Guidehouse Leads $30M+ Financial Turnaround Initiative at Athens Regional Health System

Challenge

In 2014, after approximately 100 years of operating as a strong community hospital with the most comprehensive medical center in Athens, Georgia, Athens Regional Health System was in cultural and financial distress. Spurred initially by the challenging implementation of its electronic health record, the 350-bed hospital system was struggling with internal crises.

The health system needed to stabilize quickly with new executive leadership to reinvigorate its enterprise, and immediate performance improvement efforts to close its fiscal year projected $29 million/$51 million gap to 5% margin. Additionally, the health system was in talks with Atlanta-based Piedmont Healthcare regarding a potential affiliation.

Solution

First, Athens partnered with Guidehouse to assess and implement performance improvement initiatives, with a focus on:

• An immediate income statement improvement of $15 million during Year One.
• A stretch goal of $30 million per year in income statement improvements after Year One.
• Targeted operational and financial improvement work to address multiple services lines, including revenue cycle, supply chain, pharmacy/lab services, physician enterprise, care management, clinical and operational effectiveness, labor optimization, and human resource benefits/organizational structure.

As part of the performance improvement work, Guidehouse leveraged its robust analytical tools to concurrently evaluate physician coding practices, collections, productivity, and volume statistics. Additionally, Guidehouse provided coaching and mentoring for daily huddles and staffed to demand. The team also utilized its conceptual framework for predictability modeling to assist nurses in understanding the ongoing day-to-day challenges of patient demand and the supply of clinical labor to deliver staffing solutions that provided sustainable cost savings.

The success of this work led to Athens and Guidehouse developing a new project management group to ensure sustainability of the current initiatives and oversee and implement new efforts. In doing so, the health system hired Guidehouse-expert Charles “Chuck” Peck, MD, as its interim CEO.

“With the help of Guidehouse, we pulled Chuck in and he was everything we hoped, plus some. He almost single-handedly turned the hospital around,” said Dr. Sinyard. “Chuck brought new ideas and a positive attitude with a firm provider-centric approach. He knew the history of our organization and the personality of the community, so he could effectively prioritize the right initiatives.”

Over two years, Dr. Peck charged the group with additional initiatives based on future-focused financial and organizational needs. This included hyper-engaging clinicians to ensure they understood and could weigh in on goals, negotiating new contracts, working from the bottom up to ensure staff were in the right roles, and developing metrics to create standardized systems, scoreboards, and processes that are still leveraged today.

Impact

Not only did Athens achieve its projected goal of $30 million in annualized improvements by July 2015, it also hit its stretch target of $33 million in annualized income for FY 2017. Additionally, the organizational and financial improvement initiatives led to a smooth transition when Piedmont Healthcare acquired Athens in 2016.