Corporate management systems

An indi­vi­du­al Cor­po­ra­te manage­ment sys­tem will crea­te more trans­pa­ren­cy of your hos­pi­tal, and stra­te­gic goals and visi­ons can be tur­ned into reality.

Transparent management

In which are­as the hos­pi­tal is run­ning on pro­fits and whe­re los­ses are caused?

How mar­ket oppor­tu­nities can be iden­ti­fied and bay what means a fast respon­se to tho­se can be ensured?

How mana­gers and medi­cal lea­ders­hip can joint­ly deve­lop every medi­cal depart­ment in medi­cal and eco­no­mic dimensions?

How can the visi­on for the hos­pi­tal be trans­la­ted in to an ope­ra­tio­nal stan­dard pro­ce­du­re to beco­me reality?

This will not work just by uti­li­zing finan­cial figu­res and app­ly­ing stan­dard per­for­mance mea­su­re­ment. Con­fron­ta­tio­nal means will not lead to suc­cess, too. The­re­fo­re Antegrad has deve­lo­ped a gover­nan­ce tool, means: manage­ment sys­tem and suc­cess­ful­ly imple­men­ted at cli­ents‘ organisations.

The intro­duc­tion of an uni­fied DRG sytem (flat rate cases) has led to trans­pa­ren­cy of cost and true (pri­ce) com­pe­ti­ti­on bet­ween hos­pi­tals. The pres­su­re to chan­ge and impro­ve trig­ge­red by the DRG sys­tem will fur­ther incre­a­se con­stant­ly and not con­sti­tu­te a tem­pora­ry chal­len­ge only which could be sat out and igno­red. As in any com­pe­ti­ti­on, the­re are win­ners and losers. Wit­hin this envi­ron­ment, some hos­pi­tals have suc­cee­ded to posi­ti­on them­sel­ves very well in terms of medi­cal and eco­no­mic per­for­mance and the abi­li­ty to gene­ra­te sus­tainab­le pro­fits. In any case the gene­ral rule app­lies that suc­cess will only be achie­ved by tho­se who proac­tively and posi­tively take the chal­len­ges and effects cau­sed by the chan­ge to a reve­nue pri­cing model. Remai­ning in tra­di­tio­nal noti­ons and struc­tures has been and is not eco­no­mi­c­al­ly via­ble, and in mid to long term per­spec­ti­ve even jeo­par­di­zing future existence.

In the DRG sys­tem, as in any other pri­cing sys­tem, the­re are eco­no­mi­c­al­ly attrac­ti­ve cases/customers hea­vi­ly tar­ge­ted in the com­pe­ti­ti­on efforts and the­re are such being not lucra­ti­ve. Over time, spe­cia­li­sed pro­vi­ders cha­sing and ser­ving the attrac­ti­ve cases emer­ge, and con­se­quent­ly they con­cen­tra­te on the­se seg­ments. Vice ver­sa all pro­vi­ders not bound to a public ser­vice man­da­te, will refrain from ser­ving cases ine­vi­ta­b­ly genera­ting los­ses. By imple­men­ta­ti­on of the DRG sys­tem, hos­pi­tals in fact have beco­me (pro­fit ori­en­ted) com­pa­nies and hence are sub­ject to eco­no­mic cons­traints, in all of their ser­vices and func­tions. All hos­pi­tals are cal­led for offe­ring mar­ket­a­ble and com­pe­ti­ti­ve ser­vices only. This app­lies not only to their core medi­cal scope of ser­ving pati­ents but also par­ti­cu­lar­ly to the secon­da­ry and ter­tia­ry ser­vice are­as (labo­ra­to­ries, phar­maci­es, clea­ning, admi­nis­tra­ti­on etc.).

