The Client Challenge
Lawrence General Hospital (LGH), an essential facility serving a diverse and vibrant community, was in financial peril as a result of the pandemic and pre-existing financial challenges (structural reimbursement issues and market pressures) that threatened access to equitable, locally based care. Capacity constraints, state mandates to limit procedures, and labor and other expense pressures due to the pandemic led to accumulating losses, placing at risk the organization’s ability to reliably deliver care.
Challenges centered upon:
- The imperative to provide essential yet underfunded services
- A market environment that challenged equitable care delivery
- A strained clinical and non-clinical workforce
Navigating to Next: The Solution
Partnering with Chartis, LGH set an annual margin improvement target of $20 million, leveraging revenue and expense drivers. Based on immediate financial pressures, including risk of breaching debt service covenants, LGH committed to an aggressive goal of realizing most opportunities within the first 9 months. This decision incorporated the need to stay ahead of the reality of inadequate reimbursement for essential clinical services LGH provides to the diverse community.
The first step in the comprehensive approach was to embed Chartis’ deeply experienced senior subject matter experts into daily operational discussions with the LGH management team and front-line staff. This intensive review identified achievable ways to advance improvements in workforce management, the provider enterprise, information technology, and other non-labor expenses. The team also leveraged deep strategy expertise to evaluate far-reaching opportunities (including clinical service rationalization, partnerships, and asset restructuring) that would lead to a sustainable position. Physician and employee engagement was essential to the delicate nature of the financial recovery.