Strategic Intent #5 - Resource Utilization and Cost Control:
Community Hospital will provide value to our community by delivering quality care through vigilant resource utilization and expedient service delivery, costing less than half of our Northern California peer hospitals while ensuring long-term availability of our services.
Key Metrics:
- Average cost per stay will be less than that of half our peers.
- Implement a pricing strategy that places CHOMP at or below the 25th percentile of peer hospitals on a line-item charge basis.
- Achieve annual operating margin of 4.5 percent.
- Maintain A+ bond rating from Standard and Poor's.
Strategic Initiatives:
- Implement cost management plan related to benchmarking, identify opportunities, and make data-driven budgeting decisions for the 2010 budget year.
- Update the strategic pricing plan by the first quarter of each year and implement it annually, concurrent with the budgeting cycle, to include hospital-based physician fees in 2009
Why This Is Important:
Our ability to serve our patients depends on their ability to pay for our services, either directly or in combination with their insurance provider. We know that healthcare is not inexpensive, but our commitment to our community is to be less costly than half our peer hospitals in our region.
Achieving this goal is increasingly challenging because of a number of factors. Payers are demanding that CHOMP provide more and higher-quality services for less cost. Our patients and government and private payers are demanding price and quality transparency. Employers, in order to control healthcare benefit costs, are increasing employees' share of healthcare costs or dropping the benefit altogether, giving employees an ever-greater interest in the cost of their care. Lastly, unfunded government mandates like seismic requirements, staffing ratios, and charity care and collection limits further challenge us to do more with less.
Our ability to serve our patients depends also on our continued ability to fund operations and maintain and upgrade the necessary technology, equipment, and facilities. Demonstrating and maintaining financial strength and stability, as judged by an independent authority, provides assurance to all of our stakeholders that Community Hospital will be able to meet future challenges in a rapidly changing economic environment. One-third of the state's hospitals continue to lose money each year, and almost half had operating margins equal to Standard and Poor's ratings below investment (junk) level in 2005, seriously threatening their services to their communities. In addition, 28 California hospitals closed from 2001 to 2005. Our community relies on us to make sure these financial problems do not become a reality at CHOMP.
