A Four Year Retrospective and a Look Toward the Future
A Message from Dr. Karpf - February 2008
- Our Strategic Plan and the Results
- Adjusting our Plans and Goals for the Future
- Organizational Changes in Response to our Growth
Our Strategic Plan and the Results
When I arrived at the University of Kentucky, four and a half years ago, we undertook a comprehensive planning process involving and coordinating finance, marketplace strategy, facilities, and academics. This endeavor resulted in an aggressive and bold view for the future as documented and summarized in our strategic plan – UK HealthCare: Growing to Serve Kentucky 2004-2020. As ambitious as this plan was, we exceeded all of our initial goals and beat all of our timelines.
Our strategic goals included expanding and enhancing advanced subspecialty care at the UK Chandler Hospital while developing synergistic relationships with regional providers. At the same time, we came to realize the ultimate drivers to success would be demonstrated efficiency and a commitment to quality, safety and service as documented by quantitative measures.
Although we may still have some isolated deficiencies in advanced clinical expertise, we have recruited for and enhanced our advanced subspecialty services dramatically. We need to consolidate our gains while we continue to identify and address any remaining deficiencies.
Originally, we articulated an approach to regional providers that we hoped would be mutually beneficial. We have now come to understand what we really need to develop is a virtual or real network that allows lower acuity patients to stay in their communities while expediting the movement of higher acuity patients to the academic medical center. By creating this network, we can ensure an adequate population base to support our advanced subspecialty programs. As an example, we feel that we need to do 100-150 kidney transplants to have sufficient volume to be a recognized as a national center of excellence. At a rate of 56 kidney transplants per million population, we must cull patients from a population of approximately 2 million, essentially the entire eastern half of Kentucky, to adequately support this program.
We have, at the same time, worked hard to document and enhance our quality, safety and service. The establishment of the Center for Enterprise Quality and Safety has given us the infrastructure to address these issues effectively. Increasing throughput, improving operative services and establishing outstanding diagnostic and therapeutic capabilities has also been a critical effort of ours. We have engaged our chairs and faculty in these process improvement efforts through the office of Chief Medical Officer (CMO).
As our strategy matured, our clinical volumes have soared and dramatically exceeded our most ambitious expectations. Initially, we projected 25,000 discharges for fiscal year 2010. At the end of fiscal year 2007 we exceeded 27,200 discharges and are now projecting more than 33,000 (Chandler and Good Samaritan hospitals combined) discharges for FY 08. This figure includes continued growth as well as 3,000 to 4,000 discharges generated by private practice physicians who have remained loyal to Good Samaritan Hospital.
This massive infusion of volume has forced us to reevaluate and expand our building project several times. Initially we proposed approximately a $350 million project which would have built a base with one tower. We then expanded the project to include two towers being constructed at the same time and approaching $450 million. Because of continued growth in volume we recently asked and received approval from the Board of Trustees to add two additional floors to each of the two bed towers. Consequently, we have gone from planning a replacement facility of 473 beds to a replacement facility in excess of 630 beds. We may need to anticipate a third tower accommodating an additional 150 to 200 beds as demand increases.
Financially, the good news is that we have dramatically exceeded our initial proformas and projections. The challenge is that given our need for additional capacity our financial needs and appetites have dramatically grown.
By placing the College of Pharmacy building across S. Limestone, perpendicular and connecting to the Biomedical and Biological Sciences Research Building and by identifying a second research building as a major research priority for the University of Kentucky, we have assured that our vision of the new academic medical campus will ultimately be realized. When we complete the second research building, we will have research facilities that will accommodate the necessary growth to become a top 20 public research institution and maybe even beyond.
Adjusting our Plans and Goals for the Future
In short, our successes and outcomes have far exceeded our original goals and plans, and we must now recalibrate all the elements of our comprehensive plan in order to find appropriate goals and benchmarks for the next 5 years. I will personally lead this rescaling process, and as we develop a new plan we must continue to insure flexibility moving forward. We must be certain as we look back five years from now on what we have accomplished between 2009 and 2014 that we have been appropriately bold but sufficiently prudent. We also need to be careful that we continue to provide flexibility for the future.
Given our expanded needs for cash, fund raising will become an important focus for our organization. We can achieve our goals through cash flow and additional debt, if necessary, but it may take longer than we would like. If we can raise substantial amounts of development dollars we will speed up the schedule and will also save millions of dollars by avoiding the inflation associated with protracted construction. We must preserve borrowing capacity for future leaders as they continue to grow and expand both the clinical and academic enterprise.
We must bolster our efforts to meet our quality, safety and service agenda. I feel so strongly about these efforts that I want the enterprise to fully comprehend my own commitment to these issues. The best way I can do that is by being visibly engaged in improving our service efforts. This will require more visibility in the hospital and clinics visiting with patients and setting the service expectations.
