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School of Medicine
Dome - The $150 Million Performance-Improvement Initiative
Dome April 2013
The $150 Million Performance-Improvement Initiative
Date: April 15, 2013
Like all health care systems, Johns Hopkins is seeing a flattening in revenue as expenses continue to grow. Every component—managed care, home care, hospital care and physician care—faces reimbursement that is less than core inflation. The Initiative is a plan to add $150 million to $200 million in annual net operating income by June 2016. The additional income is needed so that the institution can preserve its research, education and clinical care missions, invest in its strategic priorities, technology and facilities, and preserve jobs. Plan leaders are Rich Grossi, Johns Hopkins Medicine senior vice president and chief financial officer; Joanne Pollak, senior vice president and general counsel for Johns Hopkins Medicine; and Landon King, executive vice dean for the Johns Hopkins School of Medicine.
What are the key concerns?
• Rising costs associated with the Patient Protection and Affordable Care Act
• Greater risk due to increased employers’ and individuals’ financial responsibility for health care costs
• Decreased funding for Medicare and Medicaid
• Reduced reimbursement rates from private third-party insurers and the introduction of alternative payer arrangements
• Costs projected to rise by 2 percent or more
• A near-zero rate increase for Maryland-based Hopkins hospitals from Maryland’s Health Services Cost
• Review Commission (HSCRC)
• Cuts in National Institutes of Health (NIH) and other research funding