CAMPAIGN FOR CHANGE

Alecto Healthcare Services Hayward, LLC

Campaign for Change

• Expenses originate from:– Services

• Generally contracted, would need to be negotiated

– Supplies • Generally contracted, would need to be negotiated

– Labor• Can be changed within a shorter timeframe

Campaign for ChangeMeasures

Option 1- Workforce Reduction

Employee Cuts

40% Decrease in Staff(391 FTE’s)

Furlough Days

N/A

FTE Staff Salary

$98,060 per year(No Decrease)

FTE Management Salary

$126,497 per year(No Decrease)

Severance Package Cost

$3,682,909 ($9,429 per Terminated

FTE)

Total Expense Savings

$34,619,348

FTE per Unadjusted Occupied Bed Ratio

6.55 FTE’s per Occupied Bed

Note: Wages and estimates were used from Fiscal Year 2011 OSHPD Report

Option 2- Workforce Reduction & Furlough All

FTEs

15.5% Decrease in Staff(150 FTE’s)

2 Days per Month for All Staff

8% Decrease$20,565,410 per year

8% Decrease$731,423 per year

$1,414,350 ($9,429 per Terminated

FTE)

$34,591,483

9.28 FTE’s per Occupied Bed

Option 3- Workforce Reduction & Furlough

All FTEs

7.75% Decrease in Staff (75 FTE’s)

2 Days per Month for All Staff

8% Decrease$13,804,460 per year

8% Decrease$731,723 per year

$707,175 ($9,429 per Terminated

FTE)

$21,183,208

10.14 FTE’s per Occupied Bed

Campaign for Change

• Key Strategic Initiatives1. Decrease FTEs and eliminate unnecessary

expenses

2. Institute the LEAN philosophy

3. Implement the Campaign for Change marketing strategy

Campaign for Change

• Decrease FTEs and eliminate unnecessary expenses– Reduce 7.75% FTEs and furlough all

personnel two-days a month• FTE reduction savings $7 million• Furlough savings $14 million

– Department heads to eliminate avoidable expenses

• Supplies, equipment, and travel $117,000

Campaign for Change

• Institute the LEAN philosophy – Continuous Improvement– Increase quality and efficiency – Decrease cost and expenses– Total employee involvement– Zero

• Waste in processes• Defects in outcomes• Misunderstandings of procedures

Campaign for Change

• Types of Wastes:– Errors/rework– Excess inventory– Transportation– Waiting/delays– Over Processing– Over Production– Excess Motion – Lack of clarity and unused creativity

Campaign for Change

• The Campaign for Change marketing strategy– Hospital branding “Premier Cardiac Center”– Change image of hospital for employees and

community– Incorporate a physician survey and increase

physician engagement

Campaign for Change

• Health care reform impact– Reimbursement legislation

• Lower Medicare & Medi-Cal reimbursement rates• Reduction to DSH program

– Increase number of insured patients• More individuals will qualify for Medi-Cal medical

coverage