LaSalle General Hospital Improves Clinical Processes and Revenue Cycle

February 2012
National Rural Health Resource Center (The Center)

LaSalle General Hospital (LGH) in Jena, LA, took part in a Limited Strategic, Financial and Operational Assessment as part of the Delta Rural Hospital Performance Improvement (RHPI) Program. The purpose of this consultation was to provide assistance with evaluating clinical processes that impact the revenue cycle, prioritize needs, develop action plans based on the identified needs and implement a plan to improve clinical processes and thus the revenue cycle. The objectives of this performance improvement project included the following:

  • Financial performance improvement, basically a turnaround plan;
  • Creating processes that improve accountability of organizational operations;
  • Assessing department manager ownership, involvement and accountability
  • Development of managers.

In an interview with RHPI Project Staff Member, Rhonda Barcus, the former CEO of LaSalle General Hospital, Billy Page, discussed the project's outcomes and future direction. 

Q: What is your hospital's current status with regard to implementing the recommendations made during this project?

A: Our main goal in this project was a financial turnaround.  We were on the verge of closing our doors and were barely able to buy the supplies that we needed.  The result of this project was a specific project list with the action steps and timelines to get them done.  Many of the recommendations from the project have been implemented, or are in the process of being implemented, and there has been a huge improvement in financial performance.  One of the biggest benefits was having someone from the outside to talk to our Board of Directors, and reinforce what we had been telling them about the seriousness of our position, and that drastic changes were needed.

This project helped us define and implement new processes.  We had muddled along in the past but are now tracking certain indicators that we had previously tried to track but never quite did.  We now monitor the length of stay on a weekly basis and we track and discuss actual data at leadership meetings.  We have implemented productivity tools to evaluate each payroll based on activity indicators.  Prior to doing this, we had a cost report issue with the rural health clinic productivity standard that reduced our reimbursement every year.  Today both clinics meet the productivity standards on a bi-weekly basis, so reimbursement will definitely improve.

We had tried to get our board to recognize and approve the need for additional providers, and as a result of these recommendations have put a cardiologist in a clinic and implemented a hospitalist program.  While these positions did not get up and running as quickly as we expected, they did start several months later.  We now capture about 30 patients a month that come to the emergency room with cardiac symptoms, but were routinely transferred out to the care of a cardiologist.  Many of these patients did not go to ICU or have a procedure at the larger facility, so they were actually similar to patients we already treated at the hospital.  We are also working on developing more marketing strategies.  Previously, we did not put a lot of effort into a long-range plan but we will also use parts of this assessment as a basis and will follow-up with a retreat for our Board and leadership teams to discuss long-range plans.

We actually got a report from an employee exit interview that said we were trying to run the hospital "like a big hospital" and she was going to look for other employment where things were not monitored as closely.  Personally, I took that as a compliment that accountability had reached all the way to the staff level.

Q: What were the expected outcomes of this project? Has your hospital been able to document any of these outcomes?

A: First goal was to identify additional operating capital.  As a result of the changes we made days cash on hand went from 3.5 to 68.2 for September 2011 which did not include the meaningful use incentive money from Medicare.  Accounts receivable days were 90 and now are 70.7, and continue to decrease.

The second goal was to increase operating margin from -8% - 0% (on an annualized basis). This one has been the biggest struggle.  We ended our year better than the previous year but we are not where we need to be yet.

The third goal was to increase the net patient revenue by 5% (on an annualized basis) through growth in volume and increased payment per unit of service.  Volume is up due to the changes that have been implemented, and we are still working on improving swing-bed utilization.  One key result was to convince our board of the need to focus on the revenue side and not just cutting expenses, because there is only so much you can cut in a very small hospital.

Another outcome was to evaluate the feasibility of critical access hospital designation and sole community provider designation.  Neither of these options proved feasible, but we were in the position of having to evaluate any measures available.

Q: What are the expected next steps towards adopting your consultants' recommendations? Is there a sustainability plan?

A: We continue to periodically evaluate the action plan, and adjust as necessary.  One key result from this project was the education of the management team on how to evaluate a process, prepare an action plan and implement that plan.  We actually identified a project in our Therapy department that was not addressed in the assessment that we projected to be worth about $500,000 annually.  We re-prioritized it ahead of some of the other action items identified in the project, developed our own action plan and implemented it, improving cash, profitability and patient service.

Q: Is there anything your hospital would do differently if you were able to repeat this experience?

A: My biggest regret with this whole process is that we were not able to do it sooner. The hospital's financial performance had been in decline for a number of years just due to not paying attention to detail on a routine basis.  We were working on improving accountability and routinely monitoring data, but this project really jump-started that whole process.  Another idea would be to involve more managers.  The board, medical staff and management team interacted with the consultant, and were closely involved in the project, but broader participation from managers may have also given them the same education provided to the management team on evaluating and implementing improvements.

Overall impact of the project

  • Cultural change of tracking and monitoring data on a routine basis
  • The Board is more engaged and supportive
  • The management team utilizes data to make decisions instead of guiding decisions on feelings
  • Staff are more confident because of training received to implement parts of the action plan; nurses interacted with their counterparts in larger hospitals and are very proud of the quality of care provided at LGH.