The financial strength and plans for the future at Regional Medical Center at Memphis were featured in the most recent issue of Memphis Medical News.
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Major new construction to begin
Sudden financial stability and the possible rise of new buildings at Regional Medical Center at Memphis (The MED) have many in the city’s medical community scratching their heads and patients taking a new look.
Stronger efforts to gain revenue, better efficiency in collecting payments and a more patient-friendly environment are keeping the once financially challenged medical campus in the black.
“Not investing in (patient experience) drove a (poor) reputation across the city, and we’re slowly trying to break that down,” said Reginald Coopwood, MD and CEO of The MED for the past two years. “We don’t have as many transfers post-recovery as we did before. All those transfers were lost revenue for The MED.”
That’s just one example of how The MED is working harder to recoup lost income.
In 2009, it was announced that Regional Medical Center at Memphis was in danger of closing its doors for good due to major cash shortfalls, some estimated as high as $32 million. Today, just three years later, The MED is making plans to completely rebuild its campus in the foreseeable future.
Coopwood, who was hired in March 2010, said the current fiscal year will end with revenue of $9 million to $10 million, much higher than the $3.8 million that was budgeted.
The previous fiscal year, his first with The MED, ended $5 million in the black.
Coopwood said fewer trauma and burn patients are quickly transferring to another hospital after their major treatments are complete.
His own experience as a doctor before becoming an administrator may have something to do with The MED’s new attention to patient care.
Coopwood is originally from Nashville and attended Meharry Medical College, specializing in general surgery. He worked for a private practice before becoming chief medical officer of a hospital and later its CEO.
He was recruited to lead The MED at the height of its financial crisis.
“The board was very clear that The MED was going through transitions,” Coopwood said. “What they didn’t tell me was well-documented in the newspaper. I was very aware, but in my mind, looking at the assets of The MED – the people, the doctors, the reputation – those are assets that you can’t just create.”
In other words, he saw enough resources to make a new start.
Previously The MED had been operated by a private consulting firm, which had slashed costs in many areas.
“At some point you have a fixed amount of revenue and you can reduce costs below your revenue,” Coopwood said. “The problem with that is that you can’t cut yourself to prosperity.”
Semi-Private Rooms Gone
The MED began phasing out its semi-private patient rooms, which Coopwood said were not competitive in today’s market. All of the rooms got an aesthetic facelift as well so patients would feel more comfortable.
The MED’s image, it seemed, was part of the problem.
In 1994, scenes from the Joel Schumacher/John Grisham film The Client were filmed on location at The MED, portraying it as a run-down hospital for the indigent.
The MED does receive an appropriation from Shelby County of about 9 percent of its $350 million budget and leases its buildings from the county, but CFO Rick Wagers, who came on board the same month as Coopwood, said the cost of serving the indigent and prisoners is a fraction of its overall costs.
“Our focus has been on collecting all the money that’s due us and making sure we have appropriate contracts in terms of payment rates,” Wagers said. “I’d say another issue is working to change the whole image and persona about what The MED stands for and trying to make it a hospital of choice.”
And as the facilities improved, bedside manner improved as well. Coopwood said staff members started taking pride in the hospital and in their care of patients.
The MED Foundation, which has raised several hundred thousand dollars over the last two years through high-profile galas, has also had an easier time of raising funds for the hospital with the new image. This year’s gala, held in April, sold out with more than 800 attendees.
Something else that’s on the increase is elective procedures.
The MED has been able to boast of its burn and trauma centers and its Neonatal Intensive Care Unit, where high-risk babies are cared for. But patients whose conditions allowed them time to choose a hospital were going elsewhere.
“When you’re dealing with elective-type procedures, two things come into play – one, that your doctor likes to practice (at The MED), and if the doctor likes the facility, that the facility is clean and bright,” Coopwood said. “It plays a role.”
Plans for New Facilities
Now plans are being formed to create new facilities altogether.
Coopwood said ideas are just now emerging to replace all but one of the buildings on The MED’s campus, beginning with the Adams Pavillion on Jefferson Avenue, which is the oldest, built in the 1940s.
It currently houses The MED’s administration but will be replaced by a new center for women and infants.
Coopwood said The MED would remain at its current location in the downtown medical district even though that means shifting services from building to building as new buildings are constructed and old ones are torn down in turn.
It is likely the Turner Tower, which was built in 1992 and houses the burn unit, will remain. It has several floors that were never put to use.
“I think that it’s doable; we just have to make sure that we continue growing from a financial standpoint,” Coopwood said.
One thing The MED won’t be doing, though, is buying up small physicians’ groups, something that Coopwood said as a doctor himself he doesn’t see as feasible.
“I’m not a proponent of purchasing physicians’ offices,” he said. “I can say that honestly now because we have a little money in the bank and we could go out and buy them.
“Doctors are interesting people. If you hire them to do a job, they’ll do it. If you hire them under the premise that they can still do what they normally do and then you try to change it, it becomes very difficult.”