Financial considerations remain part of daily conversations for children’s hospitals and health systems who face skyrocketing labor costs, lingering supply chain issues, inflation, and a difficult payor and reimbursement environment.
Nicklaus Children’s Hospital in Miami faced these challenges head on by implementing a 100-day program that has resulted in nearly $27 million in margin improvements in less than a year.
A 100-day transformation
In August 2022, Nicklaus Children’s launched “Margin Madness,” billing it as a “100-day tournament to reduce waste and improve efficiencies.” With names like “Nicklaus Crazy Penny Savers,” “Waste Watchers,” and “Super Scrubs,” multi-disciplinary teams set out to identify and implement manageable changes within their own units toward the program’s overall goal of $6 million in margin improvements. The Margin Madness teams implemented more than 600 change plans over the course of the 100-day workout and ultimately crushed their target, accounting for nearly $14 million in savings.
“The dollar savings was the cream on top,” says Saima Aftab, MD, chief strategy officer and vice president of business development. “But the culture change—that this hospital is your home, and you wouldn’t want to waste anything in your home—that was the magic.”
The key to that magic was valuing even the smallest changes. “That is the biggest point, because there was no judgment or shame if your idea was small or very simple,” Aftab says. “All ideas were brought together and celebrated when we were sharing our successes.”
Some of the changes implemented during Margin Madness included:
- The emergency department had been using disposable oxygen-level probes, but a collaboration between the ED director and supply chain team members led to sourcing reusable probes.
- Crash carts in the hospital were historically stocked with 30-milliliter vials of epinephrine. However, following Institute for Safe Medication Practices guidelines for a pediatric setting, they were replaced with two-milliliter vials, which resulted in an annual savings of $20,000.
- All DNA and molecular testing was shifted from an inpatient setting to outpatient care. This allowed Nicklaus Children’s to accurately bill and be reimbursed for those services as opposed to rolling them up into an inpatient stay.
- Cross-functional teams discovered multiple departments had active subscriptions to the same online survey tool. Those separate subscriptions were consolidated into a single, organization-wide subscription for all to access.
“A lot of these things aren’t rocket science. A big part of it is just putting the structure in place so people can think differently,” says Dawn Javersack, senior vice president and chief financial officer. “Individually, they may not be something that’s going to change the world, but when you take 600 of those plans and add them together, they start to become something that has real value.”
The hospital followed Margin Madness with another themed workout cycle, resulting in $9 million more in savings. They’ve found the most impactful changes are those that can be made incrementally, require accountability and can be sustained for the long haul. Often, the initiatives may already exist in other areas across the organization but benefit from a structured team workout approach.
Children’s hospitals looking to tighten up their financials can follow the same 100-day workout plan as Nicklaus Children’s.
100 Day Workout Plan
Whether you’re in peak fiscal shape or trying to get back to top form, children’s hospitals can improve financial health by making this workout a regular practice.
Children’s hospitals and health systems won’t need to look outside their organization for this “at-home” program. They have everything they need in-house to succeed.
Engaged team. The program should be driven by hospital middle management—typically director or manager level—to ensure initiatives resonate with those charged with carrying them out. “The best ideas come from staff members,” Javersack says. “They’re the ones who know where there are issues, bottlenecks and waste—and where there’s opportunity.”
Supportive leadership. Senior leaders empower middle managers to make decisions to drive change. When those changes result in margin improvements, they become benchmarks for future budgets. This adds accountability to the program and ensures upper-level management is invested in its success. “It’s absolutely critical because if it’s important to us, it’ll be important to the people who work with us,” Javersack says. “Having our executive team be the sponsors for each of those teams to provide support, overcome any barriers, and function as a support mechanism has been critical.”
Broad involvement. Enlisting the entire organization through cross-functional teams and regular check-in meetings to share the results of successful initiatives drives collaboration and accountability. “As the proverb goes, ‘If you want to go fast, go alone. If you want to go far, go together,’” Aftab says. “We wanted to create a system where we could create engagement across the house by making this a system-wide initiative.”
Follow this five-step program to grow your fiscal fitness in 100 days.
Step 1: Create a theme. A theme that focuses the organization’s efforts on like-minded changes helps build buy-in and engagement. Find theme ideas in broader areas like waste reduction, revenue growth opportunities, quality improvement measures or the patient experience. Niklaus used a “Margin Madness” theme for waste reduction and “Space Adventure” for revenue growth.
Step 2: Form multi-disciplinary teams. To spark fresh thinking and cross-pollination of ideas and processes, leadership should assemble teams of 10-15 members representing a diverse mix of clinical and support teams. Assign new teams for each quarterly workout to ensure fresh combinations of diverse perspectives.
Step 3: Make two changes per month. Over 100 days, each leader should make at least eight changes, with two being cross-departmental collaborations. Changes can be big or small as long as they can be implemented in less than 100 days and have measurable impact.
Step 4: Embed accountability. Hold bi-weekly mentoring and coaching sessions within each team. Convene all teams for monthly check-ins to share updates and celebrate successes. Use an online tracking tool to monitor progress.
Step 5: Make it competitive and fun. Encourage teams to come up with creative names, perhaps even custom t-shirts and other theme-related props. “One of the best parts of being in a children’s hospital is that you can bring in fun and whimsy,” Aftab says. “And when you’re going to the cafeteria or anywhere else, people are curious about your cool t-shirt and want to hear more about it.”
3 tips to maintain gains
How do you ensure your fiscal fitness improvements continue after the 100-day workout is over? The Nicklaus Children’s team identified three keys to help maintain your gains.
Accountability. Margin improvements are approximated by the teams that implement a change plan, and the actual savings are later validated by the finance team. The validated improvements are then added to future departmental budgets and tracked to ensure they stick.
Leadership development. New team leaders are assigned each workout cycle to allow more people the opportunity to develop skills and take ownership of the changes their team implements. Additionally, Nicklaus Children’s has formalized a process to further develop some of its star workout leaders.
Keeping it fresh. Just as you might see diminishing returns if you repeat the same gym exercises over and over, the hospital’s workout themes are intentionally varied to keep the program new and exciting. It also underscores the program’s goal for sustainable change. “Having some freshness with new leaders bringing different types of workouts makes it a part of organizational culture,” Aftab says. “It’s not done and then you forget about it for six months; it’s just what we do.”