Improving Financial Health Leads to Higher Patient Satisfaction (St. Cloud Hospital)

• 13 May 2009

After unprecedented growth and two years of operating losses, the leaders at St. Cloud Hospital knew it was time to take action. Like those at many well-managed hospitals, St. Cloud’s executive team understood the relationship between financial health and quality care. They recognized that a positive bottom line was needed to maintain staffing levels, competitive wages and state-of-the art facilities — all key requirements for the hospital’s goals of increased patient satisfaction and an enhanced reputation as a regional referral center.

The hospital faced a number of obstacles in pursuing its financial objective, including increases in labor and supply costs, investments in new technology and reductions in reimbursement. Despite these challenges, St. Cloud was able to improve on previous financial results to achieve a positive operating margin in 2004 after two years of operating losses. To accomplish this turnaround, St. Cloud Hospital used a number of tactics, including expense reduction, improved productivity and budget accountability.

St. Cloud executives learned that monitoring costs and holding staff accountable are critical factors in achieving financial improvement. The hospital used ACTION O-I® to help identify opportunities and measure results of a hospitalwide performance improvement plan that succeeded at simultaneously improving operating margins and increasing patient satisfaction scores.