Banner photo of Larry Eugene Meredith, Patrick Flynn and Ronald Tipton, 2016.

The good times are memories
In the drinking of elder men...

-- Larry E.
Time II

Wednesday, March 8, 2017

Adventures in the Medical Business

In making the rounds to the various cost centers to introduce myself and talk budgets, I met a manager in the same building I worked who had something called a Wang Word Processor.  I had heard of such a thing, but this was the first time I actually saw one and I asked him to show me how it worked. He did. When I learned how little he utilized it for his own department I boldly went a step further and asked if I could share it.

Each month we printed out a budget report, which was sent to several people, with portions going to specific cost centers so the managers could see their numbers. With 192 cost centers it was a fairly thick report, not overly complicated, but certainly repetitive and a pain to do every month. Sue had to type the original, then do the various copies on a photocopier.

The report had a summary page of the Medical Center as a whole, then breakouts by each hospital and finally sections on every cost center.Each portion consisted of a listing of all cost categories with columns comparing actual to budget for the particular month and for the totals year-to-date. Most of the lines did not change a bit month-to-month, but all the number data did. It required a complete retyping of everything each month. 

With the use of the Wang processor I could program in all the boilerplate and only the numbers had to be updated. I would write the new number in on the previous report and Sue would enter them into the Wang and it did all the formatting and printing. It saved a ton of time, and error, and I could utilize Sue in other ways, especially in increasing the analysis of the data so we could help units improve and stay on top of their expenditures.

It also freed up Sue to help me put together the next round of budgeting. We began the setup of the budget packets not long after the New Year. I had finalized the fiscal 1978-79 budget by the end of December, only six months late. The former Budget Director I had replaced left before it was finished. I was not unhappy to see him go. He was a friendly man, but I got tired of his, “We always done this way” attitude and his lackaday approach to deadlines. At the start of the calendar year this baby was all mine and I was determined budgets going forward would be completed and approved and disseminated by July 1, the beginning of the fiscal year.


I had started improving communications with the various managers the prior year, now I went around to every cost center again in January and emphasized I was there to help them with budgeting and that a packet would be coming to them in February. We were going to start the process as early as possible. I put together the plan and packet and hand delivered it myself, clearly (I hoped) explaining it to each and every manager.

Getting everybody on board was quite an education. I learned to sit in the chair nearest the door so I could exit quickly at the end of any meeting before it turned violent. Three areas were the worse: nursing, doctors and the upper administration.

First of all, I discovered the nurses were not big fans of the doctors. These women (there were no male nurses at MCMC that I’m aware of in 1979) felt the doctors took them for granted, which was true. The nurses felt they spent more time with and treating the patients than the doctors did, which was also true. But the doctors ran the wards as their own little fiefdoms and the nurses and orderlies as serfs, who should snap to at the doctor’s orders and never, ever question anything. The nurses felt the doctors’ arrogance made them susceptible to sloppy work and error. And of course there was a great discrepancy between what nurses were paid and what doctors earned. Despite all this, the nurses still held a good bit of power at the Medical Center, so I didn’t want to cross them. If they turned against me they would have made my life hell.

The doctors themselves were like a bunch of spoiled children when it came to budgeting, all yelling, "I want, I want, I want" or “If he can have it, why can’t I”.

Hospitals consist of many different disciplines of care, oncology, cardiology, pediatrics, orthopedics and so on and so forth. Some, perhaps all, need some sort of equipment beyond a stethoscope and sphygmomanometer. Equipment can range from a CT Scan to an EKG Monitor and the individual prices stretch from several thousand, maybe even up to a million, dollars and just a few hundred. For instance, a hospital bed can run from around $600 to over $3,000, and certain treatment beds can exceed $13,000. A CT Scanner can cost $2.5 million and a MRI Machine as much as $270 million. Both these were relatively new developments when I was in the medical industry. The first CT Scan was in 1971 and the MRI was 1977. I'm certain MCMC did not yet have any MRIs and I don't know about the CT Scanner.

