Other environmental context local competition

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Other Environmental Context Local Competition According to interviewees, the hospital operates in a fairly competitive market, competing with several neighboring hospitals; however, it is over 30 miles from the nearest competing facility. Interviewees noted that long-term care services are extremely competitive, as patients have many choices for this type of service in the surrounding areas. Interviewees noted that Suntown’s commitment to quality improvement (QI) is believed by interviewees to give them the competitive edge over other hospitals and long-term care facilities that struggle with QI initiatives, such as Six Sigma. The CEO noted that the waste reduction from Lean reduces time spent across all business processes and reduces costs, giving the hospital the ability to do things for customers that competitors cannot afford. Funding and Payers Similar to other public hospitals, the vast majority of income is derived from patient services, in addition to levies and funding from the community. Approximately half of the total revenue comes from outpatient services. Medicare and Medicaid are major sources of revenue with Exhibit 4.3. Characteristics of the Critical Access Hospital Factors Characteristics Organizational experience with Lean Some experience Geographic location West Regional density Small rural Type of hospital Critical-access hospital (CAH) Acute-care beds 25* Teaching hospital No Physician employment model Staff Use of an external Lean consultant Yes * Includes swing beds that can be used for either acute or skilled nursing facility-level care.
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136 Medicare, accounting for 98 percent of the acute-care payer mix and 44 percent of the outpatient mix in 2010. Medicaid accounts for about 70 percent of long-term care revenue. Lean and Quality Improvement at the Organization In this section, we discuss the history of Lean and QI at Suntown Hospital. Exhibit 4.4 outlines the overall timeline for Lean initiatives at the hospital. The specific activities noted in the timeline are discussed throughout this report. History of Quality and Efficiency Improvement Efforts at the Organization According to one senior executive, the hospital has a long history of participation in QI activities. However, nearly all interviewees who worked there before Lean noted that its QI efforts before Lean had been largely informal and unstructured. These interviewees also described Suntown’s previous QI activities as having been “disorganized,” “reactive,” and “ineffective.” Coordination of QI across activities had been very loose, and QI had been instituted as a result of an issue or problem. With the hiring of a new CEO in 2000, Suntown began a more formalized implementation of QI. The hospital is governed by an elected Board of Commissioners and a CEO. The quality team reports to the CEO but has no leader. Its members include system leaders, performance leaders, and process leaders, who are all regarded as equal members. The quality team supports the
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  • Fall '17
  • Shankar Purbey

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