HEALTHCARE

Hudson Valley BUSINESS JOURNAL, Mav 2, 2005 - 2 5

Why consolidation may not add value but may increase cost
By LAWRENCE P, CAFASSO When New York-area and other hospitals faced severe revenue shortfalls even as their expenses climbed precipitously, many responded with mergers and acquisitions. But as New York institutions combined their operations and centralized administrative and other functions under a single, corporate structure, a question has arisen: Has the corporate office really added value, or has it simply added more overhead? As part of cost-cutting strategies, newly merged hospitals tend to remove core functions including treasury, billing, insurance, finance, budget and reimbursement, managed care, internal audit, human resources and IT from the local institutions, and instead centralize them at the corporate level. When carefully planned, this approach may be effective for many industries. But before implementing a strategy of consolidation, top management should consider .what the benefits would be, if any, to the individual institutions as well as to the hospital system as a whole. If core functions are consolidated at the corporate level, will they bring true savings, or merely reallocate costs, possibly burdening individual hospitals with additional overhead? The case for maintaining billing at the local level is pretty straight forward: cash is king. It is obvious that a hospital needs to have control of, and timely access to, billing and revenue collection, especially in light of the cutbacks that have accompanied the migration to managed care. When the billing/receivables function is centralized, follow-up and other collections activities may take longer, star\'ing institutions of the cash they need to stay alloat while burdening them with additional overhead costs. To speed the process, hospitals may wish to' consider standardizing policies and procedures for (he svstem as a whole, while maintaining implementation and selected. accountability at the local level. Process - To achieve merger-related The case for maintaining IT functions at cost reductions and process improvethe local level may appear to be less con- ments, the post-merger integration should vincing, especially in today's networked focus on the detailed processes of the cenenvironment. But in fact it's not so sim- tralization. It may also be important to ple. If all of local IT systems were com- ensure that people with expertise in pletely integrated, then it might make process mapping and reengineering are available. However, in many health care sen.se to centralize the function. Similarly, while efficiencies may be business combinations, these skills are not realized by centralizing an IT system. But resident. in most cases, it should be noted that each Technology - Moving to a common hospital has might have its own unique hardware and software platform is essenlegacy system. Attempting to use software tial tp maximizing the value of functional and other "patches" to mold disparate sys- integration. Such a strategy facilitates tems into one holistic network may actu- process change and increases the cross ally result in greater inefficiency, since utilization of staff. precious labor hours are u.sed up trying to Measurement and Goal Setting - Even link them together. Instead, a uniform when effective centralized decisions are standard should be established and imple- made in the "people, process and technolmented across the system. ogy"' segments, accountability must be Some areas, however, do lend them- established between the local business selves to con.solidation. While some of the owners and the corporate administration. benefits of consolidation such as a reducEstablishing appropriate goals or servtion in redundant tasks are obvious, other ice line agreements, measuring against examples of significant savings may not those goals, and rewarding accordingly be quite as obvious. can achieve this. Leveraging costs by centralizing the .As hospital administrations are presinternal atidit function, for example, may sured to improve iheir financial returns, it help to attract lop talent, and bring value is imporlanl to consider all the issues and to local institutions. ramifications of a particular approach, to However, there are additional chal- help ensure that any gains realized al the lenges to achieving true post-merger inte- "corporate level will not come at the gration value. The failures usually fall expense of individual insiiiutions. inio one of the following four areas: Lawrence P. Ccifasso is Senior Vice People - Often, administrative and other President and Chief Operating Officer of appoinlmenis are intluenced by politics Catskill Regional Medical Center and forinsiead of bringing in a qualified outsider mer Senior Partner in Charge & to run a large ci)mple\ centralized service .Assurance Business Development Leader. I'unction. a "connected"" individual who Morthcdsi Health Care and Public Sector mav not have ihe needed skills is instead Practice. KPMGLLC

