A Four Year Retrospective
A Message from Dr. Karpf - August 2007
When I first came to the University, now nearly four years ago, it was evident that there were two main drivers that would force a change in the clinical enterprise—one was positive and the other was not. The first and positive force was the mandate from the Kentucky General Assembly for the University of Kentucky to become a top 20 public research institution. Second, and very concerning, was the slow but steady decline in clinical activity within the organization that had to be addressed for us to maintain our relevance in the health care marketplace of the Commonwealth.
To address these issues, we revamped the governance structure to be more inclusive and responsible and also initiated a comprehensive planning process. As we developed and matured the governance and operating structure of UK HealthCare, we began intense facilities, strategic, financial and academic planning processes. These planning processes have led to a great deal of investment in the form of financial and human capital. We have made progress in almost every area that we targeted, and this investment has resulted in our recognition nationally as a provider of advanced subspecialty care.
Through our outreach efforts we have established a considerable virtual network now covering several million people. We have forged strong relationships with community providers such as Harrison Memorial Hospital, Rockcastle Hospital, St. Claire Regional Medical Center and many others. We will place a major emphasis over time on maturing these relationships.
The growth we saw in July 2007, about 2500 discharges, is up 10% over July 2006 and continues to exceed our expectations. In 2004 we were an academic medical center at about the 25th percentile in size compared to our peers. Today we are just above the median size of academic medical centers. With the addition of Good Samaritan Hospital to our family we are approaching the 75th percentile in size placing us among the largest of academic medical centers in the country. This means that our ambitions of becoming a top 20 institution start to become a reality. Small academic medical centers can have only limited ambitions.
Because of our rapid growth, occupancy levels have stressed the UK Chandler Hospital. We’ve outgrown our physical plant and immediately need additional inpatient capacity. Not only do we have that immediate need, but we now understand that we must plan the new hospital as a bigger facility.
Because Chandler’s volumes grew so rapidly over the past several years, the facility became inefficient and productivity decreased while trying to keep pace with demand. A hospital that runs too full is inefficient in the same way that a hospital that runs not full enough is inefficient. There is a balance that must be struck, and we must get Chandler back in balance.
Chandler will downsize. It must in order to get back to an occupancy level that allows for optimal efficiency; our census must move from around 410 to about 390. We want a vibrant and busy Chandler Hospital, but we cannot continue turning patients away and having a high number of boarders in the hospital.
The acquisition of Good Samaritan Hospital (GSH) has provided a relief valve for some of our capacity constraints at Chandler. We are now admitting 10-15 patients a day at Good Samaritan with a daily census of UK patients at GSH of about 20-25. Many UK physicians are now part of the GSH medical staff and are seeing patients at that facility.
We continue to make progress on the building project. The parking garage is on time and budget and scheduled to open in November 2007. The new hospital project infrastructure construction is underway. When the first phase of the hospital is complete Chandler Hospital will have moved from being a 489 bed hospital to a 592 bed hospital. In September we plan to seek approval for two additional floors on each patient bed tower which will allow us to accommodate 630 beds in the Chandler Hospital.
With the growth we now expect at Good Samaritan Hospital and the continuance of a census at Chandler in the range of 390-400 we must begin to consider whether a 630 bed facility will accommodate our long term goals. We will recalibrate our plans for the clinical campus in the near future.
At a time when we are continually looking toward the day we open the new hospital, we have not ceased necessary investment in the existing Chandler Hospital. The building has a finite life, but there are certain projects that must be done. We have invested $3-4 million in expanding the emergency department, $3-4 million in a Surgery/PACU expansion, $1 million to renovate the cafeteria, $1.5 million on a NICU expansion, $6 million on the Gill Imaging Suite, and $14 million on a Radiation Medicine expansion at the Roach Building. So, although we have a major construction project underway with the new Chandler Hospital, we haven’t stepped back from investing in the existing hospital.
Our financial plans project that we have to spend around $800 million to position ourselves for top 20 status. Some of this is generated through borrowing, but a substantial portion is paid with cash generated through operations. As we have refined our plans, the financial commitment for phase 1A for the building has grown from $450 million to $525 million. The Board of Trustees has accepted this scope and thinks we can do it. They will also hold us accountable to achieve it in a financially responsible way. This is a huge project by anyone’s standards.
To maintain the confidence of our Board and to achieve our goals, we must continue to be a highly rated organization from a financial perspective and a top performer in the country. We must generate strong bottom lines to be reinvested in the organization. We must be very efficient to achieve our targets, and right now we are not as efficient as we once were.
In 2004, when looking at our staffing per adjusted occupied bed (AOB) we were very efficient with growing patient populations and staffing that had not yet caught up. Now we are an average performer. Chandler has become very busy and we have now grown our employee base more than our patient base. Our FTE/AOB has increased while at the same time our overall patient acuity has gone down. We must adjust our FTE in Chandler. Fortunately, Good Samaritan Hospital will afford us an opportunity to do that painlessly.
Improvements in UK HealthCare’s ambulatory care services are central to our continued success. We have been able to identify additional ambulatory care space with the vacancy of the KMSF building, the impending opening of the new student health building, and the acquisition of Good Samaritan. This will give us the relief of space we need to begin reorganizing space in the Kentucky Clinic building. We have also begun working on improving our support systems. Projects to address our telephone systems, registration, pre-authorizations, and other ambulatory practice operations are underway or in planning. As an organization, we must begin to set standards and expectations that will better serve our patients and referring physicians in an ambulatory care setting.
Through all of this growth, we have continued to provide high quality and safe care to our patients. We have been reassured of this with the recent awards from US News and World Report and from Solucient Top 100 Hospitals. Each of you can be very proud of this national recognition.
Not only have we achieved clinically, but we also continue to further our academic mission. The College of Pharmacy is underway with its new building project and a significant next priority for the University is to move forward with another research building similar to the BBSRB. Not only is our academic space being enhanced, but our student populations are making great strides, as well, with the College of Medicine just having admitted its most accomplished medical school class ever. Research activity is making great progress with research funding growing despite tight budgets at the national level.
We have achieved a great deal over the past four years and must continue to stay focused. We must be a high performing organization, fiscally sound and stable, in order to meet our goals. It’s the right thing for Kentucky and it’s the right thing for our patients. In the meantime, because we are now a very busy organization in an intense working environment, folks are putting in hard work days. But, UK HealthCare is a place you can feel good about; it is a place that is secure—and none of what we have achieved could have been possible without each of your efforts.
Michael Karpf, MD
Executive Vice President for Health Affairs
View images of the Hospital Groundbreaking celebration.