Running head: RESOURCE MANAGEMENT 1
Resource Management
Heather McKee
Liberty University
NURS 523
May 9, 2016
RESOURCE MANAGEMENT 2
Abstract
Carilion clinic is a large healthcare organization that is centered in the Roanoke Valley in
Virginia. It includes a level one trauma facility and numerous outlying facilities. It has a very
large patient population that use its services. This writing explores the organization and their
management of finances, materials and personnel. The organization is fairly successful in each
category overall. However, there is always room for improvement and change, especially in
large healthcare organizations.
RESOURCE MANAGEMENT 3
Resource Management
Roanoke Memorial is a level one trauma center located in the Roanoke Valley of
Virginia. It is the only level one trauma facility located in Southwest Virginia region. It is owned
and operated by a large healthcare system named Carilion Clinic. The healthcare system owns
and operates seven large facilities and numerous outlying facilities. Carilion provides many
types of health care services that includes emergency care, trauma care, general surgery, and
outpatient surgery, and complicated pregnancy, neonatal and pediatric intensive care and has now
expanded on its own psychiatric facility. It is one of the largest patient care healthcare
organizations on the East Coast.
The organization is a not for profit health system that relies heavily on reimbursement
from Medicare and Medicaid. Roanoke Memorial is a MAGNET facility that strives to maintain
this standard that is based on the nursing care. Carilion’s mission is to “improve the health of the
communities we serve”. The organization works to maintain their community involvement
through different community outreach programs. Carilion’s vision is “we are committed to a
common purpose of better patient care, better community health, and lower cost”. Finally
Carilion’s Values are community, courage, commitment, compassion and curiosity.
Budget Considerations
Since Carilion is a not for profit healthcare organization it relies heavily on
reimbursement from Medicare, Medicaid and private insurance companies. Ensuring that the
organization is reimbursed with funding is extremely important to the daily operations of the
organization. Like most healthcare organizations Carilion strives to ensure that their employees
are educated and understand all guidelines for ensuring that the organization is reimbursed. The
RESOURCE MANAGEMENT 4
organization prides itself on patient safety as an organization as well. The organization works to
ensure that there are no patient falls, hospital acquired infections and ongoing facility safety.
There is one MAGNET facility in the healthcare system, Roanoke Memorial. For a
hospital to be considered MAGNET status, they are recognized by the American Nurses
Credentialing Center (ANCC). The facility has demonstrated excellence in more than thirty five
areas of nursing. One important aspect that is emphasized is the use of QSEN. QSEN (Quality
and Safety Education for Nurses) is a national initiative to identify the competencies and
knowledge, skills, and attitudes needed by all nurses (and all healthcare professionals) to
improve the quality and safety of healthcare (Disch, 2012).
When maintaining a MAGNET facility there are many different financial aspects to
consider. There are many other parts of the budget that have to be included as well to make sure
that maintaining a MAGNET facility is within the means of the organization. It takes a large
amount of funding to ensure that a MAGNET facility is kept running and within the budget.
Research has shown that patients receive better quality care from a facility that has larger
percentage of nursing staff that is registered nurses. One would think that would be more
expensive but it actually is less expensive and the patient receive better patient care and the
facility has a better chance of remaining at MAGNET status.
Healthcare facilities are also using Press Ganey’s Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) to assess their patient satisfaction to help track
reimbursement funding. The results are publicly reported on a hospital compare website. There
have been reforms that include many financial incentives for hospitals that voluntarily report
their patient satisfaction surveys. Roanoke Memorial is among those hospitals that reports their
surveys voluntarily (Tinkham, 2014).
RESOURCE MANAGEMENT 5
Financial Management
Carilion health system is a multi-billion dollar health system that requires close financial
management through a large department of financial personnel. Since the healthcare system is a
not for profit system it relies most heavily on reimbursement from Medicare, Medicaid and
private insurance companies. The past decade has seen a large increase in health care costs. In
an analysis of four different countries it was found that the United States has started spending a
significant amount of funding and time on increasing the use of technology assessments and
payment based on diagnosis-related groups and the value of products or services. Moving
towards these policies can result in a more efficient use of health care resources (Stabile et al,
2013).
