 specialists, and is actively working to expand.
Cost Restructuring

Admissions are down 3 percent and patient days ­p; the number of days that patients stay in the hospital ­p; are down 8 percent compared to our projections, and these decreases are occurring much faster than we had projected. Federal and state funding continue to decrease, and competition for our services continues to increase. In addition, a Ridge administration proposal would cut state appropriations to Jefferson Medical College in half and would leave a large number of current Medicaid patients without any insurance.

To achieve our cost-reduction goals, we must look across the organization at ways we can provide healthcare services more efficiently.

Ten design teams have been meeting regularly since the beginning of the year to evaluate various opportunities for cost savings and process redesign. In addition, we are looking at organizational structure, capacity management and benefits. Cost restructuring is an enormous effort, and we are very grateful for everyone who has contributed to it.

The idea approval process includes idea submission by the team, a cost/benefit analysis, department input, submission for Steering Committee approval, and then the idea moves to the implementation phase.

Our initial goal is to identify $25 million in cost savings by July 1. As of March 8, the Steering Committee has approved suggestions for a projected savings of $10 million. Even if you are not participating on a design team, you still can make suggestions for cost reductions and efficiencies. A suggestion form was included in each hand-out packet. Additional forms may be obtained by calling 5-9504.

To redesign many of the processes and procedures we use to do our work, subgroups of teams are looking at activities such as documentation, medication administration, lab testing and patient care delivery to see where things can be done more efficiently. (See chart below).

Cost restructuring is a long term effort which is requiring many difficult decisions. Jefferson is taking a new look at everything we do and how we do it. Clearly, positions will be eliminated and many of our jobs will be different than they are today. This type of change is stressful and can affect our ability to work well while it is taking place. It won't be easy, but this is the most effective way to preserve Jefferson's strengths.

Human Resources

New organizational structure guidelines recommend:
We are continuing to look at human resources programs to support the cost restructuring activities, including voluntary separation programs and review of retirement, compensation and benefit programs. We also have an agreement with Main Line Health System to give preferential consideration to employees who are laid off during this process.

Capacity Management

To respond to the current trends in admission and patient days we have eliminated 200 full-time equivalent positions as of April 1. This translates to laying off 135 employees at all levels throughout the institution, with the rest being positions that are currently vacant. This will provide $9.4 million in annual cost savings. Severance packages and outplacement assistance are being provided for affected employees.

This was a very difficult action for us to take, as it affects many people around Jefferson both directly and indirectly. Because the pace of change in healthcare is accelerating even faster than we had anticipated, we must respond quickly in order to preserve our ability to effectively deliver care over the long term.

There is a team monitoring activity to align our capacity with the current trends; and a number of the initiatives we have outlined, such as new physician linkages, are designed to contribute to improving numbers of admissions.

Moving Forward in a Rapidly Changing World

While we are in the midst of a great deal of activity and change, Jefferson has experienced a number of turbulent periods during our 175 years. But Jefferson has survived and survived well throughout them all. These are difficult times, but they also ultimately can be exciting times as we face the challenges of maintaining our mission in a new era of healthcare delivery. To ensure our continued success:
If we succeed at these things, we have every reason to believe that we will continue to sustain our outstanding heritage and our mission of quality patient care, academic and research excellence, and community service.

Please use the hotline (955-1799) as well as e-mail and the Thomas "ANSWERS" system to ask any questions you may have.

As part of the process, we have defined the current culture at Jefferson and envisioned the new culture that we need to succeed. Please note the differences in the old and new cultures as well as the things that need to be maintained:
Current Culture
Consensus-driven
Long decision time frames
Strong hierarchical structure
Process-oriented with emphasis on conformity
Departmental focus
Quality of care
Mission of education, research and service

Future Culture
Participation with direction
Sense of urgency
Flat organization
Focus on results, risktaking
Process redesign
Quality of care
Mission of education, research and service

TO ANSWER YOUR QUESTIONS

Q. How can we ensure that patient care won't suffer with all this change?

A. We have always been committed to maintaining high standards of patient care, and that commitment is not changing. In fact, many of the initiatives we are undertaking are designed to enhance patient care and satisfaction. What is changing is the way we deliver patient care, to ensure that we are using all of our resources most efficiently and cost effectively.

Q. What are our competitors doing? Are they experiencing the same problems as Jefferson?

A. Up to this point, Jefferson has not had to go through the severe changes that a number of our competitors have. Jefferson is experiencing and responding to the same challenges as all of our competitors, which are particularly attributable to the shortened length of hospital stays. There are many different strategies and no one formula guarantees success in healthcare delivery today. A number of our competitors have been taking a more short-term approach to the current environment by concentrating on acquiring physician groups. Jefferson has not pursued this strategy as strongly, instead focusing on the full continuum of care. However, we have continued to adjust our strategy to the current trends and needs, and we are dedicated to developing a regional presence for the Jefferson Health System.

Q. Will layoffs be used to fund HealthLINK and other new projects?

A. We are not looking at job eliminations as a direct source of funding for any of these initiatives. Rather, we are identifying areas of our organization that require more or less investment and resources going forward. Any changes to or elimination of jobs will be a result of a thorough study of the work performed in that area now and as we see it in the future. However, we must also recognize that achieving our mission requires doing new things, and these new initiatives often require significant capital expenditures. We must be concerned with managing the "bottom line" of our business in order to ensure that we can continue to deliver our services effectively.

Q. What portion of the $75 million cost reduction goal is going to be reductions in labor?

A. The cost restructuring and process redesign effort is designed to look at the way things are done, and make recommendations as to what things can be done differently to be more effective. Because we are in a people-intensive industry, a majority of our expenses are labor. However, we continue to look at vacant positions and attrition as much as possible.

Q. What are the criteria for choosing job eliminations ­p; seniority? education? experience?

A. Job eliminations will be based on performance first, and then seniority, other than where the criteria are defined by contract.

Q. What is being done to keep up morale during this period of change?

A. While we understand and appreciate the stress that uncertainty poses for you and for us, we do not have definitive answers and are unable to predict what the future holds for all of us. Please be assured that we will keep you updated on developments that affect you. We encourage you to take advantage of programs offered through the department of human resources and the Health Awareness Program.

Q. When will the new model for patient care delivery be developed? How will roles change as a result? Will there be retraining so existing employees can have a job in the new organization?

A. One of the major tasks of the Care Management design team is to look at the way in which patient care is delivered, and how we need to be staffed in the future to deliver care. Currently, the goal is to develop a new model for patient care delivery by the end of May to present to the Steering Committee for review. We do not have a predetermined model going in to this process. Once the new model has been reviewed and approved, we will identify what changes need to be made in terms of staffing. The full implementation of a new patient care model will take a number of months with very detailed project plans and input from the affected areas. We will continue to keep you informed in On the Horizon as progress is made and plans are developed in this area.

Q. What ideas from the design teams have been approved so far?

A. The teams first concentrated on what we called "Just Do It" ideas, focusing on things like eliminating vacant positions, management of supplies, and bidding for outside services. Now we are beginning to look at more complex ideas and work redesign concepts. As an idea is approved, an implementation team will be formed, and we will communicate approved ideas to you periodically in On the Horizon.

Q. Will benefits be cut or changed?

A. We have no immediate plans to cut or change benefits. A team has been formed specifically to review all of our benefits plans as a part of this process. We will update you on this over time.

Q. Will there be an early retirement plan or voluntary severance?

A. We are looking at offering a number of different voluntary separation programs. Some programs may be offered only in specific areas, and/or at specific times, to respond to particular staffing changes or needs.