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Finding Financial Opportunities
Savings throughout Johns Hopkins Medicine come in many guises.

blank Jack Grinnalds
Of the $2.2 million in savings in Facilities Management, $1.2 million was from utility savings, says Jack Grinnalds.

It’s no small task being told to cut an operating budget by 5 percent in just six months, as was the mandate at the school of medicine’s facilities department and other Hopkins operations. But rather than panic, administrators saw an opportunity for both vendors and staff to work smarter.

“I think a lot of people are just grateful to have jobs in this economy,” says Jack Grinnalds, the school of medicine’s senior director of facilities management, who needed to find $2.2 million in savings to make his numbers. “Everyone knows somebody who is unemployed or having issues. Everybody is pitching in and willing to help out. It’s different this time from recessions in the past.”

Grinnalds and other administrators are cutting labor costs by reducing or eliminating agency and outside staffing services. For Grinnalds, that meant bringing some custodial services in-house, including those in his offices at 2024 E. Monument St. “We did not add any staff,” he says. “Everybody works a little harder. That includes hauling more trash from your cubicle.” By reducing trash pickup from five days to two, Grinnalds not only eliminated agency services, he also eliminated 11 full-time positions through attrition.

Similarly, Howard County General Hospital is spending on average $130,000 a month less after motivating enough part-time nurses to fill more than 30 full-time equivalent positions. The incentives included giving out chances to win a cash raffle and eliminating the one-year waiting period for tuition reimbursement. The savings, now projected at $700,000 for the fiscal year, came from the reduction in the use of agency nurses that cost 70 percent or more than full-time employed staff.

While these labor adjustments provide large immediate savings, it’s the found pocket change and pin money that may provide long-term fiscal health. Dollars are being found in areas such as procurement and reimbursement.

Take co-pays, which many hospitals treat like those take one/leave one pennies at a cash register. No more, says Howard County General’s chief financial officer, Jim Young. “It could be $10 or $25, but we’ve begun to collect co-pays during the initial contact with a patient, in either the outpatient department or the emergency department as we’re registering them,” he says. “It eliminates all the back-end work of tracking down that payment. It sounds small, but in aggregate, our goal is to collect $1 million, and we’re well on our way to doing it.”

At Johns Hopkins Bayview Medical Center, incoming president Richard Bennett says they’re examining everything from copier use to convincing staff to go with one PDA instead of having several pagers with multiple carrying costs. “We’re looking at phone lines desk by desk, number by number,” says Bennett.

Others are using technology to generate savings.

University IT Director Deb Contrella projects annual savings of between $3 million and $4 million by 2011 when the implementation of Hopkins’ new telephone system across the East Baltimore, Bayview and Homewood campuses is complete.

Procurement Director Betty Gibula, who oversees a $400 million budget, has switched from inch-thick paper vendor bids to an e-Bay-esque auction service called MedPricer that vets vendors and has them competing against each other [see “Playing It Close to the Chest,” Dome, April 2009]. Gibula says MedPricer has cut procurement costs by 20 percent overall and by 28 percent on capital items for the new clinical buildings.

If anyone is worried that all these cuts may affect patient care, it’s worth noting that spending money on patient safety and efficiency is a cornerstone for staying on budget. Bayview’s Bennett proudly notes that “we have several ICU units across the system, including our surgical ICU, that have been without central-line bloodstream infections for the past year.” That cuts down on length of stay and “saves hospital resources and helps the hospital financially. Safer care really impacts our budget.”   


—Mat Edelson

 

 

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