2001 A Medical Odyssey was the theme of this year’s Cadaver Ball, held Saturday in Opryland Hotel’s Tennessee Ballroom. Here are a few of the scenes of the eventful evening. Dean John E. Chapman portrays Obi-Wan Kenobi and Judy Jean Chapman is Princess Leia in this year’s Cadaver Ball. (photos by Mayhew Koellein)
State of the Medical Center
Harry R. Jacobson, M.D.
February 22, 2001
4:30 pm, Langford Auditorium
> Good afternoon and thank you for joining me today.
> I appreciate your being here – it says volumes about your commitment to the work you do and to the Vanderbilt Medical Center.
> This year more than any other since I’ve been Vice-Chancellor, it seems the Future does Belong to Us.
> I want to take about 45 minutes to give you a sense of how we’re doing and where we’re headed.
> I want to use the balance of our time today to hear from you – I know you have concerns and questions.
> This is one opportunity for you to air your thoughts.
–slide –
> Today, like many of the State of the Medical Center addresses, begins with a discussion of TennCare.
> The Japanese character at the top represents the symbol for crisis.
> It is made up of the Japanese characters for danger and opportunity.
> The danger is pretty clear to all of us.
–slide —
> Our losses on TennCare once again exceeded $25 Million.
> To give you a sense of how important that is, remember the salary adjustment for nurses that we offered this year was about $10 Million
–slide —
> Our collective losses from Access MedPlus have topped $36 million.
> That is above and beyond our $25 million in losses.
> We have sued Access MedPlus for $13 million, and we are in the process of legal discovery.
> Receivables from Access are, on average, more than a year overdue.
–slide —
> Throughout the year we have continued to see doctors and hospitals across the state leave TennCare.
> It is hard to blame anyone who chooses to no longer see TennCare patients.
> It is not surprising that some have suggested that we should stop seeing TennCare patients.
> TennCare families are really not so different from our own and when someone in our families is injured or gravely ill, we expect the healthcare system to do everything it can to comfort them and save their lives.
> It is our mission and it is our responsibility to heal people regardless of their ability to pay.
> For the moment, it means that we will have to work hard and be as efficient as we can be …
> And hope that the Governor and General Assembly can find a way to fund the program at an adequate level.
> The opportunity in TennCare exists as well.
> Earlier this year we received an $8.2 million essential provider payment awarded to facilities who saw a disproportionate share of TennCare patients.
> The state government has assured us that once HCFA, the federal agency that oversees TennCare, approved the essential provider pool that they would submit a proposal called HELP.
> HELP would provide a payment to the state’s teaching hospitals who provide care for the sickest TennCare patients.
> HELP could bring as much or more than the essential provider payment we just received.
> You can imagine we’re pushing hard for this one.
> As many of you know, we sold our interest in the Vanderbilt Health Plans.
> For those of you who had your insurance under Health 1-2-3, you know that the plan was sold to United Health Care.
> The TennCare part of VHP was sold to the management team, and Vanderbilt retains a small interest in that plan.
> It has now about 15,000 enrollees but it plans to grow to at least 50 or 60,000 enrollees.
–slide —
> In last year’s General Assembly session much of the legislature’s attention was focused on TennCare.
> It was focused on dealing with the possible loss of Blue Cross as its largest MCO.
> It was occupied with trying to stop the erosion of providers.
> And it was determined to make MCO’s more responsive to providers.
> The result was TennCare II.
> And the jury is still out on whether the changes made by the General Assembly and the Governor will bear fruit.
> For Middle Tennessee, there are five MCO’s:
> Blue Care remains in the program for now.
> Xantus and Access MedPlus are both in weak financial condition and – state receivership aside – we will not have contracts with either.
> Access will continue to send patients to us through a third party – USA MCO.
> We will, of course, contract with VHP – we are under a capitation arrangement with VHP and need to work hard to optimally manage those patients.
> The newest player is Universal, a West Coast firm with a background in Medicaid managed care.
