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Don’t pull the plug! An occupational health program under financial stress turns to CHG for answers.
Background:
A health system had an occupational health program with six sites in excellent locations throughout the service area. However, reorganizations and leadership changes caused the program to be handed off and shuffled around the organization chart, and it became an undervalued afterthought by the health system’s leadership. Employer clients were well served and happy, but the program’s financials were sinking fast.
Problem:
The director was a seasoned and passionate occupational health professional. She approached Corporate Health Group, and said she had done what she could to create and provide a scope of services that was valued by the customer. Still, she needed help to identify what else she could do to turn the program around financially. Most importantly, she needed to win the support and demonstrate the value of the program to internal leadership. “They’re about to pull the plug on the whole program,” she said.
Examination and Diagnosis:
The first priority for CHG was to find out why the program was sinking so quickly. We discovered a combination of factors. We found that overhead for structure and staffing was too high relative to volume. When it came to revenue, we found the organization structured occupational health so it did not receive credit for certain revenues, but still bore the expense. For instance, the lab received revenue from drug screens, while Occ Health was expensed.
The program also provided employee health services for the system’s 2,000-plus employees — At no cost! Pre-employment physicals, drug screening and other services buried the department in overhead expense and RN time that couldn’t be provided to paying customers — the employers. It was to the point that paying customers had to wait for care, which explained declining volumes from otherwise loyal and returning employer groups. To further complicate the situation, the Occ Health program had no database or ability to show what was happening.
Prescription:
Our immediate recommendations included reducing overhead and reorganizing so all clinics reported to one director with one portfolio of products and services, identical billing and coding. An IS system for patient tracking, billing and coding was essential, but for the short term we showed them how to use what they had to maintain accurate records and not leave money on the table. From our internal research, interviews and operational assessment, we helped the director clearly demonstrate the potential for growth and profitability of the Occ Health program. This was especially true if other departments worked together to focus on the employer customer instead of every-man-for-himself sales and marketing efforts.
Result:
The Occupational Health program broke even five months after changes were implemented and turned a profit in the sixth month. Today, they work with us to grow the program. | 
