Case Study – Rural Regional Medical Center

Regional Medical Center Ready to Close Its Doors Rallies with Huge Success

The Challenge

A rural Regional Medical Center was the only local hospital that was 2.5 hours from the closest airport. Rising cost and declining reimbursements caused them to be operating in the red. For years they fought to keep the doors open, but it was a losing battle. Everyone was exhausted. Morale was dropping. Turnover was high. And now they were forced to consider selling. If they did, the impact on the community would be devastating. People would have to drive 2 hours to get essential care.

In the first 6-8 months…

  • RN Travelers were reduced from 25 to 7, resulting in reduced costs (eliminated in the following year)
  • Quality and patient-satisfaction scores improved, so reimbursements rose
  • Turnover and vacancies declined
  • The medical center made a profit of $3M instead of a forecasted loss of $3.5M – they were operating in the black for the first time in years!

In the second year…

  • The Regional Medical Center ranked near the top for all magnet hospitals (the top 500 hospitals in the United States) based on patient-care standards.
  • Hospital and all clinics successfully tested for Meaningful Use, generating $1.5M in reimbursements
  • The Medical Center was recognized by Health Grade as being in the top 50 hospitals in the country for safety
  • No turnover in leadership positions and overall increase in employee retention

Based on their new purpose to save the hospital and community…

  • Senior Leadership made critical decisions faster than ever before
  • Employees had the safety to surface problems that they had previously hid
  • People across the organization were engaged, innovative, and readily took ownership to ensure the medical center’s survival
  • Meeting times were greatly reduced and effectiveness increased
  • Middle Managers stopped blaming Senior Leaders and took initiative for resolving cross-functional breakdowns and improving operational excellence
  • Most importantly… people were unified and believing again!

Key to Success

When we arrived, the mood was somber, and it was clear they needed to make a critical choice. The key to creating a B STATE Strategy Execution Roadmap is to create a non-negotiable sense of purpose, so we posed the one question the group needed to answer, “Are you ready to sell or are you committed to survive?” We made it clear there could be no middle ground. They had to answer one way or the other.

The room was dead silent. Then one of the more senior leaders started, “Selling would literally kill our community. I am totally committed to making this center survive. I see no other option.” One after another, leaders began to chime in with the same response. The energy was built into a unified chorus. Around this single rallying point, the team had come back to life!

B STATE Approach

Over two days, the extended leadership team implemented our Breakthrough Leadership Team System where they aligned behind a clear purpose, priorities, and new expectations, including:

  • A unified purpose statement: “To preserve our Medical Center as a comprehensive, independent, community-driven health system to optimize access to quality healthcare for patients in the communities we serve.”
  • A set of New Habits of Collective Execution that demonstrated their new commitment both together and individually
  • Agreed on and took shared ownership for the 8 highest leverage projects
  • Created B STATE Team Agreements to proactively surface and recover when one or all of them fell back into old habits
  • Created a forum to rally 45 department directors into a unified cross-functional team that would drive improved care and cost reduction at the same time

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