Glenn Fosdick, president and CEO of The Nebraska Medical Center in Omaha, has worked in the hospital industry for a long time, graduating from the University of Michigan's hospital administration program in 1976 and managing a few Michigan hospitals along the way. With the way the current healthcare system is shaped, though, he has learned a simple concept that has carried him to success: Don't be stupid and stubborn.
Mr. Fosdick, who has been with The Nebraska Medical Center for more than 10 years, has helped oversee the rise of The Nebraska Medical Center as one of the premier academic medical centers in the nation. U.S. News & World Report ranks it and its co-owned Nebraska Orthopaedic Hospital as the first- and second-best hospitals in the Omaha region, and the hospital is also a "high-performing" organization in nine adult specialties. Mr. Fosdick shares the goals and challenges his hospital has endured this year, how primary care is affecting the hospital and Nebraska healthcare and how all hospital CEOs must avoid the pitfall of "stupid" and remain open-minded to make progress in today's healthcare landscape.
Q: What are some of the biggest goals for The Nebraska Medical Center this year?
Glenn Fosdick: We have been planning for the past three to four years that something was going to change in how we were reimbursed. We certainly recognized it couldn't keep going on the way it was going. After examining our budget and costs using comparative data of 70 other academic medical centers, we set a goal that we would reduce our costs per adjusted discharge by 15 percent within three years. It's a very substantial change, and we've made a lot of progress on it. Our value management, or decrease in expenses, was reduced by $41.5 million. We had to do a number of things that were critically important.
One, do not compromise alignment with medical staff. Two, communication was going to be incredibly important in this process. Rumors are always worse than the truth, no matter how bad the truth is. We had to increase our efforts to communicate with employees. And three, my personal responsibility: Prevent us from doing "stupid." Hospitals have a tendency to "do stupid" in situations like these. I didn't have a lot of work because our people knew what to do. We weren't doing across-the-board cuts because we didn't want to penalize people that were already working hard. Our goal was not to reduce staffing ratios.
Q: What have been some of the biggest challenges you've faced this year?
GF: Particularly in an academic setting, maintaining alignment with medical staff and coordinating priorities is an issue we need to keep on working on. Overall, we found that the hospital leadership across the board really was well-prepared [for our budgetary process this year]. We worked hard to work on issues of accountability. It was not a difficult budget process. They didn't throw their hands up in air — they were a part of the solution instead of a part of the problem.
One of things that makes finances more challenging is you see an overall reduction in hospital discharges nationally. If we reduced our readmissions to where they should be, you also have to increase market share.
But in the end, we were able to cut $9 million in our pharmacy through the utilization and collaboration of our medical staff. We also worked with Methodist Hospital in Omaha, Neb., and we got our physicians to work together and find a combined contract that saved $2 million.
Q: How will healthcare reform impact The Nebraska Medical Center, and in what ways will the hospital prepare for the changes?
GF: There are many things we don't know about health reform. The final outcome, whether it will be overridden by the Supreme Court or other courts, etc., but there are three things we are convinced will occur. First, reimbursement will go down. Second, quality-type expectations are going to go up. This includes everything from readmission rates to increased core measures to customer satisfaction. Third, an increased inpatient volume in hospitals will be treated in an outpatient basis. We also have to assume there are some people that were normally admitted to the hospital that won't be anymore.
This is a time of change in healthcare. Leadership in hospitals, administration and medical staff must deal with it but realize we're in this together. We're all being pushed and challenged. It requires us to look at things differently than historically we have.
Q: The Nebraska Medical Center has been a teaching hospital for the University of Nebraska Medical Center for nearly 14 years. How has this impacted the hospital's overall health goals and results?
GF: It's been positive. We're getting a closer collaboration between the academic physicians and the hospitals. We're looking objectively on what is needed in the community and what the combined clinical and academic needs of the state of Nebraska are.
Q: With many reports discussing a primary care physician shortage forthcoming, how do you see your hospital responding, especially with the UNMC's physician residents and fellows in such close range?
GF: It is a major problem. There are two things that we're being told and agree on. First, you have to find people who are going to practice in rural Nebraska that are from Nebraska. To recruit someone from New York City to come practice in rural Nebraska is somewhat limited. The issue is not rural practice: The issue is rural practicing physicians are essentially on call 24 hours a day, seven days a week. You have to ask, "Is that what you are interested in doing?", and for many physicians, it's not. Second, Nebraska is spread out in small communities, and if you have fewer primary care physicians, maybe we should develop more of the physician extenders (physician assistants, nurse practitioners) who could be affiliated with primary care physicians but could be the person on-hand who can provide basic entry care in the community itself.
Q: According to the U.S. News & World Report, The Nebraska Medical Center is high-performing in nine specialties, including cancer, neurology and orthopedics. What are the keys for a hospital to stay at a high-level of performance in numerous specialties?
GF: I think there's been an overall commitment by our medical staff to improve quality but also to identify what is needed to ensure the physicians can do the best job possible. This includes recruiting the sub-specialties, getting the best equipment and working collectively to create that organizational program. It doesn't happen overnight, and you have to define resources that are necessary.
When it comes to our staff, it's not just one physician. Our high-performing staff is physicians, their supporting staff and the environment that is needed to attract these types of high-quality physicians. We've been fortunate that we have some incredibly talented people here, and in my years of experience, good physicians attract other good physicians.
Q: How do you make improvements in healthcare in Nebraska, especially considering rural areas are so common throughout the state?
GF: We try to identify programs that have not been available historically. It's normal you compete with other local hospitals for cardiac surgeries and other common things. But we are the only program in the state that does heart, liver and kidney transplants. We are one of four hospitals nationally that do small bowel transplants. Our bone marrow transplant is nationally recognized. According to the National Association of Epilepsy Centers, we are a Level 4 Epilepsy Center, providing the most extensive care for epilepsy procedures. We try to find things that we can do that others aren't doing or can't do. That's an important role you have.
