I recently submitted and received approval from our Board for next year’s budget. As part of the communication, I sent the following email to all employees:
Our Board of Trustees met today and approved the Fiscal Year (FY) 2011 budget. About a year ago, I sent a memo to all staff offering context and important details about the FY 2010 budget and I have decided to continue that practice again this year.
Current Environment
I want to begin by reviewing the context in which the FY2011 budget has been developed. At Town Hall Meetings and in other venues, I have talked and written about the impact of current economic conditions on GHS and our operating margin. Here are some of the facts we have discussed:
The United States has experienced the deepest recession since the Great Depression of the 1930s and most signs of recovery this year have been sporadic and sluggish.
Financial and housing markets have seen dramatic declines and have only achieved partial recoveries.
Unemployment across the country continues at levels not seen for nearly three decades.
In our own state, unemployment is nearly 11 percent; and that places South Carolina’s among the very highest unemployment rates in the country. The majority of people in South Carolina receive health care coverage from their employer.
At GHS, we have continued to experience lower than projected inpatient volumes and shifts in payor mix including rising charity care and bad debt. These changes represent a new normal for GHS and we now project flat inpatient volumes and modest growth in outpatient volumes over the next few years.
In FY 2010, GHS management and staff have responded to these challenges by seeking opportunities to improve efficiency and reduce costs and I know that we will continue to face and respond to similar challenges in the coming year.
GHS Strategy and 2011 Goals
Our new fiscal year starts on October 1st and these factors impact strategy, goals, and the budget for the coming year. You may remember that in FY 2009 our Board of Trustees approved changes to our vision and mission statements that reflect the strategic direction that GHS has been following for several years.
In 2011, we will move forward with selected strategic initiatives that are key to our long-term strength as an important health resource for our community. These include expanding access to primary care through our physician network, investing in clinical expertise, programs and information technology, and supporting progress on the University of South Carolina School of Medicine – Greenville expansion.
In 2011, our organizational goals relate to the six GHS Pillars of Excellence. These are:
People – We work to transform health care, measured by our annual staff survey.
Service – Patients and families are the focus of everything we do, measured by our patient surveys.
Quality –.We provide right care at the right time and in the right place, measured though CMS All Care Measures, Hand Hygiene and Culture of Safety data.
Growth – We develop our System to meet the needs of our community, measured by net revenue and numbers of new patient visits.
Finance –We responsibly direct our resources to support our mission, measured by our operating margin.
Academics –We educate to transform health care, measured in 2011 by achieving preliminary accreditation of the USCSOM – Greenville.
In developing any budget, leadership must balance the future and strategic priorities of our health system with the current needs of the organization. This year was no exception. In addition to the strategic initiatives described above, we identified two additional budget priorities: 1) minimizing costs to the community while budgeting an operating margin that maintains financial stability; and 2) protecting and growing jobs.
More than ever before, this year’s budget process benefited from the additional input and involvement of our physician leaders/clinical chairs and campus presidents who considered strategic system priorities and helped make tough decisions about a wide range of issues including capital investments, staffing levels, and improved integration of services.
For many of the reasons I’ve already described, the FY 2011 budget reflects some difficult decisions which will touch each of us as employees.
The budget I submitted provides for no across-the-board merit increases in 2011. This applies to all eligible employees, physicians, senior leadership and myself. Funds will be made available for market adjustments and to support employee promotions to new positions. It may be worth noting that GHS continues to be market competitive in its employee compensation practices.
We will maintain a comprehensive and competitive benefits program; however, the cost of benefits will rise for employees at a pace that is lower than the national average. For example, insurance premiums will increase an average of 4% and co-pays and deductibles will increase slightly.
In making these decisions a theme emerged around shared sacrifice to protect jobs. I want you to know that the combined effect of these decisions equals nearly 260 positions protected. I understand that these budget decisions will have a personal impact for you and your family. I encourage you to consider the many colleagues whose jobs have been protected as you think about the implications of this budget on your individual situation.
