News Media Home | Hopkins Medicine Home
October 31, 1994
Media Contact:Gary Stephenson
Phone: (410) 955-5384
E-mail:
Gstephen@welchlink.welch.jhu.edu
The Johns Hopkins Hospital is launching formally a reengineering process this
month that is expected to involve hundreds of employees in a major rethinking
of the way the nation's most highly rated hospital does business.
Pilot reengineering projects already in the works or recently completed are
expected to save more than $1 million per year in operating room expenses and
other services. One division alone projects savings of $5.5 million.
Inspired by these successes, achieved without layoffs, the Hospital will look
at every aspect of its operations to improve quality and cut costs while
minimizing any potential loss of jobs. The Hospital will be assisted by the
health-care management consulting firm APM Inc. of New York, but Hopkins
officials emphasized that they will control the reengineering process. "This is
the hardest job we will ever do as an organization, but it is one on which our
mission and our 7,000-person workforce depend," said James A. Block, M.D.,
president and CEO of The Johns Hopkins Hospital and Health System.
"Reengineering focuses on the issues of access and cost, which are uppermost on
everyone's agenda, along with our continued ability to recruit, train and
retain a superior force of doctors, nurses, and supporting staff."
Block and other Hospital officials acknowledge that "reengineering" frequently
is regarded as synonymous with staff cutbacks in the public's perception. But
they stress that Hopkins' goal is to avoid or reduce to a minimum the loss of
any jobs.
"Johns Hopkins always has been a leader, not a follower, in health care, and
we intend to apply that century-long record of innovation to the process of
reengineering no less than to clinical care," said Block. "Reengineering will
be driven by the values that have been fundamental to Hopkins since its
founding--values such as individual dignity, collegiality, high quality,
innovation, and commitment to diversity."
"Like academic medical centers everywhere, we face the task of staying
competitive in an aggressive local marketplace while carrying built-in costs
related to education, biomedical research and indigent care that other
hospitals don't have," said executive vice president and chief operating
officer Gennaro J. Vasile, Ph.D.
"Insurers may be willing to pay some premium for Hopkins quality, but we also
know that we must lower the differential. Reengineering is an opportunity to
improve our competitive positioning while enhancing quality and service. We are
determined to continue to provide the highest quality and the best possible
value for patients and insurers alike."
Diane M. Iorfida, senior vice president for human resources and organizational
effectiveness, said the reengineering effort will be led by a steering
committee headed by Vasile and including representatives of senior management,
hospital physicians, nurses and house staff.
In addition, work groups reporting to the steering committee in the areas of
Clinical Goals, Customer Service, Care Delivery, Service Delivery and Financial
Goals will include all categories of employees. They will set goals for quality
and cost improvement by the end of November. In the following six months,
design teams consisting of employees, physicians and volunteers will explore
ways to meet the goals. In the third phase, from May until July, the Steering
Committee will adopt recommendations and begin planning how to implement
them.
Carrying out the recommendations will take place over three to five years,
Iorfida said. Reengineering as a process will become an enduring feature of
hospital administration at Johns Hopkins. "This is the way we want to manage,
by constantly reinventing and refining ourselves. We will be improving all the
time."
Iorfida added: "We want to emphasize that the creativity and insights of every
employee will be invaluable as we go through this process. There will be
literally hundreds of employees involved in the design teams. We are committed
to use cross-training and retraining to maximize the contributions and
potential of every employee. This is not a zero-sum game where one person's
gain will be another's loss."
Iorfida said the Hospital administration has already notched several major
successes from initiatives that illustrate Hopkins' approach to
reengineering.
In one of the most dramatic examples, the Department of Orthopedic Surgery is
projecting that it will save $5.5 million over the next five years from a
decision to whittle the number of vendors serving the department from nine to
three. In exchange for making the short list, vendors agreed to lower the
prices they charged Hopkins.
After Richard Stauffer, M.D., the director of the department, informed the
administration of the new arrangement, the administration decided to launch a
pilot OR (operating room) incentive program, which awards groups of employees
up to 50 percent of the money they save by suggesting workable proposals. The
goal is to achieve a 3 percent reduction per case in OR costs.
In the Wilmer Eye Institute, three units--emergency, same-day surgery, and
inpatient surgery--were reengineered into one. Costs have been reduced by more
than 20 percent since the July 1992 merger.
Nurses in the center had to acquire new skills in order to tackle a greater
variety of tasks in their new unit, which has been renamed the Wilmer Nursing
and Trauma Center. Although some positions were lost to attrition, no layoffs
were necessary.
As an example of what retraining and cross-training can mean, Iorfida points
to the medical records department, where nearly 130 employees are embarking on
a five-year program to earn their accreditation as clinical documentation
specialists and technicians. Many of them are now, essentially, file clerks.
The retraining and upgrading will be accomplished without layoffs.
Iorfida says that reengineering will build on earlier quality initiatives at
Hopkins. "Quality improvement means making gradual improvements over time," she
said. "The difference between quality improvement and reengineering is the
difference between taking baby steps and a quantum leap. Reengineering moves a
lot faster, and the results are a lot bigger in terms of magnitude."