Managing stress in the workplace and elsewhere

By IK)N R, MUELLER, IH,I),

What is Stress? Is stress tlie resiili ot some mechanical force or strain to be measured, for example, by a scientist or engineer'.' Or is stress sometliing less concrete, say a feeling or state of mind thai we ex[x.'rience in various situations? Having experienced life for yourself yt)u know that stress is tx)(h of tliese tilings. Stress is both physical iind mental or emotional. Wliether physical stress results from ihe pull of gravity (hence the weight of our Ixxly) or from the presstire of the surrounding atmosphere, as F^irtli dwellers our ixxJies Doctor are always under some form ol' stress, strain, tension or pressure. L'nder enough physical stress we bend. Too much physical stress and we breaki Altliough physical stress is certainly interesting lo studs. the crux of this article centers about mental and emotional suvss and some of tlie useful methods for managing or coping witli sta'ss in the workplace and elsewhere in our lives. Ciood or "Positive" stress versus bad or "Negative" stress Dr. Hiuis Selye, a pioneer in stress research noted, "Witliout su"ess. there would be no life." Selye noticed that noi all stress is bad. that there ;ire gtx)d or "posiiive" stresses lor "stressors" a word he coined), which promoted wellness along with bad or "negative"' stresses thai caused distress and thai also might encourage illness. Selye alsn roali/ecl thai individuals dii'fered in their ca|xicii\ ic endure siress. We all know of |x.'o|ilc uho ap|X\ir 10 thrive tinder stress and al le\ eK IIKII would Ivnd or break many of us. W'hal miis Iv a bad or negali\e siressur for one |vrsoM nia\ bo a gixxJ or |iusiii\e sire.ssor Idi anoiher |X'rson. Ttierefore, il reall\ boils doun ic ihe |x:rson. ihe iy(v of stress (siiossor) and ilklevel of siress ihai ihe person feels conifunahle wiih thai dictates whether iho suvss is giH>d or bad. Whai is giHid for the gixisc is noi ncccssai ily also gcKxl for ihe gaiidei. This slighi alihough |K)ignani nKHlillcaiion nl a laniiliai proverb leads me to mention ihat woniun b\ mosi accounts appear lo handle siress lieiier ilian do men. Lcnik al an\ actuarial table on moiialilN rales Iviween men and WHIIICM and il is tuuispiuent tliat women, un average, oui-

li\e men. Studies conducted by Professor Shelley E. Taylor ai UCLA suggest that siressed-out women are more likely to seek ihe s(x:ial support of ottiei>i than ;ire stresseduut men when it comes lo dealing witli stress. It appears that most men have yei to "see Ihe light" on this issue luid continue lo indulge in typical "Tighi-or-night'" behavior when confronled with stress. It is the .'\merican physiologist Walter Bradford Cannon "(1871-1945) who is credited wilh the idea of the "tight or night"' response. Bones Stress can be $tre$$

Employers are becoming painfully aware of the many ways in which iiH) much negative su-ess or "StreSS" in the workplace is becoming more and more costly ($S) to business: S-accidents, $-absenleeism, S-employee tumover, S-reduced productivity, .S-medical insurance costs, $-legal bills, .S-workers' compensation. Stress management in the workplace not only makes good sense from a health pers(x;clive il makes good business Sensel Managing or coping with negative stress IX.niling wiih stress is clearly a [Tersonal issue Ixnh in tlie lype of sire.ss and the level of stress. For example, a negalive siressor for one |x."rson may be a posiiive siressor for another person. Levels of stress tlial would ovenvhelm one |X"rson may in fact Ix.* quite uilenible for another |vr.son. .Although u e caniioi eliminate negative stress from our life we cenainlv c;ui find useful ways of managing il lo acceptable levels. What works for one person may or may lml work for another |x.'rson. Hxercise - is a trieil and irtie w ay lo get iicgaiive or "bad"' stress under control. Build up your body, not your fiiisiraiions. Keep a regular schedule of exercise so thai ii is somelhing thai \ou can coiini on as well as look forward to. Nothing complicaled hero. You don'l need to join a heallh club I unless you wani lo). Jtisi llnd a caloriehuniing acii\it\ ihat gels you nKning and cnjoNing life. Tr\ to keep il fun. Remember III warm up and cool down.

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Hiuhon Vcillcv BUSINESS JOURNAL. Mav 2. 2005 - 3 3

WEEKLY Planmr
Defensive Driving Course Mav 7 MIDDLETOWN - The six-hour dclcnsivc driving course which offers participatus a lO'i liiscouni on ihcir auto insurance liahilli> imJ colMsion premiums for 36 nu)nlh> ami also removes up to 4 points from drivint: recortls will he offered at Orange Counts Comnnmit> College at the main campus in MiddleiovMi from 9 a.m. to 3:.1O p.m. in ihe Bio-Tech Building, Room 203. For more information ov register electronically, visit www.sunyorange.edu/cape. To register in person: Registration Ofllce on the third floor of the College Commons at the Middletown campus at 1 LS South Street, or call 845-.341-4892. Cardiac Screening May 7 Vassar Brothers Medical Center along with The Hudson Valley Heart Center are offering free cardiac screenings on from 10 a.m. to 2 p.m.. in Vassar's Cardiac Catheterization Laboratory Holding Area. Poughkeepsic. Open to the public, the screenings are tor Peripheral Arterial Disease (PAD) and Blood Pressure/Hypertension. For more information or to schedule an appointment, call 483-644 L "Walk- in'.s" are aLso welcome. Electronic Document Management Mav 10 Business professionals can learn how to reduce a coinpany's organizational costs while increasing operating elTiciency u.sing electronic document tiianagcment. The seminar. "Sharpening Your Company's Competitive Edge.' will be held from 9:.30-l l;30 a.m. and again from 1-3 p.m. at ALOS headquarters in Montgotnery. For more infortnation call Joe Manglass at 800-431-710.-i X664 or email ALOS at dwsetiiinars<0'alosusa.cotn. The seminar is tree. Family Medical Leave Act May 12 The Northern Hudson Valley Job Service Employer Cotiimittee in collaboration with the Chamber of Comtnerce Ulster County will present "Family Medical Leave AciAVorker's Compensation Update" with guest speaker. Joel J. Greenwald. Esq. of Greenwald & Associates PC. from 8:45-11:00 a.tn. at the Business Resource Center. One Development Court. Room 114. Ulster Avenue. Kingston. The cost is $10 per person for JSEC members and .SI5 for non-metnbers. For more infortnation visit www.ulsterjsec.org or call Ron Stonitsch at NYS DOL at 845-331-8920 Ext. 3004.
T I I I I T T T T

