September 12, 2003

Strategic planning spotlight: Expense Management Task Force

Since the MGH embarked on an intensive strategic planning effort several months ago to determine the future direction of its clinical programs, members of seven task forces have been meeting, planning and preparing to make preliminary recommendations to the Strategic Planning Steering Committee. Hotline will be highlighting the work of some of these task forces during the next several months.

The main goal of the Expense Management Task Force is to evaluate opportunities to contain costs across all departments throughout the hospital. According to Jean Elrick, MD - senior vice president for Administration, who co-chairs the Expense Management Task Force with Sally Iles of MGH Primary Care - the task force is developing a plan to cut $15 million from the MGH cost base for fiscal year 2004 and reduce the hospital's cost base by $75 million during the following five years.

"Cost containment is done at the hospital all the time at an individual level and at the department level," Elrick says. "The goal of this task force is to look for opportunities that might be missed because staff are so busy and have focused on cost containment in their own departments."

With a multidisciplinary membership, the task force is focusing first on a variety of expense management opportunities, such as standardizing products, evaluating pharmacy needs, looking at inpatient ancillary utilization and reviewing role groups to facilitate patient flow.

The 22-member task force is looking for both short-term and long-term possibilities for cost containment. "Some of our recommendations will be straightforward and can be done right away, while other recommendations will be for implementing entire processes that will become a part of the way we do business," says Elrick.

While members of the task force are developing their recommendations, they also understand that a great deal of work in expense management has already been done and continues on a daily basis. "We know that people throughout the hospital do their best all the time to reduce expenses, and as a result, the hospital is doing well financially compared with other institutions," says Elrick. "However, we won't be able to keep doing well if we don't plan for the future. Because of added outside pressures, such as the downturn in the economy and cuts in reimbursement, we need to evaluate our position thoughtfully and thoroughly, which is the main goal of this entire strategic planning effort."

The task force members have already developed a broad range of ideas for expense management and currently are evaluating their feasibility. Some examples - both large and small - include creating an in-house dictation service to eliminate using multiple agencies for these services; reducing the use of courier services; decreasing the catering service needs for meetings; expanding computer order entry for diagnostic imaging tests; and implementing a water filtration system to eliminate the use of bottled water.

The task force also is looking for expense management ideas from the hospital
community at large. "This is a collaborative process," says Elrick. "We want everyone's input to find creative ways to better manage our expenses. This will be an ongoing process. If we don't find ways to reduce costs now, it will affect us drastically in the future."

Any employee is welcome to submit ideas to the Expense Management Task Force by visiting http://is.partners.org/mghstrategicplan or by sending written ideas through interoffice mail to the Expense Management Task Force, Bulfinch 240.