Peter Fine, President and CEO of Banner Health
Since he arrived at Banner Health in 2000, president and CEO Peter Fine has preached the cost-cutting and expansion gospel as payers and government have first slowly, and then quickly started to squeeze healthcare organizations for efficiencies through the blunt tool of reduced reimbursements.
That resolve was never more needed than during the financial crisis, when Banner, similar to other organizations across the country, experienced substantial declines in patient volume combined with reimbursement reductions amounting to hundreds of millions of dollars.
In a state where Medicaid pays only seven cents on the dollar for the cost of care, Banner had to streamline itself using tools and tactics borrowed from industrial engineering, Lean, Six Sigma, and business process reengineering. As importantly, the case had to be made that the initiative was critical to the organization's mission and culture, engaging clinical and administrative staff across the organization to collaborate in the process.
In Banner's case, the executive team played a key role in its most recent drive to bring an additional $256 million to the $5 billion (revenue) organization's bottom line by 2017. Rules of engagement were as follows:
With these rules in place, eight cross-functional teams—each composed of middle managers, a consultant guide, and a sponsor from the leadership team—were formed. During an intensive eight-week pilot, each team was trained. Then they analyzed the cost structure of one function and recommended cost reduction tactics.