Com­pa­red to „com­mon“ com­pa­nies, hos­pi­tals are still facing a very spe­ci­fic inter­nal dif­fe­ren­tia­ti­on bet­ween „core busi­ness“ and admi­nis­tra­ti­on. Natu­ral­ly, dif­fe­rent sta­ke­hol­ders are pur­suing dif­fe­rent inte­rests and goals. Howe­ver, as a very hos­pi­tal-spe­ci­fic phe­no­me­non, each staff group — such as (atten­ding) phy­si­ci­ans, nur­sing and finan­ce func­tions — is pushing for their par­ti­cu­lar inte­rests and bene­fits much tougher than usu­al in, for examp­le, indus­tri­al com­pa­nies. This fre­quent­ly leads to a sub­stan­ti­al dis­con­nect bet­ween the goals of such employee groups and tho­se of the hos­pi­tal as a who­le, and some­ti­mes such for­ces are in full con­tra­dic­tion to the goals of the hos­pi­tal (manage­ment). Any respon­si­ble hos­pi­tal manage­ment has to find ways to break such con­flicts of interest.

Implementation of a Control system

Manage­ment and deve­lo­p­ment of medi­cal departments:

Creating transparency

Simp­le cost cen­ter direc­to­ry with true, direct reflec­tion of respon­si­bi­li­ty structure

Con­sis­tent defi­ni­ti­on and repor­ting of con­tri­bu­ti­on mar­gins for each depart­ment (pri­ma­ry and secon­da­ry areas)

Inter­nal pri­cing sys­tem and char­ging of secon­da­ry ser­vices -> Calculation/reporting of con­tri­bu­ti­on mar­gins also in secon­da­ry ser­vices area

Entre­pre­neu­ri­al orga­ni­sa­ti­on of admi­nis­tra­ti­on func­tions (IT, tech­ni­cal ser­vices, clea­ning, cate­ring…) -> Calculation/reporting of con­tri­bu­ti­on margins

Remai­ning func­tions under strict bud­get con­trol with plan/actual figu­res reporting

Cru­cial: simp­le cost cen­ter struc­tu­re and clear/consistent allo­ca­ti­on of cost

All busi­ness figu­res pre­sen­ted to lea­ders­hip have to be valid (!!) and tra­ca­ble down to vou­cher level.

Cal­cu­la­ti­on of con­tri­bu­ti­on mar­gin (CM) 1,2 as a mea­sura­ble cri­ter­ion for respon­si­bi­li­ty /performance in the respec­ti­ve area area and sti­pu­la­ti­on of clear, mar­ket-based CM 2 targets.

Of cour­se, tho­se may dif­fer from one medi­cal depart­ment to the other. For examp­le, pediatric depart­ment will gene­ra­te a lower CM 2 than car­dio­lo­gy department.

Regular ‚Development Rounds‘

Par­ti­cu­lar­ly with the medi­cal lea­ders­hip staff, hos­pi­tal manage­ment should not pri­ma­ri­ly dis­cuss finan­cial num­bers – sub­ject should rather be medi­cal pro­ces­ses, com­pe­ti­ti­on, struc­tu­re of refer­ring phy­cis­ians, case poten­ti­als, hence

KPIs for medical departments

Num­ber of cases

Num­ber of cases

Case Mix 
CMI 

DRG reve­nues per case

LoS

Long-term stay­ers

Short-term stay­ers

Demand of beds (assu­med 90% uti­liz­a­ti­on, 365 days)

Share of OPS DRG

Share of Bons. DRG

Medi­cal Ser­vice of the Health Funds (MDK) ratio

Inek com­pa­ri­son for medi­cal staff

…the­se data are to be pro­vi­ded by the Medi­cal Con­trol­ling depart­ment. Manage­ment will add selec­ted exter­nal data such as:

General external data

Mar­ket shares per dia­gno­sis (actu­al) and poten­ti­al for +5 and +10 con­se­cu­ti­ve years; Split by sex and age

Case num­bers by main dia­gno­sis and medi­cal depart­ments of sur­roun­ding hospitals

Effects cau­sed by demo­gra­phy, ambu­kat poten­ti­al, mini­mum quan­ti­ties, epi­de­mio­lo­gi­cal deve­lo­p­ment, medi­cal advancement…

Catch­ment are­as by focus ser­vice level (down to ICD); con­si­de­ra­ti­on of com­pe­ti­ti­on and fil­ters as per above

Along with the medi­cal figu­res, finan­cial num­bers are to be ana­ly­sed and requi­red mea­su­res to be deri­ved from. Based on the scru­ti­ny of the finan­cial data, sub­se­quent actions requi­red have to be defi­ned. Detail­ed mea­su­res to be taken are sole­ly resul­ting from medi­cal ratios:

Length of stay too high? What opti­ons to coun­ter­act are avail­ab­le and advisable?

