Hospital of Choice
A big year for The MED's big plans.
photographs by Larry Kuzniewski
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For the Regional Medical Center at Memphis, 2012 was a watershed year. The MED made several announcements about significant investments in the hospital’s future. In light of how financially troubled the medical center was as recently as a few years ago, the indications of where the hospital is headed are borderline startling.
If ever there was a place that needed a change, it was The MED in the first decade of the twenty-first century. The public hospital with a Level 1 Trauma Center is the safety net facility in a 150-mile radius. That means the most dire medical cases in a multistate region wind up at The MED. It also means that The MED will treat those patients regardless of insurance coverage.
Because it receives funds from a number of state and local governments, and those entities were going through budgetary crises, The MED wasn’t getting the cash it needed to operate effectively. At an alarming rate, it was losing patients and money (more than $30 million in three years), and making negative headlines on a regular basis. Talk rumbled of shuttering The MED.
The low point might have been when The MED ran through five CEOs in 18 months and there was considerable turnover on the board of directors. Tammie Ritchey knows because she was there. Ritchey became executive director of The MED Foundation in 2004; when she was hired, it was a small foundation staff, but hospital leadership was stable, and good grant money was coming in.
That was before the economic realities hit, changes in insurance and TennCare meant seismic changes in the influx of patients, and a rash of executive turnover plagued the hospital. The MED was eating million-dollar medical bills from uninsured patients. To Ritchey, the biggest challenge was the vacuum left by a lack of leadership. “The staff, physicians, and nurses banded together and did the best we could with what we had,” Ritchey says. “But when you start losing people at the top you lose them at the bottom, too. We were still able to deliver quality care, but you can’t plan for the future.”
Most of the rest of the decade was characterized by damage and damage control. The MED had become a bad word. “It reached a critical financial state — days on cash in single digits,” says CEO of The MED Reginald Coopwood, who took over the hospital in 2010. “What was in the press was real.”
New revenue streams have been created by expanding services and, crucially, revenue was protected by improving customer service and making sure that patients who came to The MED who could afford to transfer when they recovered, didn’t. “When I came here,” says Coopwood, “the statement was, ‘If you’re in a bad wreck, go to The MED, but when you wake up, get out of there.’ By not managing that, the organization lost millions of dollars. When we can discharge, we can bill and collect for the full amount. Just that alone changes the revenue picture.”
The MED’s payer mix (revenue coming from private insurance, government insurance, or individuals) in 2010 was more than 30 percent uninsured. Today it’s about 26 percent. “That doesn’t mean we kicked anybody out of the hospital. We just grew the end with more government and commercial insurance. When you exchange 1 percent of uninsured with 1 percent of commercial, the revenue swing is 200 percent.”
The four years prior to Coopwood’s arrival, The MED lost money — $20 million in 2009. His first full fiscal year The MED made $17 million from operations.
Coopwood deflects credit. “The best asset The MED had was the people. I didn’t have to convince people that The MED is great. I had to convince them that we can be great if we change how we do things.”
The MED Foundation has seen the bump. From fiscal year 2010 to 2012, there was a 70 percent increase in total contributions.
In July, the board of directors at The MED approved two major capital improvement projects totaling $32.4 million. The MED’s Elvis Presley Memorial Trauma Center and Turner Tower will be expanded, which will add capacity and new services to the hospital’s menu of healthcare offerings. The Turner Tower project includes the expansion of the Firefighters Regional Burn Center and the renovation and occupation of three floors, previously empty but planned to hold a relocated inpatient rehabilitation hospital, an outpatient ambulatory surgery unit, and acute care patient rooms.
The expansion is but stage one of a much larger, visionary plan that will see the complete replacement of The MED’s campus.