A Recap of Open Forum
A Message from Dr. Karpf - February 2007
For those of you who were not able to attend one of my open forums for employees I want to take this opportunity to review the achievements of UK HealthCare of the past three years and look toward the future at the areas we must begin to focus on in the upcoming year. Although this newsletter is lengthy, I think you will find it informative and a good summary of where UK HealthCare has been and needs to go.
When I first came to the University just over three years ago, it was evident that there were two main drivers that would force a move toward 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.
In order to begin this change process, the governance of the clinical enterprise needed to be clarified. Buy-in from the Board of Trustees and the faculty and staff were critical. The hospital board was re-energized and re-engaged with the activities of the organization. The UK HealthCare Advisory Board, a committee of about 40 faculty and administrative leaders within the medical center, was formed, meeting quarterly to provide oversight to the enterprise. A smaller UK HealthCare Executive Committee of about 20 was appointed and initially met every week for several hours to begin to organize and clarify the vision for the clinical enterprise. This committee reviewed all the plans for the enterprise as they were developed —strategic, facilities and financial—and became very familiar with the finances of every part of the organization.
While the governing bodies worked toward the definition of a common vision for UK HealthCare, an operational model flexible enough to support all elements of the clinical enterprise was put in place. This structure, which includes functions such as finance, strategy, marketing and others, began to move UK HealthCare toward becoming a more coordinated organization.
As the governance and operating structure were defined, we began intense facilities, strategic, financial and academic planning processes. The facilities planning process concluded that the original hospital could no longer support the most advanced patient care we seek to provide and the building needed to be replaced. Phase 1A of the new building project, pegged at $450 million, will consist of a new parking garage across Limestone and a 1.1 million square foot patient care facility with about half of the interior space finished. Phase 1B will finish the remaining interior space and will put the total project, Phase 1A and 1B, somewhere over $600 million.
See our Renewal Web site about the new hospital
The design of the new facility seeks to offer a comfortable and welcoming environment to the broad range of patients and families we serve. The lobby will be spacious with walls of windows, uplifting natural light and views of nearby green spaces. The landscaping plan around the hospital and at the main entrance will incorporate Kentucky’s beautiful indigenous grasses, plants and trees with gently rolling terrain and stone walls reminiscent of the Bluegrass region. The patient rooms will provide for the most health care has to offer. They are the largest I have seen built and will have huge windows and ample space for families and care givers.
The strategic planning process focused on several key areas including strategic initiatives, patient throughput and access, customer service, operative services, imaging and outreach. The programs identified as strategic initiatives—Cardiology, Neurosciences and Orthopaedics, Digestive Health, and Oncology—have flourished and a reassessment of their original plans is now beginning. Additional strategic plans are being developed for Pediatrics and Transplantation. We are also refining geographic strategies for the various regions in Kentucky to make sure we are serving the most appropriate patients in our advanced subspecialty programs.
We have had dramatic success improving patient throughput and access in the hospital. Many new beds have been opened and the new Admission Discharge Transfer (ADT) and Clinical Decision Units (CDU) have also facilitated the improved management of patient flow through the hospital. Operative services initiatives have also served to improve the operations and throughput of the operating rooms. We have begun to focus intently on radiology services understanding that in the past we have underinvested in radiology with regard to systems, people and equipment. The new Radiology Information System is being implemented and a decision process has been undertaken to select a new PACS. We have added MRI and PET CT capacity and expect additional radiology imaging capacity to be developed in the space to be vacated next year by University Health Service.
Our outreach efforts have become much more organized and focused as well. We have a commitment to the rural providers of Kentucky—they are the front line of access to health care in their communities and are important economic factors for many rural parts of Kentucky. The Markey Cancer Center Affiliate Network has been established with the Harrison Memorial Hospital, Rockcastle Hospital and St. Claire Regional Medical Center. These affiliations not only offer opportunities for us to offer services in those communities, keeping patients closer to home for their medical care, but they provide for oversight of and support for the enhancement of the quality of clinical care in those communities. These affiliations are good public policy for the patients of Kentucky; they protect the rural providers and their communities; they also make good business sense.
Under the leadership of the Provost, the deans of the health sciences colleges and the library formed a committee to assess the academic plans for the medical center. Understanding that the long-term facilities plans called for the colleges of Medicine and Dentistry to be razed, the committee began to focus on how the health sciences academic and research campus could be recreated west of S. Limestone adjacent to the BBSRB building. They established the vision of an integrated learning environment for health care professionals within the walls of the planned Health Sciences Learning Center. The first installment of this new health sciences campus is set to break ground this spring with the construction of the new College of Pharmacy Building. We are in the planning process for a second research building, BBSRB II, and hope to over time move forward with the rest of the Medical Campus of the Future, including the new Health Sciences Learning Center.