Long-term stay­ers in DRG x? App­li­ca­ble options?

Share of con­ser­va­ti­ve tre­at­ment wit­hin DRG too high?

Port­fo­lio con­tains too many risks due to ambu­la­tant potential

Ques­ti­ons of that kind are to be dis­cus­sed and impro­ve­ment mea­su­res to be ela­bo­ra­ted. By con­duc­ting such con­ver­sa­ti­on, con­fron­ta­ta­ti­ons can be avoided, e. g.:

Demand by manage­ment towards heads of medi­cal depart­ments: „Save money!“ and counter-‚killer argu­ment‘ rai­sed by heads of medi­cal depart­ments: „…this will end­an­ger human lifes“

‚Dead­lock com­mu­ni­ca­ti­on‘ does not sup­port achie­ving hos­pi­tal goals. Rather, by main­tai­ning descri­bed per­for­mance enhan­ce­ment dia­lo­gues with all medi­cal key staff on a regu­lar basis and sup­por­ted by posi­ti­ve deve­lo­p­ment of key rati­os and com­mu­ni­ca­ti­on of the same wit­hin the ent­i­re peer group, hos­pi­tal manage­ment crea­tes a posi­ti­ve inter­nal com­pe­ti­ti­on for the best depart­ment­al wealt­hi­ness – hence, manage­ment and medi­cal lea­ders­hip do joint­ly deve­lop medi­cal port­fo­lio and orga­ni­sa­ti­on of the hospital.

For example:

In almost any hos­pi­tal medi­cal key staff pos­ses­ses a very high level of self-esteem:

Medi­cal ser­vices offe­red are per­cei­ved as first or even world class,

the indi­vi­du­al­ly shaped and imple­men­ted orga­ni­sa­ti­on of OR, ambu­lan­cy, ward, func­tio­n­al are­as – without real alter­na­ti­ve and just perfect,

the net­work of refer­ring phy­cis­ians is full-fled­ged and, of cour­se, supraregional,

the owne medi­cal depart­ment is — so to speak – fun­ding the ent­i­re hos­pi­tal, and rea­sons for the hos­pi­tal making los­ses can only be

Inef­fi­ci­en­cy of col­leagues (espe­cial­ly Mr. A or Mr. B)

Admi­nis­tra­ti­on was­ting money in a lavish man­ner, and of course

All figu­res con­cer­ning the own area of respon­si­bi­li­ty are incor­rect anyways…rather than figu­res main­tai­ned wit­hin own ‚grey‘ repor­ting etc.

Each cost cen­ter direc­to­ry for a hos­pi­tal com­pri­ses of 120 cost cen­trers. A respon­si­ble indi­vi­du­al has to be assi­gned to each cost cen­ter (head of medi­cal depart­ment, lea­ding nur­sing staff, head of tech­ni­cal ser­vices, head of HR etc.). Having such orga­ni­sa­ti­on in place ensu­res cla­ri­ty, e. g.: The area of respon­si­bil­ty of head of medi­cal depart­ment Dr. Mil­ler gene­ra­tes cost to the tune of x €. This amount x can be segre­ga­ted into staff cost and cost of material/external ser­vices and docu­men­ted down to vou­cher level. In the same strai­ght and trans­pa­rent man­ner reve­nues can be assi­gned – for this pur­po­se, simi­lar­ly simp­le clear rules are to be set, e.g. reve­nue will be allo­ca­ted to dischar­ging or recei­ving medi­cal department.

A cor­rec­tion fac­tor will be app­lied by MDK which is deri­ved from histo­ry (per­cen­ta­ge) and

The­re will be quar­ter­ly char­ging if a signi­fi­cant share of trans­fers occurs.

An inter­nal pri­ce (mar­ket pri­ce) for ser­vices per­for­med will be char­ged to the recei­ving depart­ment, and vice ver­sa ser­vice per­for­med to exter­nal recei­vers will be char­ged out to them.