While recalibrating the goals identified in our original strategic plan, we must also undertake several new initiatives. We are now two facilities operating as a single hospital working under a single license. We need to continue to streamline and integrate functions between UK HealthCare Good Samaritan Hospital and UK Chandler Hospital and use both appropriately. Additionally, we have entered into a consulting agreement with the Clark Regional Medical Center to assist them in assessing the health care needs of their community and to define with them our potential role in meeting those needs. We continue to mature our relationships with St. Claire Regional Medical Center, Harrison Memorial Hospital and Rockcastle Hospital and Respiratory Care Center. We will continue to help them expand their services and will become even stronger partners so they feel comfortable that we support them and they support us in terms of referrals. Our approach to developing a regional network makes good business sense and is also good public policy. We must stay committed to making sure patients can stay in their local communities for as long as possible and only be transferred to the academic center when absolutely necessary. However, when a transfer must occur it needs to be expeditious and efficient. Tremendous amounts of work will have to go into the integrative processes to make us a cohesive network and an effective partner for regional providers.
We also must aggressively improve our organization and services in Kentucky Clinic and at all of our ambulatory practice locations. When people are referred or choose to come to our patient care facilities, they think they are coming to an organized, coordinated program at the University of Kentucky and not a loose amalgam of independent clinics. We must provide the best of primary care and the best of referral medicine in an ambulatory setting. Our goal has to be that a complex patient that has been referred to the Kentucky Clinic can be seen by multiple physicians, have several complex diagnostic studies in a short period of consecutive days, and have a comprehensive evaluation sent back to the referring physician on almost an immediate basis. This is what the Mayo Clinic and the Cleveland Clinic do, and this is why they are so successful. So much of our business comes from a distance that we need to have a similar capability.
I am comfortable the reorganization of the ambulatory practices undertaken by Kentucky Medical Service Foundation (KMSF) and the reorganization of its governing board will give us a structure that will allow and encourage progress. Dr. Jay Perman, Dean of the College of Medicine and Chairman of the Board of KMSF, is presently recruiting for a Chief Operating Officer for Ambulatory Services who will have responsibility for all ambulatory services for UK HealthCare and will implement the policies and programs approved by the governing board. The outpatient activities at Kentucky Clinic and all our ambulatory practice locations must, in fact, be coordinated and integrated with activities at the UK Chandler Hospital and UK HealthCare Good Samaritan Hospital as well as our network facilities. Our success will depend upon whether we can no longer view ourselves as a hospital or a set of loosely affiliated practice plans. What we are, in fact, is a health care system that must be geared to provide the right level of service, in the right location, whether that is in the community or on campus in an ambulatory facility or hospital. As a system we should have the ability to focus on efficiency and quality across the whole spectrum of care.
Organizational Changes in Response to our Growth
To respond to the growth and changes of our organization and to help us accomplish our goals for the next five years, I have come to realize that I need to undertake a reorganization of my executive team. As many of you know, Jay Perman has served for several years as Dean of the College of Medicine and in a broader role for UK HealthCare as Vice President for Clinical Affairs. As vice president he has served as Vice Chair of both the UK HealthCare Executive Committee and the UK HealthCare Advisory Board. He oversees our relationship with the Veterans Affairs Medical Center, the clinical contracting process, residencies and educational agreements for UK HealthCare. Sergio Melgar, Vice President for Health Affairs and Chief Financial and Administrative Officer, has supported our organization through sound financial management and planning as we have grown rapidly and executed transactions to help us truly become a health care system. I have now asked Dr. Richard Lofgren to take on responsibilities as Vice President for Healthcare Operations and Chief Clinical Officer. In this role he will be responsible for day to day operations and integration of our clinical services as well as coordinating services between UK HealthCare and our regional partners. Under this new structure, Murray Clark, Frank Beirne, and Bob Fraraccio will report to Dr. Lofgren on hospital operational matters. He will have joint responsibility with Dean Perman for the operations of ambulatory services to ensure a smooth continuum of care between inpatient and outpatient care. Dr. Lofgren will supervise the Chief Operating Officer for Ambulatory Services on a day-to-day basis to improve ambulatory services for UK HealthCare and to fulfill the mandates for practice operations defined by Dr. Perman and the new governing board of KMSF. As Associate Vice President, Murray Clark, who has overseen the planning and construction of the new hospital, will report to me on outpatient and inpatient facilities planning.
As Dr. Lofgren takes on this new role, he will organize his team to best meet the goals we have set out for UK HealthCare. Additional communications will be forthcoming as he establishes his team and defines their roles.
The next five years are critical for UK HealthCare. If we can continue to mature as an organization and truly become a healthcare delivery system, we will create an unassailable position in the marketplace that we serve and guarantee that we can continue to support our academic missions effectively. I must say I have been nothing less than astonished with the progress we have made over this first four and a half years, and I look forward with much enthusiasm to what we can accomplish in the next 5 years. The University of Kentucky academic health center is truly an exciting place to be at this point in time. I am quite certain that we will overcome whatever financial obstacles might be put in our way because of budgetary constraints from the Commonwealth, and I am confident that we will emerge as a top 20 public research institution and may even exceed that goal.
Please join me in congratulating Dr. Lofgren in taking on these new responsibilities, and I hope you will pledge your support to him in his efforts.
Michael Karpf, MD
Executive Vice President for Health Affairs