University of Miami: Smart Hospital Growth, Better Patient Care
Client: University of Miami Miller School of Medicine
Challenge: Achieve smart growth through acquisition, and improve healthcare for patients.
Solution: CSC provided guidance before and during a key acquisition, and continues to deliver revenue cycle and service line planning services.
Results: A successful acquisition of a 560-bed hospital, and improved business processes and operational efficiency.
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The University of Miami (UM) Miller School of Medicine is at a critical point in its history. It is the only academic medical center in South Florida, and is focused on attracting outstanding leadership talent, growing in size and impact, and establishing itself as a premier health system.
To that end, it acquired Cedars Medical Center in December 2007, marking UM’s first time owning and operating a full-scale hospital. This move signaled entry into a new era for the medical school, which turned to CSC to provide guidance before and during this key acquisition.
The relationship has now grown, with CSC providing revenue cycle and service line planning services to support the university’s goals to expand and improve patient care in the community.
Better Care for Floridians
Every year, the university’s 800 faculty physicians have more than 1 million patient encounters in both primary care and 30-plus specialties. In December 2007, the school bought Cedars Medical Center for $260 million. Now called the University of Miami Hospital, the 560-bed, full-service hospital has a net operating revenue of $190.6 million. The acquisition was important for the university, as it exemplified UM’s commitment to bring more university-based healthcare to Floridians.
One year earlier, the university employed CSC’s operational consulting services to assist with due diligence for the acquisition. Specific areas of CSC’s involvement included:
- Assessing key clinical processes
- Evaluating physical capacity
- Examining the potential for outsourcing laboratory services
- Assessing revenue cycle functions
Conducting market basket assessments around purchasing opportunities in medical/surgical supplies and pharmacy
Kerry Shannon, partner in CSC’s Global Business Solutions, says, “All of CSC’s work was related to helping the university make the best possible decisions regarding the potential acquisition.”
Says the CFO of the medical school, Tom Fitzpatrick, “We simply view CSC as a logical extension of the medical center finance function. They make us ‘deeper’ — bringing the capability to throw lots of high-quality talent at critically urgent tasks without taking our eyes off the rest of our business. And they make us ‘wider’ — filling in knowledge gaps when we hit unfamiliar territory.”
Shannon helped identify space in Cedars that was underutilized and recommended programs that UM could implement there. Other recommendations included cutting down on agency nurses to reduce costs and improve profits. Shannon notes that due diligence is about mitigating risk, and its results are generally difficult to quantify. “However, UM was successful in acquiring the facility and has therefore grown tenfold in terms of bed numbers, a common healthcare indicator,” Shannon explains. “The process allowed CSC to share knowledge across most of the enterprise.”
Planning for Future Growth
In addition to the acquisition consulting services, CSC has also assisted UM with several key operations improvement and planning initiatives. CSC worked with UM to develop multiple business plans, the most complex being for a Breast Cancer Center. CSC worked with UM in formulating assumptions related to disease incidence, the competitive landscape, future treatment options, financial return and facility requirements. “Multiple scenarios were constructed and evaluated in what was an exhaustive effort over several months,” Shannon explains.
CSC also provided interim centralized business office management to the University of Miami Medical Group. CSC was retained by the University of Miami Health System to provide staff augmentation assistance to the executive director of Strategic Operations Management for the development of a Contact Center business plan and a process for optimizing clinic utilization. The development of the Contact Center involved client staff in many areas, including the chief medical officer.
Shannon notes that CSC’s Health Services Delivery Revenue Cycle practice is currently engaged in a multi-phased credit balance project. Consultants from that practice have been working on this project since September 2007. “In the end, we will have saved or recaptured quite a bit of money for the client and, more importantly, trained all of their staff on best practices going forward,” Shannon says.
“The university is a terrific client to work with,” adds Shannon. “Their efforts will absolutely improve the quality of patient care in this region and CSC is very proud to play a part in this achievement.”