The financial planning efforts we undertook sought to answer the question: are our plans affordable? The plan projected we could grow at 5 percent per year if we were hitting on all cylinders, which is a substantial growth rate for a health care provider. It concluded that we needed to grow at least 3 percent per year to support the building project and planned strategic investments. As we look back on what we have achieved, our growth has well exceeded our expectations. We have grown 10 percent per year for the past three years, and we will likely end this fiscal year with more than 27,000 discharges. This level of discharge activity was not projected to occur in our original financial plans until 2010 at the opening of the new hospital.
Today, our hospital is completely full having had 39 consecutive months and 14 consecutive quarters of growth. Our occupancy has increased from less than 75 percent in 2003 to nearly 85 percent today. These levels of activity and our increasing occupancy rate have led us to reevaluate our projections. Even with 2.5 percent growth for the next few years, when the new facility opens, we would be at about 94 percent occupancy. Hospitals can not operate effectively at these levels; thus, we made a decision to seek Board of Trustees approval to submit an application for a Certificate of Need for up to an additional 192 beds. We have received their approval and have submitted our letter of intent to the state. To accommodate these additional beds for the long term, we will eventually need to construct two additional bed floors on the new building project. The only question now is whether we build those floors in the first phase of the project or down the road. There are clear advantages to doing it while the building is initially under construction; however, a decision about the timing of adding the two floors will not be made until later this summer. Because the new hospital will not be available for several years, we are beginning to identify options to create additional bed capacity in the immediate future and hope to have decisions on those options in the coming weeks and months.
Not only has our clinical activity exceeded original projections, but our cash position is much stronger than we had originally anticipated. The sale of CHA and income generated from operations has put us in a strong position as it relates to the financing of the building project as well as with contemplating future investments beyond the first phase of the new hospital.
We have made a lot of progress toward fulfilling the facilities, financial, strategic and academic plans that we have set out. Now it is time to reassess those plans and identify additional ones we need to focus on as we attempt to sustain our success. There are a couple of areas that demand our attention.
The first area we must turn our attention toward is ambulatory care, which is deficient right now on a number of levels—facilities, systems, and attitude and culture. Even though our Kentucky Clinic facility seems to be full, it is very inefficient. Its inefficiency is, in part, due to the mixture within the facility of clinical space with office and administrative space. It has become clear that the space cannot be improved until an additional 40,000 to 70,000 square feet has been identified elsewhere to open up space in the Kentucky Clinic so improvements can begin. The process to identify that additional space has begun. As you know, we have been moving a number of people not involved in the delivery of patient care to offices on Sterlington Road at the corner of New Circle Road and Alumni Drive. UK HealthCare finance, marketing, and other support functions are now located there. Soon, the KMSF employees will be relocated there, freeing up space in their building across Limestone and offering opportunities to relieve some crowding at the clinic. As you may have noticed, construction on the new University Health Service building has begun and we expect the space they vacate next year will allow us to expand radiology services in the Kentucky Clinic.
Not only are our ambulatory facilities of concern, but the systems and infrastructure to support those services are not where they need to be at this time. Phone systems, registration processes and appointment scheduling all have to be addressed if we are to look like and operate as a seamless health care delivery system for our patients rather than a collection of discrete physician practices. Task forces to address these and other elements of the ambulatory services are being established and planning has begun. The physician practice reorganization has led to the creation of an operations committee of physician leaders charged with overseeing many of these activities; they must be prepared to drive these process changes. These changes must happen if we ever hope to deliver the level of patient care and service Kentuckians deserve. We haven’t focused in the past on outpatient care, and that is a mistake. Our patients think they are coming to UK, not to a specific clinic in our organization. They deserve to experience an integrated organization. We will give that to them. This will be a fundamental driver for our future success.
The second area that we must focus on more intensely is improving patient satisfaction. We have begun to monitor our performance on a number of important patient satisfaction indicators. Our scores do not represent what many of you work very hard every day to deliver to our patients. They do not reflect who we are and what we want to be. Some of this is due to residual cultural perceptions within our organization that we are a safety net hospital whose primary mission is to serve the most indigent patients. But that is not who we are, and this mentality will not suffice in helping us to serve Kentuckians better and better. We are an important resource for the state acting as the primary referral center for the sickest patients in Central, Southern and Eastern Kentucky. We deliver the kinds of care and the advanced subspecialty programs that would not be available to most Kentuckians if we did not offer them. Not only do we have to deliver the highest quality health care services, but we must do it in a way that makes our patients feel good about their experience at UK HealthCare. Each of you has the ability to impact the experience of our patients, one patient at a time, one day at a time.
With all of our successes and the challenges we continue to face, UK HealthCare has an important role to play. The progress we have made continues to bolster our service mission, supports the University’s advancement towards its goal of becoming a top 20 public research institution and serves as a real and valuable economic driver for Lexington and the Bluegrass Region. As we move forward, we must stay focused on serving Kentucky. We are responsible to all of Kentucky and are a referral center for over one half of the Commonwealth, some two million people. The growth of our organization over the past three years has been truly amazing and just goes to show how much the University of Kentucky and UK HealthCare mean to the people of Kentucky.
Michael Karpf, MD
Executive Vice President for Health Affairs