Archive for category: Management

Leadership Analysis of a Healthcare Systems Organization

It is not uncommon for healthcare organizations to restructure, reorganize, or change ownership on a somewhat frequent basis. As the business of healthcare is ever-changing, many organizations must change to meet the demands of the industry, the patients they serve, and the professionals that serve them.

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For this first week’s assignment, you are going to explore CHS (Community Health Systems) leadership culture. What type of leadership methodologies does the organization subscribe to? Were these the same prior to undergoing a change? Why do they believe in them and encourage them?

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In particular focus in on these areas:

1.) Leadership Skills and Behavior

What are the mission, objectives and priorities of the organization? How are these communicated?
How are management techniques and theories incorporated into leadership activities?
How does leadership analyze problems, promote solutions and encourage decision making?

2.) Engaging Culture and Environment

Does the organizational climate encourage transparency, mutual trust and focus on service improvement? Does it encourage teamwork and support diversity?
Does the organizational culture encourage a high level of employee commitment by communicating a compelling organizational vision and goals?
Does leadership hold themselves and others accountable for surpassing organizational goals?

3.) Leading Change

Does leadership promote ongoing learning and improvement?
Do they respond to the need for change and lead that process?

4.) Driving Innovation

Does leadership encourage diversity of thought and support innovation, creativity and improvement?

COMMUNITY HEALTH SYSTEMS ARTICLES BELOW

ARTICLE #1

Franklin-based Community Health Systems is selling three Virginia hospitals in the final stretch of the health system’s divestiture plan to pay off its bad debt.

CHS has agreed to sell the assets of 300-bed Southside Regional Medical Center in Petersburg, 105-bed Southampton Memorial Hospital in Franklin and 80-bed Southern Virginia Regional Medical Center in Emporia to subsidiaries of Cincinnati-based Bon Secours Mercy Health, who already has a big presence in the state.

According to Modern Healthcare Metrics data, Southside Regional was generating a 2.1 percent operating margin with $4 million in operating income in fiscal year 2019. Southampton Memorial posted a negative 33 percent margin with losses of $13.2 million in 2018, and Southern Virginia Regional lost $11.2 million on $24 million in revenue in its most recent fiscal year.

The transaction is expected to close by the end of 2019. Based on other CHS hospital sales this year — which valued its facilities on average at $169,000 per bed — CHS stands to take in about $82 million on the 485-bed sale.

Of note, a 76-bed West Virginia hospital CHS sold last year owes the health system more than $651,000, according to the hospital’s bankruptcy filings. A CHS subsidiary has sued Mingo Health Partners for the money, which was used on surgical implants and supplies as well as billing and IT services.

CHS shares (Ticker: CYH) climbed 3 percent Monday to close at $4.60. The stock has more than doubled since hitting its 2019 low in late August.

ARTICLE #2

One of the Richmond region’s major health care providers is buying three hospitals in Virginia, including Southside Regional Medical Center in Petersburg.

Cincinnati-based Bon Secours Mercy Health, a not-for-profit Catholic health care system with more than 40 hospitals, announced Monday that it has signed an asset purchase agreement to acquire the three hospitals from affiliates of Community Health Systems Inc., a Franklin, Tenn.-based owner of 102 hospitals in 18 states.

In addition to the 300-bed Southside Regional Medical Center in Petersburg, the deal includes Southampton Memorial Hospital, a 105-bed hospital in the city of Franklin; and Southern Virginia Regional Medical Center, an 80-bed hospital in Emporia. They are Community Health Systems’ only hospitals in Virginia.

Financial terms of the deal were not disclosed. Bon Secours said Monday that both companies are working to finalize a deal and expect it to close by the end of this year.

In the Richmond area, Bon Secours operates St. Mary’s Hospital, Richmond Community Hospital, Memorial Regional Medical Center and St. Francis Medical Center. It also owns Rappahannock General Hospital in Kilmarnock.

Southside Regional Medical Center has a 50-acre campus and employs about 380 physicians working in more than 40 specialties. The hospital also has seven satellite outpatient centers, according to its website.

In July 2018, Southside Regional Medical Center opened a 24-hour emergency care center in Colonial Heights. The facility has 10 exam rooms, diagnostic imaging and lab services.

Southside Regional Medical Center traces its roots to the Petersburg Home for the Sick that opened in 1884. The name changed to Petersburg Hospital in 1886 and to Petersburg General Hospital in 1953.

The name changed again to Southside Regional Medical Center in 1986.

In 2003, the Petersburg Hospital Authority sold Southside Regional to Community Health Systems.

The new owners built a new $145 million hospital, which opened in July 2008, relocating the hospital from 801 S. Adams St. near downtown Petersburg to Medical Park Boulevard.

Community Health Systems has been selling hospitals as the company seeks to stem losses related to declining admissions.

The company sold 11 facilities and closed three others in 2018. It reported a $788 million loss for 2018, less than its loss of about $2.4 billion in 2017.

The company announced in August that it had sold nine hospitals to date in 2018. Later in August, it announced that it had completed the sale of two hospitals in Florida, and in September, it sold a hospital in Bluefield, W.Va.

The deal to sell the Virginia hospitals comes less than a week after Bon Secours named a new president for the health system’s Richmond market. Faraaz Yousuf was named to replaced Toni R. Ardabell, who left the role earlier this year for a job at Inova Health System in Northern Virginia.

Yousuf, who will start the job on Dec. 1, currently is responsible for strategic planning for Bon Secours Mercy Health’s Atlantic Group, which includes five states from New York to Florida.

When the deal is complete, Southside Regional Medical Center and Southern Virginia Regional Medical Center will become part of the company’s Richmond market, led by Yousuf, a spokeswoman for the health care system said.

Southampton Memorial Hospital will become part of Bon Secours Mercy Health’s Hampton Roads market, which is led by Amy Carrier, the spokeswoman said.

“Bon Secours Mercy Health is strategically focused on how we can best fulfill our mission and meet the needs of our patients and communities,” John Starcher, Bon Secours Mercy Health’s president and CEO, said in a statement.

“Southeastern Virginia is a very attractive growth market, and we look forward to continuing to invest in the health and well-being of area residents, while ensuring our facilities are places where associates want to work, clinicians want to practice, people seek wellness and communities thrive,” Starcher said.