Salem Organic Soils discovers 'Sweet Peet'

Continued from page 1 tiger by the tail." he added. Their banker referred them to the U.S. Small Busine.ss Adtninistration that in turn referred thetn to the SBA-funded Mid-Hudson Small Bu.siness Developtnent Center for help. There they tiiet Don Dodd.s. who helped thetn patent Sweet Peet and write a busine.ss plan for selling Sweet Peet licensing agreetnents. "We needed to be shown the way." .said LaMour. Saletn'.s growth at it.s initial .site averaged 20 percent a year, with revenues topping .S2 tiiillioii this past year. The fact that their cost-of-goods sold is only 30 percent certaitily helped. With yet another new patent and Saletn's first Sweet Peet licensing contracts in Long Island, Florida, Ohio and Connecticut, the owners expect growth to increase exponentially. In fact, the owners recently spid their original site as a licensed territoProject Management seminar ry in order to concentrate on their national licensing plan. They project that each Mav 12 licensee's revenues can be as high as those at their original site. ON May 12 Dutchess Community College Several tnore contracts are under review irtcluding one for New York State's Ulster will sponsor a seminar on project management and Rockland counties. Salem will also soon begin exporting Sweet Peet now that it titled "A Breakfast with a Bottotn Line" with has been approved by the Canadian govemment. speaker Michelle LaBrosse. Cheetah Learning, With what they've been able to accomplish with manure, Lamour and Goff give the at the college Bowne Hall Room 122 in Poughkeepsie from 7:30-9:30 a.m. For more expression "turning lemons into lemonade" a whole new meaning. information call 845-431-8902 or e-mail Medicine." Studies reveal that a bout of Pirog@sunydutchess.edu. hardy laughter is a superb way to reduce Continued from page 25 levels of negative stress. How to Check Indoor Air Quality Hobbies - att; a great way to take your May 17 Take the Time to Smell the Roses Rockland residents are invited to a free setn- mind off of your troubles. If the boss atid your life is for living. There is much beauty in inar on "How to Check Your Indoor Air coworkers don't object, then bring your the World. Take the time to find it and be Quality" being offered from 1:30 - 3 pm in the hobby to work. You might even stimulate amazed. Nanuet Mall Community Room, and repeated others into bringing their hobbies to work. Don R. Mueller. Ph.D.. "aka Doctor at 7:30 - 9 p.m. at the Fire Training Center. 35 Relaxation - comes in many forms: Bones" is a chemistry professor. It is Firemen's Memorial Drive in Pomona. The instructors include experts frotn the Rockland sleep, meditation, visualization and deep- through the Doctor Bones Science and County Department of Health, and Cornell breathing techniques, are all useful ways Health Shows, that Doctor Bones engages to caltn the effects of negative stress. If the public with important issues concernUniversity Cooperative Extension. To register by May 13. call (845-429-7085) you are the type who likes to take a 15- infi science and health. He has been called the "Will Rogers of Science and Health. " or e-mail (rockland@cornell.edu). leaving tninute nap, then go for it! your natne. daytime, phone nutnber. number of Soothing/Invigorating Music - try lis- Check out www.drbonesshow.com for people attending atid preference of daytime or tening to tnusic that calms you and music more information. Don can also be evening class. reached via phone at (845) 406-4623 or that invigorates you. Laughter - is truly the "Best by email: drmueller@optonHne.net. .Mediation Training June 10-13 The Mediation Center of Dutchess County will conduct a 30 hour Transfortnative Mediation Training at Vassar College. Mediation skills are useful for anyone who would like to learn how to manage conflict constructively, whether in business, volunteer work, or in family situations. Those interested in a volunteer position tnust also attend an orientation on either May 4 or May 5. Training cost: S75O (non-volunteer). SI 00 (volunteer)which includes a copy of The Protnise of Mediation. Call the Center for information at 471-7213. For information about Transformative Mediatioti. visit ww'w.transformativemediation.orgV Human Resource seminar May 3 Rockland Business Association Consultants Council will host a human resource seminar titled "Human Resources and Your Business" presented by Lena Bodin president and CEO of People Resource Strategies, on May 3. frotn' 7:30 - 9:30 a.m. at Holiday Inn (Holidome) in Sulfern. For tnore information e-tnail Eric Davids. Gevity Business Developtnent Manager email: eric.davids@gevityhr.cotn

Managing stress

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