In our capital budget meeting where doctors would state equipment they hoped to buy in the next fiscal period things could get testy. The chief of cardiology might say he wanted something costing $100,000. He might even give very valid reasons why this was required. Therefore, we might list it on the submissions list. Immediately, I would have several other physicians clamoring for an equipment budget of $100,000 as well. I might know that for one or more of these departments there was nothing in that range  they needed, but because one doctor got $100,000 they thought they were equally entitled. 

This type of grasping was  even from jealousy directed toward other hospitals.

In one case, a doctor requested a very expensive and very specialized machine that only had application in fairly rare cases. It hardly justified the cost of purchase, but before someone hit me with the old "if we can save one life isn't it worth any cost" bromide (and I would even argue that concept with you) this was not a matter of putting a limit on the value of a life. There was a Philadelphia Hospital that had this particular equipment and specialized in that affliction. All such cases in the region were sent there and were so rare that it could adequately handle any and all sufferers. There was no call for a second hospital to compete for these type of patients. He simply wanted the equipment because someone else in his field had one. 

The biggest challenge was the upper administration. I am not talking about people like Jim Schlief or any other secular manager of high title; I am speaking of the nuns who actually owned and operated the medical center. They too got to make requests and in the end would certainly have the final sign off on the budget. During this period they got it in their minds that the hospital needed a helicopter and a heliport. Why? Again, because some other area hospitals had helicopters and heliports. It was sort of a glamour of it thing.


Low cost transport helicopters today can cost a million dollars. They may have been cheaper in 1979-80, but they were still highly expensive, plus you required pilots, insurance, maintenance and fuel. The vast majority of people could be gotten to the hospital just fine by ambulance. If someone was in such dire distress that a helicopter was their only hope there were area hospitals they could be flown to. Ours did not have to join those so equipped. It was not financially feasible and could have led to insolvency.

With this or any expenditure you received two responses from the nuns. “It is for the patients” or “We’re a non-profit, we don’t have to worry about cost.” 

Yes, sometimes you spend extra money for the benefit of the patients; however, the patients did not need a helicopter. That money would best serve the patients by not being spent on such an ostentatious item.

As to this being non-profit, it was very difficult getting them to understand this didn’t mean you did not have to concern yourself with expenditures. True, you did not have owners or stockholders you had to please by the profit you generated, but you had to make a profit anyway. We didn’t call it a profit, of course, and it didn’t go into a Capital Account, it went into Reserve. Yeah, you could break even and you could carry a deficit, but what if you needed emergency funds or expansion? Prices do go up and funding sometimes goes down and you must have some money to operate. You don’t want to have to borrow a lot and build up liabilities. Being a non-profit does not mean throwing away good business practices. I would often ask, "If you want that, what are you willing to give up." Naturally they weren't willing to give up anything. I pointed out if they got something like a helicopter then someday they would have to give up something else, and it could be the hospital.

One other thing concerning medical costs, at least then,  perhaps the rules have changed these near 40 years later. When we budgeted for supplies we had to select from registered medical supply houses. This was Federal Law. These suppliers usually charged much higher prices that we could have gotten something for elsewhere. The example I remember best were the metal ice buckets. I know when I’ve been in hospitals the ice buckets have usually been a thin plastic, but in this case the request was for metal ice buckets and he had to buy them from one of the official medical suppliers. The cost was $100 per bucket. My goodness, they weren’t bad looking buckets, but nothing special about them. I looked in a nearby Woolworths and could have purchased the exact same buckets for $10 each, but of course I couldn’t do that because Woolworths wasn’t a certified medical supplier.


I did have a budget in place for the new fiscal year on time, something they told me hadn’t happened in a decade. We were running a decent department, I felt. We were communicating, which the cost center managers liked and being on time with the budgets. Our monthly budget reports were coming out sooner in the month thanks to the Wang Processor. Going into 1980 everything was coming up roses again.


Even the snarky Mr. Simon was about to disappeared from my life.

2 comments:

slugmama said...

My grandmother worked for Dr. An Wang's Wang Labs in the 1970's in Lowell MA. I've got a charm bracelet granny gave me that she received from the company after so many years of service there. It's got a little word processor keyboard charm on it. lolz

WARPed said...

Wow...interesting stuff, Larry!

:-)

-Andy