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Mr. Fosdick, who has been with The Nebraska Medical Center for more than 10 years, has helped oversee the rise of The Nebraska Medical Center as one of the premier academic medical centers in the nation. U.S. News & World Report ranks it and its co-owned Nebraska Orthopaedic Hospital as the first- and second-best hospitals in the Omaha region, and the hospital is also a "high-performing" organization in nine adult specialties. Mr. Fosdick shares the goals and challenges his hospital has endured this year, how primary care is affecting the hospital and Nebraska healthcare and how all hospital CEOs must avoid the pitfall of "stupid" and remain open-minded to make progress in today's healthcare landscape.
Q: What are some of the biggest goals for The Nebraska Medical Center this year?
Glenn Fosdick: We have been planning for the past three to four years that something was going to change in how we were reimbursed. We certainly recognized it couldn't keep going on the way it was going. After examining our budget and costs using comparative data of 70 other academic medical centers, we set a goal that we would reduce our costs per adjusted discharge by 15 percent within three years. It's a very substantial change, and we've made a lot of progress on it. Our value management, or decrease in expenses, was reduced by $41.5 million. We had to do a number of things that were critically important. One, do not compromise alignment with medical staff. Two, communication was going to be incredibly important in this process. Rumors are always worse than the truth, no matter how bad the truth is. We had to increase our efforts to communicate with employees. And three, my personal responsibility: Prevent us from doing "stupid." Hospitals have a tendency to "do stupid" in situations like these. I didn't have a lot of work because our people knew what to do. We weren't doing across-the-board cuts because we didn't want to penalize people that were already working hard. Our goal was not to reduce staffing ratios.
Q: What have been some of the biggest challenges you've faced this year?
GF: Particularly in an academic setting, maintaining alignment with medical staff and coordinating priorities is an issue we need to keep on working on. Overall, we found that the hospital leadership across the board really was well-prepared [for our budgetary process this year]. We worked hard to work on issues of accountability. It was not a difficult budget process. They didn't throw their hands up in air — they were a part of the solution instead of a part of the problem.
One of things that makes finances more challenging is you see an overall reduction in hospital discharges nationally. If we reduced our readmissions to where they should be, you also have to increase market share.
But in the end, we were able to cut $9 million in our pharmacy through the utilization and collaboration of our medical staff. We also worked with Methodist Hospital in Omaha, Neb., and we got our physicians to work together and find a combined contract that saved $2 million.
Q: How will healthcare reform impact The Nebraska Medical Center, and in what ways will the hospital prepare for the changes?
GF: There are many things we don't know about health reform. The final outcome, whether it will be overridden by the Supreme Court or other courts, etc., but there are three things we are convinced will occur. First, reimbursement will go down. Second, quality-type expectations are going to go up. This includes everything from readmission rates to increased core measures to customer satisfaction. Third, an increased inpatient volume in hospitals will be treated in an outpatient basis. We also have to assume there are some people that were normally admitted to the hospital that won't be anymore.
This is a time of change in healthcare. Leadership in hospitals, administration and medical staff must deal with it but realize we're in this together. We're all being pushed and challenged. It requires us to look at things differently than historically we have.
Q: The Nebraska Medical Center has been a teaching hospital for the University of Nebraska Medical Center for nearly 14 years. How has this impacted the hospital's overall health goals and results?
GF: It's been positive. We're getting a closer collaboration between the academic physicians and the hospitals. We're looking objectively on what is needed in the community and what the combined clinical and academic needs of the state of Nebraska are.
Q: With many reports discussing a primary care physician shortage forthcoming, how do you see your hospital responding, especially with the UNMC's physician residents and fellows in such close range?
GF: It is a major problem. There are two things that we're being told and agree on. First, you have to find people who are going to practice in rural Nebraska that are from Nebraska. To recruit someone from New York City to come practice in rural Nebraska is somewhat limited. The issue is not rural practice: The issue is rural practicing physicians are essentially on call 24 hours a day, seven days a week. You have to ask, "Is that what you are interested in doing?", and for many physicians, it's not. Second, Nebraska is spread out in small communities, and if you have fewer primary care physicians, maybe we should develop more of the physician extenders (physician assistants, nurse practitioners) who could be affiliated with primary care physicians but could be the person on-hand who can provide basic entry care in the community itself.
Q: According to the U.S. News & World Report, The Nebraska Medical Center is high-performing in nine specialties, including cancer, neurology and orthopedics. What are the keys for a hospital to stay at a high-level of performance in numerous specialties?
GF: I think there's been an overall commitment by our medical staff to improve quality but also to identify what is needed to ensure the physicians can do the best job possible. This includes recruiting the sub-specialties, getting the best equipment and working collectively to create that organizational program. It doesn't happen overnight, and you have to define resources that are necessary.
When it comes to our staff, it's not just one physician. Our high-performing staff is physicians, their supporting staff and the environment that is needed to attract these types of high-quality physicians. We've been fortunate that we have some incredibly talented people here, and in my years of experience, good physicians attract other good physicians.
Q: How do you make improvements in healthcare in Nebraska, especially considering rural areas are so common throughout the state?
GF: We try to identify programs that have not been available historically. It's normal you compete with other local hospitals for cardiac surgeries and other common things. But we are the only program in the state that does heart, liver and kidney transplants. We are one of four hospitals nationally that do small bowel transplants. Our bone marrow transplant is nationally recognized. According to the National Association of Epilepsy Centers, we are a Level 4 Epilepsy Center, providing the most extensive care for epilepsy procedures. We try to find things that we can do that others aren't doing or can't do. That's an important role you have.
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