Here is how a non-profit healthcare facility turned the budget over to its employees and reaped a windfall. George Mikitarian is the president and chief executive officer of Parrish Medical Center (PMC) in Titusville, Florida. Mikitarian and his executive management team run a 210-bed, 1,025-employee, non-profit healthcare facility in North Brevard County, where economic trends mirror those of the nation. Surprisingly, PMC is the only local hospital that hasn\u2019t cut staff and has publicly stated that layoffs will be its \u201clast strategy.\u201d \u201cYou see healthcare organizations laying people off, and it\u2019s not helping [the hospitals\u2019] situation,\u201d says Mikitarian.<\/p>\n\n\n\n
PMC decided to leverage an existing communication strategy called \u201cTown Hall meetings\u201d to explore further budget cuts. \u201cWe needed a lot of time with staff to explain what we were foreseeing, what our logic and theories were relative to where healthcare was going,\u201d explains Mikitarian. \u201cWe were trying, without gloom and doom, to educate [our staff on] why we thought we had to make some cost reduction moves to really engage people in conversation.\u201d<\/p>\n\n\n\n
PMC has a culture of inclusion, and it seemed natural to involve employees in budget decisions that would affect all of them. For instance, over the past eight years, PMC employees have been updated monthly on performance in five areas: patient satisfaction (service), employee satisfaction and employee initiatives (people); quality goals and initiatives (quality); any new program market growth initiatives (growth) and the hospital\u2019s financial condition.<\/p>\n\n\n\n
Copies of PMC\u2019s performance results are posted each month at the Titusville city library and city hall and on PMC\u2019s Web site, at its health and fitness center, and in every building on the hospital\u2019s campus. So there was already a communication structure in place \u2014 which PMC calls a \u201cgame plan\u201d \u2014 that could be adapted for large-scale discussions like the ones PMC leaders knew they needed to have.<\/p>\n\n\n\n
PMC\u2019s proactive communication strategy set the stage to deliver unpleasant news. \u201cIt\u2019s hard to establish credibility and trust and a relationship [with employees] if you haven\u2019t been doing it all along,\u201d says Mikitarian. \u201cAnd that\u2019s what\u2019s required when you have to hunker down and get to the meat of things.\u201d<\/p>\n\n\n\n
Town Hall meetings (also called the PMC \u201cfamily budget discussions\u201d) were led by Mikitarian. At these meetings, employees received an update on the state of the economy from the CEO and were reassured by him that layoffs were a last resort, but it would require the commitment of every employee to help find ways to reduce expenses and cut costs. Employees had the opportunity to ask questions and share their ideas during the Town Hall meetings. But there were still a lot of good ideas out there, and PMC leaders wanted to hear them \u2014 and they wanted to make sure that the 1,025 staff members also heard from leadership. During their monthly department meetings, every manager asked employees for ideas to cut costs while maintaining or improving service.<\/p>\n\n\n\n
Between the Town Hall meetings and departmental meetings, PMC staff members came up with 315 budget-cutting ideas that were passed on to the communications and service excellence department. That department categorized employee ideas into areas like salary\/benefits, recognition\/rewards, patient experience, and new revenue possibilities and entered them into a spreadsheet. PMC was careful with the ideas they implemented; yet the first round generated $3.6 million in cost savings for the hospital. And, because these ideas came from employees, buy-in was essentially ensured \u2014 most of the people who were affected by the cuts approved of them before they were even given a green light<\/p>\n\n\n\n
The spreadsheet then was sent to department heads for their review. This group investigated the likeliest possibilities and conducted focus groups with employees. \u201cIf you start making arbitrary guesses about [where to] cut instead of strategically looking for the biggest bang for the buck,\u201d says Mikitarian, \u201cyou can create a list and get all excited and start accepting all of the ideas, then wind up just irritating people and gaining nothing for it.\u201d<\/p>\n\n\n\n
\u201cWe continue to keep people informed [throughout the cost-cutting process] about the status of their recommended cuts,\u201d says Mikitarian. \u201cYou don\u2019t want to turn around one day and discover that no one\u2019s following the ideas you thought they suggested and were okay with three or four months ago. So we want to make sure that we continue to communicate where we are with their recommended cuts and keep reporting back to the employees.\u201d<\/p>\n\n\n\n
Mikitarian concludes: \u201cYou\u2019re competing to improve your own culture and the engagement of your employees. The creativity employees will show, the productivity improvements made, the turnover reduction, that entire aside; you don\u2019t have to compete as significantly on salary. Competing on a salary-by-salary basis with other organizations is not a financially viable strategy long term; you can\u2019t keep it up. Engagement, though \u2014 engagement builds on itself.\u201d<\/p>\n<\/body>","protected":false},"excerpt":{"rendered":"
Here is how a non-profit healthcare facility turned the budget over to its employees and reaped a windfall. George Mikitarian is the president and chief executive officer of Parrish Medical Center (PMC) in Titusville, Florida. Mikitarian and his executive management team run a 210-bed, 1,025-employee, non-profit healthcare facility in North Brevard County, where economic trends […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15,12,17],"tags":[],"class_list":["post-144","post","type-post","status-publish","format-standard","hentry","category-leadership","category-management","category-management-strategy"],"yoast_head":"\n