> We are considering a contract with them. It appears that without us, they will not have an adequate network.
> The General Assembly required that 85% of all funds received by the MCO’s will be paid to providers.
> So far, only Blue Care and VHP are in compliance.
> Others claim they will make special payments at the end of the year, if they have not spent at least 85% on medical expense.
> It remains to be seen if there will be compliance, or what the State will do if there is none.
> Many of you know that in many specialties, like pediatrics and orthopedics, only Vanderbilt provides service.
> The MCO’s have not been successful in keeping full provider panels.
> The result is that we are the provider of last resort even for MCO’s who do not have contracts with us.
–slide —
> The future of TennCare is still very much up in the air.
> We expect to work hard in the General Assembly.
> We’ll push for permanent essential provider payments.
> The HELP program could provide real long-term relief for academic centers like ours.
> We expect to negotiate carefully with the new MCO’s to ensure the highest possible reimbursement.
> Finally, we’ll work with the TennCare administration to make sure that MCO’s have adequate networks…
> And that they spend 85% of their income on medical expense.
> But perhaps the most important thing the State could do is require participation by all providers in TennCare.
> For too long Vanderbilt’s competitors have avoided providing care to TennCare families.
> They have avoided the financial losses associated with TennCare…
> And they have effectively passed those losses on to us.
> They need to do their share.
> But what happens if TennCare fails?
> To many in the General Assembly, TennCare is a failure and should be dismantled.
> I do not agree.
> TennCare, by insuring those who couldn’t afford commercial insurance and those who, because of their health, are uninsurable…
> Launched a health program unmatched in compassion.
> It has become a landmark for other states.
> But if it fails, what should we do?
> First, we will work hard to make sure that whatever follows will still offer coverage to a broad population.
> This should include establishing a SCHIP program to provide insurance to all children.
> We’ll work for state support of a program for the medically uninsured, so that the neediest of the people in TennCare will still have access to care.
> Finally, we will need to evaluate the impact on charity care.
> Stay tuned: this year will be another important one for the General Assembly and for TennCare.
–slide —
> We started the year with several important challenges that I want to outline.
> They will help set the stage for understanding our performance so far this year.
> At the start of the year, it became clear that salaries for our nurses had to be adjusted.
> The nursing shortage last summer and fall was so acute that we had to close units – especially our highest intensity units, and close some operating rooms.
> The nurses at Vanderbilt are among the most skilled in the area and are regularly sought after.
> To make our workforce stable, we needed to quickly increase salaries.
> The cost was $10 million in this year – an amount that none of us planned or budgeted for.
> Second, we decided to open the Pediatric Emergency Department 24 hours a day, 7 days a week —
> Something of enormous importance to the families in our region and to other hospitals that serve them.
> The cost was just under $1 million.
> Finally, we experienced some profound access problems…
> Bed availability in the hospital…
> Weeks to get a physician appointment in some clinics…
> The Emergency Department on diversion too many days.
–slide —
> There is no question that we can’t meet our goals unless we can begin to solve a constellation of problems and barriers that we’ve collectively named access issues.
> The first one will come as no surprise to any of you who help patients or who drive on 22nd Avenue in midday.
> We simply can’t find enough parking spaces for all of the patients who come here.
> It is partly a function of increased demand for our services.
> In part it is a function of offering free parking to our patients and visitors – something we all want to continue.
> It is also partly due to construction at the Cancer Center and Children’s Hospital that makes access to Capers Garage difficult.
> Here’s what we’re up to to try to solve this problem…
> First, we’re moving every Vanderbilt employee who doesn’t absolutely have to be in the hospital garage out.
> Thank you all for the cooperation and understanding you’ve shown.
> Second, we’re looking at options to park patients in the Capers or 25th Avenue garages and move them by shuttle bus or golf cart to their destination.
> We can help ourselves and our patients by reducing wait time in the clinics – if we could cut overall patient time by an hour, we can increase parking capacity by 25%.
