Featured Guest Contributor
Linda Hoff, Chief Financial Officer, Stanford Health Care
As we look forward, significant time and resources are being focused on the Fall 2019 opening of the New Stanford Hospital. The ongoing cost of bringing on a $2.1 billion facility is substantial, including increased utility costs, depreciation and the cost of maintenance and cleaning. After 10 years of planning, staff is embracing taking on the challenge of adjusting operations to accommodate the expanded campus. In addition, planning for the replacement of the remaining buildings to meet seismic standards is expected to take approximately five years and almost $1 billion. I am grateful to have the opportunity to be part of the team that will build the facilities for generations to come.
As we prepare for these increased costs, we are challenging ourselves to improve efficiency. This year’s budget includes savings from initiatives related to supplies and pharmaceuticals, improvements to our administrative functions and increased efficiency through better utilization of clinic space and decreased length of stay. None of this would be possible without the partnership and dedication of the medical staff. Finance is committed to providing transparent financial information and communicating opportunities to achieve the efficiencies necessary to accommodate the new costs associated with our beautiful new facility.
SHC’s financial success has often been achieved by growing volume. In fact, the success of the New Stanford Hospital is dependent upon new patients. Our identity and success will always be attached to saving the lives of the most complex patients in the Bay Area and beyond. Much of my career has been spent managing insurance premiums and the underlying cost of care. In this environment, which more closely resembles the Kaiser model, success is measured by keeping patients out of hospitals and spending resources on keeping people healthy. SHC, like most academic medical centers, plays an important role in meeting the needs of the most complex patients, but is sometimes challenged to find ways to flourish when financial success is measured by the total cost of care per patient, per year.
SHC launched an initiative four years ago to hone its ability to manage the total cost of care—our Medicare Advantage program. While we have over 3,000 members in this program, we spend more on the care of these patients than we receive in premiums. This is partially due to the small number of enrollees, but also demonstrates an opportunity to manage care differently to lower the overall cost of care. In contrast, we have experienced success in some of our other insurance products. With our employer partners in these products, we have learned on-site employer clinics lower the total cost of care. Harnessing the deep talent available at Stanford Health Care and partnering with our employer partners, we have only scratched the surface of what is possible!
I know our future holds the distinction of continuing to be a national leader in the delivery of efficient, high quality care through innovation. I look forward to our partnership!