St. Peter's Health Transforms Operational Performance, Saves $25.5 Million

Challenge 

In 2017, St. Peter’s Health found itself at a critical juncture in its 130-year history. The 99-bed acute care hospital in Helena, Mont., had recently welcomed a new CEO and was beginning work to implement a new strategic vision, which included improving access to care, reducing wait times, and adding new services.

The system’s financial health was strong, with more than 300 days’ cash on hand. However, St. Peter’s battled declining market share and revenue, and leaders anticipated more cuts in commercial and Medicaid reimbursement. 

As the need for capital infrastructure improvements continued to intensify, St. Peter’s CEO Wade Johnson knew the hospital would have to realign its cost structure in order to make the critical investments that would allow the hospital to best meet the needs of the communities it serves.

Solution

In late 2017, St. Peter’s engaged Guidehouse to provide a rapid assessment of opportunities for performance improvement and operational transformation in nine areas: payer contracting, revenue cycle, physician enterprise, corporate services, inpatient cost to treat, supply chain, pharmacy, laboratory, and hospital enterprise.

Guidehouse uncovered $14.7 million in savings opportunities within two months, and in January 2018 presented a road map for performance improvement to the St. Peter’s leadership team and board of directors. St. Peter’s then partnered with Guidehouse on several initiatives to improve the value of care by increasing quality and reducing costs, resulting in a $25.5 million savings, including $9 million in 340B savings alone. 

Impact