> We’re looking at some other novel concepts like expanding hours that the Clinic operates, so that we can spread the workload over more hours and make ourselves more convenient for our working patients.
> A second major "access" problem is to increase patient appointment opportunities.
> First, we are working to bring on new staff physicians in areas like primary care where it has been difficult to get appointments.
> With the chairs and finance managers of the School of Medicine, we’re working to create clear incentives for our faculty to maximize the number of patients they see.
> Finally, the VMG is analyzing scheduling templates to find out where wait-to-appointment times are longest.
> By reducing time to appointment, we can also reduce cancellations.
–slide —
> We have been on diversion far too often this year.
> We are forced to divert patients from our emergency department and cancel elective surgery when there are not enough beds to accommodate patients.
> When we looked more closely at the statistics, it was clear that our overall occupancy rate didn’t show that we were full.
> We simply lacked beds in midday and early afternoon…
> Times that we needed to have free beds.
> Mark Penkhus assembled a team of staff, analysts and physicians to catalogue the problems and implement solutions.
–slide —
> Here’s what they found…
> Significant parts of the hospital were on diversion better than 25% of the time in the 1st quarter.
> The team looked a little closer and discovered two things…
> First, patients in these key services weren’t being discharged early.
> Instead of discharge orders being written by 9:00am – orders were written after 11:00am, on average.
> Result – we’re working with attendings and residents to ensure that discharge orders are in early to make sure that beds will be available by noon.
> But the study surfaced a second problem – a big delay between orders written and bed empty – on average longer than three hours.
> We’re looking at a host of ways to improve that turnaround time.
> Some things are as simple as making sure that housekeeping alerts the admitting department as soon as possible when a room is cleaned.
> Other things like arranging patient transport and post hospital care are more complex.
> Bed turnaround has improved and continues to improve but we still have a lot of work to do.
–slide —
> It is hard on us but even harder on the community we serve when Vanderbilt goes on diversion.
> Imagine if someone you loved needed a Vanderbilt doctor but we couldn’t accommodate them.
> It is a problem we need to work on.
> Beginning last Fall, diversion can be approved only by Senior administration.
> The steps we’re taking to open up beds more rapidly will help.
> And we’re working with all the critical care units to allow freer cross-bedding so that patients who would typically be housed in one intensive care unit can be housed in another.
> We are back to full staff in our ICU units and we’re planning to bring 15 new ICU beds on-line shortly…
> 6 Neonatal Intensive Care Unit beds, 6 Surgical Intensive Care beds and 3 Pediatric Intensive Care beds.
> We’re also hoping to make streamlining improvements in the Emergency Department itself.
> This morning we presented a proposal for Board approval that will make some improvements in the Emergency Room…
> Expansion of waiting space and creation of a fast track program to help patients with minor emergencies get in and out faster.
–slide —
> Demand for surgery at Vanderbilt has never been higher.
> Keeping up with that demand has pushed us to improve the efficiency and utilization of the OR.
> First, we’ve simply extended hours of operation in Medical Center East and the Main OR’s.
> Second, we’re working on creating new OR capacity.
> We’re ready to open an additional OR right now and are renovating space on 4 South.
> We’ll need 4 new OR’s in this year to meet our surgical goals.
> In addition to those new OR’s, we’re looking at leasing space from someone else like the Veterans’ Administration or other facilities.
> Now that our ambulatory surgery center in Cool Springs has opened, we are working to off-load surgeries now done on campus to that new facility.
> We’ve improved OR utilization pretty dramatically – by 8-10% in the past year, depending on the OR suite.
> On-time starts and reduced turnaround times are a major focus of the current OR redesign effort.
–slide —
> There are few things that are harder to deal with than space that has outlived its usefulness.
> In the scramble to build new facilities we must always make sure we’re spending enough on our current space.
> I’ve heard from many of you that renovation and renewal of space is important.
> This year we’ll spend about $9.9 million on renovations in clinic and hospital space.
> We’ve launched seven renovation projects already this year.
