Newsmaker Interview: James Lee

What has been the biggest financial impact of the recession over the last year on Adventist HealthCare?
The biggest impact was the realization that healthcare is not immune to recession. There is a mindset that hospitals don’t deal with recessions. But we are impacted. The biggest impact for us has been increasing our focus on cost management and making sure that we are wisely managing our resources. We have also expanded the circle of people who are monitoring that process. In the past, cost management has been driven mostly by our finance officers, but we now include operations colleagues, quality colleagues and clinical folks. There is now a more comprehensive understanding of financial issues and resource management issues by all the different executives in the organization. Everything we do is for our patients. All our cost management choices have to positively impact patient care. The recession has caused us to be more focused on that issue.

Was it challenging to bring everyone together around the cost management agenda, including clinical colleagues?
Surprisingly not. We were dealing with an environment where everyone knew that banks were failing, people were being laid off, etc. there was an overwhelming sense that we had to do something. From a timing perspective, it was actually much easier to introduce this concept during a recession. Cost management has been in healthcare for a long time, and we have been working on it for a long time, but the recession gave us an opportunity to get everyone focused on it.

What kind of energy do you normally buy annually, and what’s your cost?
The two primary energy sources we use are electricity and natural gas. Our total annual energy cost is in the $14 million dollar range. Our energy purchases used to be a little fragmented. Each of our facilities would contract out with a local energy provider and typically have a one-year deal for electricity or gas. We’ve considered different approaches, such as issuing an RFP or engaging in direct negotiations with one or two vendors. But we eventually decided to follow an arrangement that had a lot more transparency in the negotiating process.

What kind of healthcare reforms do you think will be most useful to health systems like yours?
I’m no expert on reform, but when I look at the fact that there are 47 million people in this country with no healthcare coverage, I think that’s one area that must be addressed. We are the largest provider of uncompensated care in Montgomery County, Md. Everyday we provide care for folks like that, because its part of our mission. We get a lot of patients with no insurance coming to our ED. If those people had insurance and saw a primary care physician before their problems became acute, they would have better outcomes. That’s what we are really interested in seeing, because that improves community health.