Our Board of Trustees met today and approved the Fiscal Year (FY) 2011 budget. About a year ago, I sent a memo to all staff offering context and important details about the FY 2010 budget and I have decided to continue that practice again this year.
Current Environment
I want to begin by reviewing the context in which the FY2011 budget has been developed. At Town Hall Meetings and in other venues, I have talked and written about the impact of current economic conditions on GHS and our operating margin. Here are some of the facts we have discussed:
The United States has experienced the deepest recession since the Great Depression of the 1930s and most signs of recovery this year have been sporadic and sluggish.
Financial and housing markets have seen dramatic declines and have only achieved partial recoveries.
Unemployment across the country continues at levels not seen for nearly three decades.
In our own state, unemployment is nearly 11 percent; and that places South Carolina’s among the very highest unemployment rates in the country. The majority of people in South Carolina receive health care coverage from their employer.
At GHS, we have continued to experience lower than projected inpatient volumes and shifts in payor mix including rising charity care and bad debt. These changes represent a new normal for GHS and we now project flat inpatient volumes and modest growth in outpatient volumes over the next few years.
In FY 2010, GHS management and staff have responded to these challenges by seeking opportunities to improve efficiency and reduce costs and I know that we will continue to face and respond to similar challenges in the coming year.
GHS Strategy and 2011 Goals
Our new fiscal year starts on October 1st and these factors impact strategy, goals, and the budget for the coming year. You may remember that in FY 2009 our Board of Trustees approved changes to our vision and mission statements that reflect the strategic direction that GHS has been following for several years.
In 2011, we will move forward with selected strategic initiatives that are key to our long-term strength as an important health resource for our community. These include expanding access to primary care through our physician network, investing in clinical expertise, programs and information technology, and supporting progress on the University of South Carolina School of Medicine – Greenville expansion.
In 2011, our organizational goals relate to the six GHS Pillars of Excellence. These are:
People – We work to transform health care, measured by our annual staff survey.
Service – Patients and families are the focus of everything we do, measured by our patient surveys.
Quality –.We provide right care at the right time and in the right place, measured though CMS All Care Measures, Hand Hygiene and Culture of Safety data.
Growth – We develop our System to meet the needs of our community, measured by net revenue and numbers of new patient visits.
Finance –We responsibly direct our resources to support our mission, measured by our operating margin.
Academics –We educate to transform health care, measured in 2011 by achieving preliminary accreditation of the USCSOM – Greenville.
In developing any budget, leadership must balance the future and strategic priorities of our health system with the current needs of the organization. This year was no exception. In addition to the strategic initiatives described above, we identified two additional budget priorities: 1) minimizing costs to the community while budgeting an operating margin that maintains financial stability; and 2) protecting and growing jobs.
More than ever before, this year’s budget process benefited from the additional input and involvement of our physician leaders/clinical chairs and campus presidents who considered strategic system priorities and helped make tough decisions about a wide range of issues including capital investments, staffing levels, and improved integration of services.
For many of the reasons I’ve already described, the FY 2011 budget reflects some difficult decisions which will touch each of us as employees.
The budget I submitted provides for no across-the-board merit increases in 2011. This applies to all eligible employees, physicians, senior leadership and myself. Funds will be made available for market adjustments and to support employee promotions to new positions. It may be worth noting that GHS continues to be market competitive in its employee compensation practices.
We will maintain a comprehensive and competitive benefits program; however, the cost of benefits will rise for employees at a pace that is lower than the national average. For example, insurance premiums will increase an average of 4% and co-pays and deductibles will increase slightly.
In making these decisions a theme emerged around shared sacrifice to protect jobs. I want you to know that the combined effect of these decisions equals nearly 260 positions protected. I understand that these budget decisions will have a personal impact for you and your family. I encourage you to consider the many colleagues whose jobs have been protected as you think about the implications of this budget on your individual situation.
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