> And we’re building out the 6th floor of MCE for primary care and plastic surgery.
> The important complement to facility restoration is equipment.
> We need to replace aging equipment…
> from things as simple as blood pressure cuffs to a new linear accelerator for radiation oncology.
> We have more than $3.8 million budgeted for replacement of equipment.
–slide —
> Finally, high on the hit list of access issues is creating better ways to help our patients get here.
> It doesn’t help our efficiency much if the staff and the doctor are all ready for the patient, but they are hopelessly lost in the TVC or Medical Center North.
> This is a remarkably complex place – hard enough for those of us who work here to find our way – let alone the elderly couple from Bowling Green.
> First of all, let me thank all of you who go out of your way to help our patients get to their destination.
> Every day I see Vanderbilt people help others find their way.
> It is an act of great human kindness to those who are lost, but it also makes this a better, more caring and more efficient place.
> We are trying to do our part…
> New signage in the TVC has helped a lot but…
> We need to do more.
> I’m firmly committed to including funds in every capital budget to provide signage and wayfinding.
> And, I am adamant that we need to set aside funds to improve signage from the highway to the exam room in all of our existing facilities.
> Access will remain a significant issue for the foreseeable future.
> It will expand to include how we handle telephone calls and set appointments…
> how we register patients and collect information.
> There is much more to be done.
–slide —
> The pace and volume of medical discovery is dramatic.
> Revelations about the human genome in the past week are generating a whole new way to understand human biology and the intricate interplays between genes and proteins and the interaction of proteins with each other.
> This month’s Journal of the American Medical Association (JAMA) is devoted to projecting the future of medical research.
> It is sure to be a well read and often quoted discussion of how research will unfold and what wonders it will produce in the next 25 years.
> Last week the federal Council on Economic Competitiveness released its long awaited report that strongly recommends increasing federal funding for research in basic, especially biologic sciences.
> Our commitment to growing research at Vanderbilt could not have come at a more fortunate time with growing federal resources.
> The funds we’ve committed to building our research capacity have begun to bear real fruit.
> In the first six months of this fiscal year, we are already at 80% of the grant funds we got last year.
> That was after a better than 25% increase posted between 1999 and 2000.
> Lee Limbird is projecting a 15% increase in direct grant funds by the end of the year.
–slide —
> We continue to make substantial investment in our research enterprise from hiring new and accomplished faculty like Heidi Hamm to chair Pharmacology and Bob McDonald to chair Neurology to…
> Significant investments in infrastructure.
> Bolstering our Institutional Review Board
> Building our clinical research capacity through the Clinical Trials Center and the biostatistical core.
> Establishing our genomics tools through our relationship with Celera will accelerate our discoveries in genetics and protein biology.
> We continue to emphasize our three research foci in neurosciences, structural biology and genetics.
> The vivarium is in final planning and…
> MRB III is about 12% complete with an expected opening date of July 2002 for the new building portion and June 2003 for the Learned Lab renovation.
> One of the highlights of this year’s research achievements is the growth of grants under the Meharry Vanderbilt Alliance.
> The concern about the disparate impact of disease on minority population is growing among public health officials and the NIH and CDC.
> Meharry and Vanderbilt are well positioned to lead the nation in examining the root causes of these disproportionate impacts.
> Our research base through the Alliance will grow to more than $10 million this year and has shown a remarkable growth pattern over the past four years.
> I want to turn for a moment now to the Medical Center’s financial performance.
–slide —
> The green bars on the chart show, month-by-month, our actual result and the blue bars show our budget plan.
> After a strong first quarter our financial performance fell well behind budget in the second quarter.
> In part, this reflects the additional costs of nursing salary adjustments and the pediatric emergency department…
> And in part, it shows the access bottlenecks that we are trying to remedy.
> You can see that January has improved over December.
> It is encouraging, but still below our aggressive budget plan for this year.
> On the right you see that our results to date are at $8 million – about $3 million behind our budget
> We’ll need to continue to improve to meet our forecast of just under $19 million.
