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Regional West implements austerity plan
November 07, 2013 Jerry Purvis   

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Regional West Medical Center has announced it will begin a reorganization plan aimed at slicing some $20 million from its budget in response to changing demand for medical services.

The reorganization plan was developed after the board asked what had to be done to retain local control of the Medical Center. The $20 million budget cut represents about eight percent of the facility’s total expenses.

That measure is common around the state and nationwide, as most hospitals are trying to cut about 10 percent of their expenses.

One measure will be to eliminate duplications by merging the Physicians Clinic and the Medical Center, which are now separate entities. Another is the implementation of new electronic medical records along with an information technology upgrade over the next 18 months. That would have the potential of saving $4 million.

Regional West President and CEO Dr. Todd Sorensen announced the plan and also indicated he would retire at the end of 2014. “I’m dedicated to the organization but I’d rather not die here at work,” he said. “We’ll recruit a chief operating officer to be onboard the middle of next year, so we can made the transition as smooth as possible.”

Sorensen said most of the savings could be accomplished by improving processes at the hospital. “We don’t plan across-the-board layoffs or pay cuts right now. I can’t say we’ll ever do that, but it’s in our current plans.”

Sorensen said the reorganization plan addresses three areas: demographic trends, trends with providers and trends with the economy and healthcare reform.

“With demographics, there’s been a slow population decline in the Panhandle over the last couple of decades,” Sorensen said. “That comes at the same time as rapid growth of the surrounding areas in Colorado and western South Dakota.”

He said that growth has created a capability gap between Regional West and large neighboring facilities. Patients that needed specialized procedures used to have to travel to Denver, but no longer. Those procedures are being offered in Cheyenne, Ft. Collins and other facilities. Consequently, Regional West grew as a referral center.

“We’re seeing a significant decline in volume here over the last 18 months,” Sorensen said. “Also physicians have become more mobile. The days when a doctor stayed with one practice for his career are over.”

The economy and healthcare reform are also big issues. “There’s a lot of financial stress on consumers,” Sorensen said. “Employers are also driving changes in benefits plans.”I think the national slowdown in healthcare services is likely to persist with continued downward pressure on payments we’ve received.”

Some of the options the Regional West board considered were affiliating with a larger system with or without a change of control. They already have affiliations without change of control now. Regional West is part owner of the Medical Center of the Rockies in Loveland, Colo. they also have an affiliation with the Buffett Cancer Treatment Center at the Nebraska Medical Center in Omaha.

Although the reorganization plan is underway, Sorensen said some values will always remain the same. They will achieve and maintain zero serious safety events. They will assume responsibility and accountability in all of their operations. And they will communicate openly for clarity and mutual understanding.

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