The resul­ting con­tri­bu­ti­on mar­gin is com­pre­hen­si­ble to Dr. Mil­ler, head of medi­cal depart­ment. The­se offi­cial figu­res super­se­de the sub­jec­ti­ve per­cep­ti­on of Dr. Mil­ler. On one side, it can be docu­men­ted if a medi­cal depart­ment is making pro­fits, and it can be dis­play­ed in which out­put and pro­cess rela­ted KPIs the­re are still poten­ti­als not uti­li­zed. Hence, tack­ling of reco­gni­zed poten­ti­als can com­mence (rather than unspe­ci­fic calls for ‚savings‘).

By identification of first measures to solve issues

Long stay­ers

MDK rate too high

the eco­no­mic per­for­mance (i.e. con­tri­bu­ti­on mar­gin 1 and 2) of the depart­ment will impro­ve simul­ta­ne­ous­ly, and this pro­gress can and should be hono­red accord­in­gly. Of cour­se, not all medi­cal lea­ders­hip staff is posi­tively and con­se­quent­ly joi­ning this way (in fact , the­re are excep­ti­ons i. e. oppo­sing indi­vi­du­als), howe­ver the very majo­ri­ty of medi­cal lea­ders­hip staff appre­cia­tes the new trans­pa­ren­cy and the visi­bi­li­ty of mea­su­res and their impact.

Antegrad gets it done

Antegrad has imple­men­ted such sys­te­ma­tics in several hos­pi­tals with gre­at suc­cess. Star­ting with rest­ruc­tu­ring of accoun­ting and con­trol­ling depart­ment, cost cen­ter struc­tures and accoun­ting gui­de­li­nes, Antegrad has led the deve­lo­p­ment dia­lo­gues — at least in the dif­fi­cult initi­al peri­od — and estab­lis­hed the sys­tem in order to han­do­ver the same to the hos­pi­tal manage­ment. Each mem­ber of the medi­cal lea­dersh­sip — i. e. each head of medi­cal depart­ment — is eit­her very pre­tious or very expen­si­ve to the hos­pi­tal. The inter­ac­tion and gui­d­ance of this – this admi­nis­tra­ti­ve term may be excu­sed – cor­po­ra­te resouce is a true manage­ment task and can not be dele­ga­ted. Wit­hin the ent­i­re deve­lo­p­ment of medi­cal are­as, heads of medi­cal depart­ments and hos­pi­tal manage­ment con­sti­tu­te a team and can only ent­i­re­ly suc­ceed as such.

Do you have questions or want to obtain further information?

Plea­se get in touch with us.
Your con­ta­ct part­ner: Gerhard Becker

Antegrade optimizes the
hospital performance

We sup­port your health­ca­re com­pa­ny on all levels to achie­ve a bet­ter stra­te­gy and orga­niz­a­ti­on.
We cover the fol­lowing key aspects:

Organizational development

We help you deve­lop a sui­ta­ble struc­tu­re and orga­ni­sa­ti­on for your health company

Portfolio
development

We exami­ne your depart­ments in detail and deve­lop the ide­al port­fo­lio for your indi­vi­du­al tar­get market.

Development & control of the entire tertiary area

We impro­ve per­for­mance and effi­ci­en­cy across all parts of your busi­ness — from cate­ring ser­vices to cen­tral sterilization.

Corporate management systems

With a cus­to­mi­zed cor­po­ra­te manage­ment sys­tem, your hos­pi­tal will be more trans­pa­rent, and visi­ons will be more easi­ly implemented.

Interim
Management

As an inte­rim mana­ger, we help you to impro­ve your manage­ment, imple­ment chan­ges and sup­port you on all levels.

Cooperation Development & Merger

We help you to coope­ra­te with other com­pa­nies, deve­lop the allo­ca­ti­on of tasks and crea­te a win-win situation.

Digitalization & IT development

We accom­pa­ny you com­pet­ent­ly on the path of digi­ta­liz­a­ti­on — from the pro­cess con­cept to digi­tal stra­te­gy deve­lo­p­ment and implementation.

Business Management & Training

Antegrad deve­lo­ps effi­ci­ent manage­ment sys­tems, hel­ps with its imple­men­ta­ti­on and trains the managers.

Distressed Health Care

We sup­port you with all necessa­ry mea­su­res for your hos­pi­tal and help you to opti­mi­ze
your stra­te­gic positioning.