> Take a look at the statistics so far this year.
> Here’s a quick snapshot of admissions, clinic visits, and emergency room visits through January.
–slide —
> Again the green bars show actuals and the blue show budget
> Admissions are down by 1.9% against our budget plan…
> Due in part to access issues, but more importantly to a sharp drop in admissions during the holidays.
> Note that our case mix index – a simple measure about how sick our patients are – has increased significantly by 3.6%
–slide –
> Clinic visits are down against budget and only slightly above last year.
> In this, as in hospital admissions, much of the shortfall occurred during the holiday period
–slide —
> ED visits were up over last year by nearly 10.5% and up by 8.7% against budget.
> Some of the cause of our repeated periods of diversion early in the year were a result of this strong performance.
–slide —
> Despite all of that, our net revenues were up by 10.1% over last year and 4.3% over budget…
> The result of better managed care contracts and a higher case mix index.
> Our expenses, however, exceeded both last year by 8% and budget plan by 5.5% mostly the result of greater than anticipated salary costs and a slightly sicker patient population.
–slide —
> So far 2001 has been another banner year for philanthropy.
> Through six months of this year we have collected just under $50 million in gifts.
> If you exclude our large extraordinary gifts, we have still raised an impressive $26.4 million.
> If the second half of the year is as good as the first half, our total revenue from gifts could exceed $70 million.
> I want to specifically congratulate Bob Feldman and his merry band of fund-raisers.
> Without their skill and determination, we would be hard pressed to achieve what we have.
–slide —
> As powerful a potential revenue tool as fund raising, our technology transfer efforts continue to grow.
> Here the white bars represent patent applications, the green bars are awarded patents and the blue line represents royalty income.
> Our royalty revenues are ready to exceed last year’s record level for 2000.
> Only half way through this year and our royalty revenues have already topped our performance for the whole of 1999.
–slide —
> The newly created Vanderbilt University Technology Corporation has become our vehicle for bringing new ideas to a marketable and profitable state.
> The corporation capitalizes on discoveries made here or owned by Vanderbilt – through patent, license or contribution.
> Earlier this year, we announced a gift from Procter & Gamble – the patents they had developed for a COX-2 inhibitor.
> Those patents alone could be worth millions of dollars.
> The Technology Corporation takes each intellectual property and defines an appropriate path to commercialization and the necessary financing tools.
> The Corporation will use federal financing tools like the SBIR programs to test concepts.
> We have established an Investment Fund from the University’s Endowment called the Chancellor’s Fund.
> This fund invests at a very early, what we call pre-seed, stage as well as first round of major funding.
–slide —
> Our portfolio of technology companies continues to grow.
> Here is a partial list of VUTC’s corporate holdings.
> EBM Solutions (the former webEBM) is ready for its second round of capital investment.
> It is one of the few eHealth companies around with an attractive investment profile.
> MXISystems is a technology that arises out of research with the free-electron laser.
> This technology generates "x-rays" that allow very high resolution with a lower radiation dose.
> With MXIS x-ray procedures like mammography may be able to detect cancer too small even for surgical removal.
> IntelliTX is the venture to commercialize the health informatics system developed here by Bill Stead and his team.
> Already IntelliTX is busy finalizing its first round of funding.
> PharmaVU is our newest creation – a company that will develop drugs and bio-assay tests both those devised in our labs and those, like the P&G compounds, that are donated to us.
> PharmaVU is building a stable of potential venture partners.
> The drugs developed can take a number of routes to the market…
> Simply license the discovery to a drug company
> Take the drug through some or all of its FDA trials and then sell or joint venture or
> Develop a company around the compound.
> If any of the companies become successful, it could mean millions of new dollars to Vanderbilt to support our mission.…
> I look forward to the February when I can bring you news of one of these success stories.
–slide —
> Over the past several months the leadership in the Medical Center has carefully evaluated our strategic objectives.
> We have committed to almost $300 million in new construction…
> 2/3 of that construction is in patient care facilities;
> 1/3 is in support of research.
