Productivity, Labor, Non-Labor and Revenue Cycle Improvements Result in Cost Savings and Financial Gains

Huron partnered with North Hawaii Community Hospital (NHCH) to immediately enact process improvement while also identifying opportunities in labor costs, non-labor expenses, revenue cycle and physician services. Improvements far exceeded the project goals with more than $5.75 million realized.

North Hawaii Community Hospital holds a reputation for high quality care and committed service to the community of Waimea and the Big Island. However, NHCH had operated at a loss since opening in 1996.

Huron rapidly entered a nine-month implementation phase with NHCH, acting on immediate improvement opportunities while simultaneously assessing additional opportunities. By addressing challenges related to productivity, labor costs, non-labor expenses, revenue cycle and physician services, Huron implemented improvements resulting in $5.75 million in total benefits – exceeding the project’s goals.

Improved labor productivity: Huron increased accountability by implementing a productivity tracker across hospital departments. Additional productivity improvements were achieved through reductions in overtime hours, the creation of a consistent vacancy review methodology and new shift management tools and flexing guidelines that helped NHCH adjust staff to volume.

Revamping physician governance: By establishing a new physician governance structure, Huron helped NHCH create cohesion between group practices. The implementation of best practices in the clinic billing office led to a 10 percent cash factor improvement. Additional improvements were achieved through centralization of preregistration functions on scheduled services for all clinics and increased utilization of employed hospitalists over locums.

Optimizing the revenue cycle: By implementing operational changes in the patient financial services office, Huron helped NHCH achieve a 1.51 percent cash factor increase. In addition, a strategic price increase resulted in a five percent net revenue increase. And, by negotiating increased reimbursement rates and implementing a clinical documentation initiative, Huron helped NHCH improve revenue cycle efficiency.

Managing non-Labor expenses: Huron implemented cost savings initiatives in key nonlabor areas including purchased services, clinical, pharmacy and food services, generating $980,000 in improvements. The creation of an inventory monitoring and sustainability program helped ensure these improvements are sustainable.

North Hawaii Community Hospital is a 33-bed, not-for-profit, acute care hospital located in Kamuela/Waimea on the Big Island of Hawaii. It is the only full-service rural hospital within 50 miles.