Control finances
While Laret was starting to heal the emotional pains and filling vacancies, he also had to work on healing the financial pains.
“As we started to calm the place down, to move people off the trauma and into the present and thinking about the future, we knew our future was going to depend on getting stronger financially,” he says. “You can’t achieve much if you’re losing money.”
It starts with figuring out where the money was being spent.
“The first thing is, you want to find out who has the checkbook and who has access to your bank account,” Laret says.
In the university setting, departments often submitted recharges against each other, so he implemented actions to control who could submit recharges and in what circumstances they could do so.
He also increased efforts to make sure that the hospital was billing and collecting everything that it was owed to increase the money coming in.
Growth needed to be top of mind, so he started by doing an analysis of where the organization was losing money, where it was making money and what service lines contributed to both of those.
“In a place like this, there are probably 100 different service lines, and you need to look at each one of them and see what’s contributing and what’s not,” Laret says. “Which ones can you grow without too much difficulty? Which ones can you shrink without too much difficulty?”
For example, one of the big problems was the amount of patients coming in on Medicare and Medicaid. Many staffers didn’t realize that the hospital loses a little money on every Medicare patient, a lot of money on every Medicaid patient, and it depends on the commercially insured to make up for those losses.
Laret likens the experience to being Robin Hood in Sherwood Forest, “Because we’re trying to get enough rich people coming through the forest to cover the cost of the poor here, a lot of our leaders didn’t fully understand those economic issues,” he says.
Laret also looked at available benchmarks to see what other hospitals were doing.
“If Stanford Hospital or Cleveland Clinic or New York Presbyterian can provide this service at this cost with these goods and services, why aren’t we doing that?” he says. “ … Benchmarking is obviously important, but customize it to your specific circumstances.”
UCSF is mostly a referral hospital, so it ramped up marketing efforts to increase its referrals by sending staff to educate doctors across the region about its strengths in organ transplants and how it is the leading brain tumor center in the region. He also worked with health plans to make sure that when doctors did refer patients to UCSF, the patient would be covered.
It’s one thing to get more people coming through the doors, but he saw another problem that would affect growth — service.
“You tend to treat people in a fairly consistent way,” Laret says. “And if you tend to treat them in a sloppy way, with mediocre customer service, you’re going to do that for everybody. Maybe you’ll improve for someone really important coming through, but in general, you kind of do things in a consistent way.”
He implemented a patient concierge program to help make the experience more pleasant.
“What has happened, over time, is as we start to treat more and more patients like they’re special, that has become the norm in more areas,” Laret says. “We’re not No. 1 in patient satisfaction in the country, but we’ve come a long way from the bottom quartile to almost the top quartile in patient satisfaction, and that’s really this effort of really focusing on service.”
On top of increases in patient satisfaction, as a result of his efforts, business has grown, as well, and what started as an approximately $60 million loss the year Laret joined became a $70 million gain within five years. Today, the organization is not only breathing on its own, but it’s also running, jumping and enjoying its health as a profitable operation with nearly $1.5 billion in total operating revenue. It’s now also consistently recognized as one of the nation’s top 10 hospitals by U.S. News & World Report — and all of this success is the result of lots of little things adding up to a large change.
“Lo and behold, those things, after awhile, they really start to work,” he says. “Our business in volume has grown over 30 percent in the last nine years. I think it’s fundamentally a result of those kinds of initiatives.”
How to reach: UCSF Medical Center, (415) 476-1000 or www.ucsfhealth.org