–slide —
> In addition, we have another $423 million in proposed building programs–
> In total about $700 million in new capital spending, about evenly divided between patient care and research.
–slide —
> We will undoubtedly be able to raise some of this need through philanthropy…
> About $166 million is our best guess today.
> After factoring in new affordable debt for our current building projects, we still need to find $344 million.
> Not only that though – we also need $160 million to fund capital replacement for our existing facilities over the next five years.
–slide —
> We set about trying to discover what level of clinical achievement we need to meet that investment requirement.
> Here’s what we found…
> We looked at modest improvements in both volume and efficiency.
> We proposed increasing admissions by 2% each year in the first three years and 5% in the last two years of a five year plan.
> We also proposed increasing physician visits by 5% from 2001 to 2003 and 6% in 2004 and 2005.
> The growth in hospital admissions in the first three years is actually less than our historic growth rate
> And the higher growth rate in the last two years accounts for the opening of our new Children’s Hospital.
> The growth projections for clinic visits also actually track below our historic growth rates.
> But volume growth alone is not sufficient, at least at the levels projected to meet our investment needs.
> So we next looked at improving our efficiency.
> We assumed that cost per discharge could be cut by 2% each year…
> And the cost per outpatient visit could be cut by 3% each year.
> The savings were significant and cash flow improved even more than if we had expanded our volume.
> However, even improving efficiency at that level doesn’t meet our total investment need BUT
> Combining both modest volume increases and achievable cost savings across the next five years will allow us to meet these goals.
–slide —
> We have some very important challenges before us this year.
> First, we need to get back on track with our budget.
> The kind of access solutions we’ve put in place should go a long way toward removing bottleneck and barriers that have slowed our growth.
> As we begin the second half of the budget year, we need to carefully assess those programs whose budgets are well out of line.
> Finally, we need to keep improving our reimbursement rates from payers whether government or private.
> We talked earlier about our hopes for TennCare recovery, but we’ve also been working hard with our commercial insurers.
> Some times our negotiations will not be successful.
> As of March 1, we will no longer contract with any of the Aetna Prudential plans.
> The reimbursements offered for both physician and hospital services were not adequate.
> It is a hardship for our patients, and we’re doing everything we can to make sure those patients, especially children, can continue to be seen here.
> In the meantime, we’re working hard to replace Aetna with patients from Blue Cross, United, Cigna and other payers who have dealt with us in good faith.
–slide —
> The year 2000 has been in many ways a remarkable year.
> Many of you may have noticed some new newspaper ads we’ve begun to run about three awards we’ve won this year.
–slide —
> For the second year in a row the National Research Corporation has recognized in their consumer preference survey that Vanderbilt is the top hospital in Nashville based on a survey of 700 households.
> The award is given to the hospital which consumers feel offers the highest quality and reputation.
–slide —
> HCIA-Sachs annually selects the top 100 hospitals in the country.
> The selection is based on a combination of factors including clinical quality, efficiency of operation and profitability.
> Vanderbilt was one of only 15 academic medical centers chosen in the country and the only one in the Southeast.
–slide—
> The US News and World Report Annual Best Hospitals edition draws a remarkable amount of comment and interest every year.
> The rating is based on objective criteria as well as the subjective opinion of board certified physicians from across the country.
> Whatever your opinion of the US News Best Hospitals, it is clear that the rankings add prestige.
> It is also clear that our prestige in this publication grows each year.
> In the 2000 edition, Vanderbilt is ranked in 11 of 17 specialties.
> And in 9 of 11 cases Vanderbilt’s rating improved.
–slide —
> We should all be very proud of these achievements.
> They are a solid and continuing reminder to the community of the worth and value of this institution.
> And the value of all of our individual contributions to Vanderbilt.
> Congratulations…
> And thank you all.
–slide —
> There is one more study I want to spend a little time looking at.
> Since 1996, Professional Research Consultants – PRC – has surveyed 1900 households across middle Tennessee.
