A Measure of Success

For one hospital, diligent performance measurement and relationship enhancement adds up to a Malcolm Baldrige award.

Hard work does, indeed, pay off – at least as far as the folks at Advocate Good Samaritan Hospital (Downers Grove, Ill.) are concerned. For the last six years, the hospital’s supply chain department – led by Peter Bury, vice president of finance, and Kathy Fermo, manager of materials management – has prioritized service and health outcomes. The effort has facilitated stronger relationships between supply chain and its physicians, associates and volunteers, leading to financial growth and better patient outcomes. Last year, the hospital was one of seven organizations – and the only healthcare institution – to receive a Malcolm Baldrige National Quality Award, an award sponsored by the U.S. Department of Commerce. (It should be noted that in 2010, the hospital also earned the State of Illinois Lincoln Gold for Performance Excellence award.)

Bury, who has been with Advocate Good Samaritan since 2001, oversees materials management, financial and budgeting functions and the revenue cycle (e.g., patient access, health information management and patient financial services). Fermo, who joined the organization in 1999, oversees “a defined, systematic process of receiving and distribution for essentially everything that comes into the hospital,” she says. This includes validating all supply and patient care equipment orders for accuracy, as well as oversight of inventory, fleet management and budget formulation. Recently, she was instrumental in installing an automated supply cabinet system.

Measuring up
Attaining the Malcolm Baldrige award “has been a six-year journey,” says Bury, noting that his team began by taking stock of how the organization measured up to the others in the Advocate Healthcare system. “We looked at what we needed to do to survive in the industry, move market share, and improve and enhance the patient, physician and associate experience.” From that evolved the hospital’s G2G program: From Good to Great. “Our first focus was service and health outcomes,” he explains. “We then became interested in the Malcolm Baldrige process. The hospital applied for the award in 2007 and received a valuable feedback report. For Bury and Fermo, this was but a springboard. “We used this feedback as an opportunity to identify our core competency, which was to build loyal relationships with our patients, physicians, associates, volunteers and the community at large. This has been a huge driver for our organization.”

In addition, the hospital focused on six key performance areas:

  • Health outcomes.
  • Associate engagement.
  • Patient satisfaction.
  • Physician engagement.
  • Growth.
  • Funding the organization’s future.

“We set annual goals [for improvement] within each of the six performance areas,” says Bury. The goals, which are deployed systematically from the executive team to the management level, are specific, measurable and objective, he points out. “They [look at much more than] ‘Are you doing your job?’ You can’t improve that which you don’t measure. Our chief executive officer at Advocate has said that first and foremost, we are a clinical enterprise. If we do the clinical piece right, and build loyal relationships, this will lead to more engaged physicians and more loyal associates and patients.”

“Superior clinical outcomes and service lead to financial growth, which leads to better financial performance,” adds Fermo. And the measurement process is transparent, she notes. “Everyone is informed of the organization’s strengths and opportunities for improvement, [as well as] each leader’s performance on assigned goals. From a materials management standpoint, measuring up is about data utilization, she says. “We utilize data from our automated supply towers, which tells us whether our equipment and products are being used appropriately. The ability to communicate this information to physicians, nurses and staff throughout the hospital helps us drive waste out of the system,” she explains.

Whereas price and service have traditionally been the top contracting issues for Fermo, today her department focuses largely on engaging vendors on issues such as product utilization, in an effort to drive waste out of the system, she points out. “This leads to better patient care and an overall positive patient/stakeholder experience,” she says. “Departments within the hospital are interdependent. They are dependent on my moving materials throughout the hospital efficiently. Systematic communication is critical to efficiency.”

Satisfaction pays off
Fermo stands firm that “when everyone [at the hospital] works well together, this impacts patient and associate satisfaction.” For that reason, systematically they utilize a series of evaluations for customer, physician and staff input. “This has been an amazing process,” says Fermo, noting that the people within the organization “truly impact our ability to provide an exceptional experience marked by superior patient outcomes, service and value.” For instance, Fermo’s department is evaluated annually through a customer survey. “The survey identifies potential issues (everything from phone etiquette to assessing whether products are getting to the right place in a timely manner),” says Bury, “and Kathy’s scores have always been very high.”

Not only does the hospital administer the surveys, its supply chain executives learn from them. “Five years ago, we didn’t measure what our physicians thought of us,” says Bury. “Then, in 2006, they ranked the hospital in the 66th percentile on the satisfaction survey. In 2007, our physicians ranked Good Samaritan in the 87th percentile. Each year, our score has improved, and in both 2009 and 2010, our physicians ranked us in the 97th percentile. These surveys allow our physicians to evaluate Good Samaritan against its competitor hospitals, and the gap between us and our competition has steadily grown.”

“Through the Malcolm Baldrige process, we formalized Good Samaritan’s leadership system, which applies to every leader within our organization,” Bury continues. To become a great leader “you must look at what you must do to be effective and evaluate what actions are necessary to excel in the organization. Our leadership system outlines what is expected of every leader in terms of accomplishments and behavior.”

About the Author

Laura Thill
Laura Thill is a contributing editor for The Journal of Healthcare Contracting.