What started as a bleak 2010-11 fiscal year for El Camino is showing signs of improvement as the books were closed on the first quarter.
Bob Dvorak, interim chief financial officer for El Camino, seemed somewhat optimistic as he reported on October, the hospital's fourth month of the fiscal year, at the board of directors' meeting Dec. 8. In June, the hospital approved a budget that assumed a loss in income from operations of $16.8 million by the end of October; instead, El Camino had a total operational income of $449,000, beating its forecasted budget by $17.25 million.
In an e-mail to the Voice, Dvorak credited the Accelerating Continuous Excellence — or ACE — program with El Camino's current financial standing, but noted that the health care organization still has work to do.
"We are still not at a sustainable operating income performance level," he wrote, "but are starting to see the benefits from our ACE initiative generating positive operating income and have guarded optimism of achieving our budgeted operating income targets by the last quarter of fiscal year 2011.
While inpatient medical procedures are down from last year, according to Dvorak, certain outpatient procedures are running ahead of budget and the hospital is doing better than it budgeted for in labor and supplies.
Not all initiatives aimed at cutting costs fall under the purview of the ACE program.
Prior to the introduction of ACE earlier this year, Cheryl Reinking, vice chief of clinical operations, set out to save money by reforming a practice known as "constant observation."
Under this practice, patients who are deemed at risk of attempting to get out of their beds and potentially falling down, were watched over by a dedicated patient safety attendant. Reinking, who had read of other institutions cutting back on constant observation staff by using one attendant to monitor multiple patients, introduced a new system called "increased observation." Now, one attendant monitors four patients at a time. The new system has already saved the hospital $163,820 on patient safety attendants. There is a lesson to be learned from this savings, Reinking said.
"I think there are many areas in the hospital where we can learn to be efficient without sacrificing quality," she said. "We have to be more efficient as we look ahead to health care reform."
Looking forward, the El Camino board of directors recently modified the charter of the hospital's executive compensation committee to allow for a freeze or reduction in executive salaries "when financially prudent," a stipulation which had not been in the charter before.
The charter also made cuts to executive's severance packages. Now, the severance period for executives terminated without cause will last only six months, instead of the previous 12 months.
Chris Ernst, an El Camino spokeswoman, wrote in an e-mail that the changes to the severance package and pay structure for executives was modified in light of the competitive practices of other area hospitals, and takes the recession into account.