> We use this survey to assess how we are perceived in comparison to other hospitals in the region, both overall and for each of the services offered.
> Opinions and preferences are influenced by a lot of things – most powerfully by experience…
> But also by word of mouth, from the media and through advertising.
> The sentinel question asked in this survey is "What hospital do you prefer if you or a family member needs one?"
–slide –
> In 1996, you’ll see we were in a tie for fourth place.
> We began our Hearts and Minds advertising campaign just after that.
–slide -–
> Two years later our preference ratings had put us in a dead heat with St. Thomas but still well behind Baptist.
> For one of the world’s best healthcare institutions we didn’t seem very well recognized.
> All that has changed…
–slide –
> The survey completed last month shows that we are now the most preferred hospital in all of middle Tennessee.
> If you look closer, you’ll see that while our reputation is steadily improving, our competition is either losing ground or is flat.
> I know that some of you may wonder why this is important.
> Preference takes a long time to build, but once set it is very difficult to change.
> Preference always precedes action, and even more so in healthcare…
> Where decisions must be made quickly and often are based on image and reputation.
> Our goal from a marketing standpoint is to achieve a 20% preference share.
> If we are able to achieve that, our volumes will continue to grow and the demand for our services will allow us to attract premium reimbursement.
> I want to walk you through a few more of the PRC findings…
–slide # —
> Here’s a little more data that we get from the PRC study.
> Here are four graphs laid out in the same way with Vanderbilt’s data on the left, followed by St. Thomas, Baptist and Centennial, with a column for "don’t know" at the end.
> The three bars are measures for 1996, 1998 and 2000 from left to right.
> The first measure is quality of care – in 1996 the public perceived almost no difference between us and St. Thomas and Baptist.
> Four years later we are close to doubling the rates of our two biggest competitors.
> Physician quality tells a nearly identical story.
> In nursing quality, we had one-half the preference of our nearest competition.
> Four years later, we are considered to have the best nurses in town.
> The fourth chart looks at who has the lead in technology.
> On this measure Vanderbilt has always led the field…
> But look at these results – in four years we’ve gone from having a six percent advantage to having a preference that is four times the competition.
> Take a look at those figures and imagine how you’d feel if you or someone in your family was facing a health crisis.
> It is little wonder that demand for our services is growing.
–slide —
> This next set of charts showed how people felt about various major services.
> Here are four of those services — the charts lay out the same way with Vanderbilt on the left.
> In cancer – hard to imagine but four years ago middle Tennessee believed there was little difference between the major hospitals in their ability to deal with cancer.
> Four years later, preference for Vanderbilt is nearly three times that of our nearest competitors and moving away.
> In children’s services, preference for Vanderbilt is about 5 times that of the other Davidson hospitals.
> If you look at Vanderbilt’s preference in households with children under 18, our preference is nearly 70%
> In cardiology St. Thomas still dominates, though its franchise seems to have peaked despite a major advertising push this year.
> We’ve made inroads and are now the clear alternative, but this is an area of future focus for us.
> Emergency Services at Vanderbilt were considered no better than our competition in 1996.
> Again, in four years we have tripled our preference rating, while Baptist and St. Thomas have stayed flat.
> I wanted all of us to take a moment to reflect on the awards we’ve won and on the clear preference in the market that we have created.
> It is impressive and stands as a clear recognition of the hard work, the dedication and the spirit you have brought to Vanderbilt.
> I hope you are as proud as I am of our achievements – both clinical and academic.
> We have consistently promised that the success of the Medical Center should be shared with all of you who make it possible.
> I made that pledge two years ago in this state of the Medical Center address…
> That as our performance improves, so should your salary.
> In our employee satisfaction survey, you let us know a lot…
> that you enjoyed and were challenged by the work you do…
> that you embraced the mission of the medical center…
> that you liked and respected each other.
> But we also learned that you were unhappy about some other things…
> that you weren’t rewarded when the organization was successful
> that performance evaluations and promotions were less objective than they should be…
> and that you felt your salary did not adequately reflect your value.
> I want to spend my last few minutes talking about what we are trying to do to make you even more satisfied and even more productive.
–slide —
> Our new Performance Development Program is being launched this week.
> You will all be getting a letter at your home talking about how the new program will work and what it will mean to you.
> It’s based on a few simple principles.
> First, healthcare is labor intensive – that means that people are very important.
> The cost of training people who work in health care is staggering, and replacing lost workers is expensive.
> Gains in performance of the overall healthcare system are critically dependent on staff performance and productivity.
–slide —
> If people are the most important asset we have, what are we doing to support them and help them make themselves more valuable.
> First, we continue to invest in training at all levels of the medical center and through our continued commitment to The Learning Center.
> We completed a first-of-its-kind employee satisfaction survey to make sure we knew how to support our staff.
> We plan to repeat the survey this spring – this time it will involve all University employees – to see how you feel we’ve done.
> We spent a year and a half carefully reviewing and rewriting job descriptions to make sure they were lined up with the goals of the medical center…
> And to make sure the job descriptions set objective performance standards.
> Last year we took our first "baby" steps in sharing the financial success we achieved with all of you who work here with a one-time bonus payment.
> Now we’re ready to launch a real pay for performance reward system.
–slide —
> There are five critical elements that we are now confident are in place…
> We have clear job descriptions.
> Those job descriptions set objective standards and our round of performance appraisals last Spring have set clear performance expectations for this year.
> The performance appraisals for all staff are due this Spring.
> Based on those appraisals, staff will either work through a performance improvement plan or be eligible for a salary adjustment
–slide —
> Last week training began for all managers to be trained in the requirements of the new system.
> All staff evaluations will be done by April 30 –
> Fair warning – any managers who have not completed their performance appraisals by April 30 will not be eligible for salary adjustment.
> The salary adjustments will be computed and made effective July 2001.
> There are four key issues to watch…
> Supervisors and staff are responsible for making careful and thoughtful evaluations.
> Those evaluations should be made in light of the expectations agreed to last Spring.
> The appraisals should be done to the maximum extent based on objective measures.
> And ratings need to be tested for consistency across all units to make sure that the ratings process does not differ from one department to the next.
–slide —
> Like last year, final appraisals will carry a numeric value 1 through 5 based on a number of subscores.
> Performance ratings of 1 and 2 indicated performance that is below standard and calls for performance improvement counseling.
> Ratings of 3 and above make the staff person eligible for a salary adjustment based on performance.
> Staff with a rating of 3 are fully competent, meet all requirements and standards of their job and probably will include about 60% of all staff.
> Staff with a rating of 4 are proficient in their jobs and often exceed standards – probably about 25% of the staff.
> Staff with a 5 rating are considered expert and take on team leadership roles.
> About 10% of all staff fit this criterion.
> The pool of funds for performance development incentives will depend on the Medical Center’s overall financial performance.
> If financial performance in FY 2001 exceeds expectations the pool for wage adjustments will be increased.
> While all staff with evaluations at 3 or above are eligible for performance incentives…
> Those with 4 ratings will be entitled to a greater adjustment than those with 3 ratings.
> Those with 5 ratings will be eligible for the maximum increase.
> We will continue to adjust salaries to meet market conditions as we did this year with nursing salaries.
> Those market adjustments will be provided to all employees in effected job classifications (provided they are not rated 1 on their performance appraisal).
> Salary adjustments based on performance will then be added above and beyond those market adjustment amounts.
> In many ways the future does belong to us.
> We’ve become a formidable healthcare institution in the region and we’re growing stronger.
> Our researchers are among the world’s best respected.
> The future of medicine is being formed right here and in places like Vanderbilt across the country.
> It is great to be a part of shaping that future.
> As is our tradition it is now your time to share your opinion and comments and to ask the questions on your mind.
> After the question and answer session – stay around for the drawing for door prizes and refreshments.