Patient Payment Options
The Carilion healthcare system does offer multiple options for those patients that have no
insurance coverage. However, the use of these funds must be closely monitored by the financial
department. Although the system wants to help the community by making sure that all patients
are cared for they still need to keep the system afloat financially. The system offers more than
one option for uninsured patients. Caring for uninsured in the current healthcare system requires
a close understanding of billing regulations, a commitment to informed consent, and a beneficent
approach to finding solutions for these patients.
Charity Care. The charity care program is offered to every uninsured patient that meets
certain financial requirements. For any emergency room visit the patient can file for the charity
care and work out a financial agreement with the billing office. This program is followed very
closely by the financial personnel on the administration for the system. There has been certain
RESOURCE MANAGEMENT 6
limits set forth on the charity care to ensure that it does not put a financial strain on the system.
The patient must meet all requirements to qualify for the charity care program. This program
does not guarantee that the patient is going to be able to have the entire hospital bill completely
wiped out. The patient is still considered responsible for a portion of the bill.
Reimbursment. The Diagnosis-Related Group (DRGs) is a statistical system of
classifying any inpatient stay into groups for the purposes of payment. Carilion has a large list of
frequently used DRGs but financial analysists have narrowed the list down and for the most part
the financial department focuses on the top ten DRGs to monitor since they are the highest
revenue for the healthcare system. These DRGs are very effective in predicting patient lengths
of stay and this helps to also determine revenue for the system.
As stated previously Medicare and Medicaid provide a large amount of reimbursement
for the health system. This is true among all health systems in the country. Due to the rising
costs of healthcare, most healthcare systems rely on Medicare and Medicaid reimbursement for
and Medicaid set high standards that healthcare systems have to meet in order to get complete
reimbursement (Weil, 2013). Carilion has “Core Measures” in place that require the healthcare
staff to meet these core measures in order to receive their complete reimbursement.
The Affordable Care Act. The Affordable Care Act (ACA) was enacted in 2010 by
President Obama. It is probably the most important event of the Obama presidency and could
affect the future of the healthcare in the United States. The ACA changed access to healthcare,
the cost of healthcare and the quality of care (Blumenthal et al, 2015). With the enactment of the
ACA the healthcare systems in the country saw an influx of patient volume that made daily
operations more of a challenge and forced healthcare systems to readjust their staffing, facilities
and resources.
RESOURCE MANAGEMENT 7
Annual Charity Case. Every year Carilion takes on one charity care case for an
individual that is less fortunate and has an illness that needs extensive surgery or medical care.
In previous years these cases have included children from foreign countries that needed care that
was not available in the country they lived in. Most of the time they are brought to Carilion with
missionaries from the healthcare system and are eventually adopted and kept in the country. Of
course this act of kindness stays with Carilion’s mission to provide for the community around
them but this can also be very costly. Some of the most recent charity care cases have cost over
millions of dollars of funding, healthcare that will not be paid for which includes, doctors time,
nurses and ancillary staff as well. Also as a part of the charity agreement Carilion is responsible
for any follow up care that is needed for any surgery performed or any continued care of a
chronic disease. Although Carilion tries hard to choose a case every year it must be very careful
how it utilizes its funding. It is important for Carilion to plan a charity case around their budget
to ensure that is does not cause a financial strain on the organization (Stabile et al, 2013).
Cost Containment. Cost containment is a very important financial strategy that most
healthcare facilities in the United States are lacking. There are a lot of different ways that a
healthcare facility can increase their cost containment (Stabile et al, 2013). One important
strategy that Carilion has implemented is their “Go Green” campaign. The healthcare
organization hired one registered nurse that oversees the organization’s complete campaign and
analyzes the cost containment that the organization achieves with making sure that the company
maintains a go green approach to patient care. According to recent knowledge that was made
public, Carilion was able to save millions in funding with their campaign. The campaign is now
a permanent strategy in the organization.
Materials Management
RESOURCE MANAGEMENT 8
The daily operations of a large healthcare system depend on the amount of personnel that
is employed and is responsible for the daily functions of all the facilities in the healthcare
organization. The largest group of healthcare professionals at Carilion are the same as any other
large healthcare organization, the nurses. This plays a large role in maintaining the MAGNET
status. When facilities have a large amount of nursing population it is easier to ensure that they
maintain their MAGNET status. This is extremely important as well in patient care surveys.
MAGNET facilities usually have higher patient satisfaction scores and offer a more extensive
education on quality care to their nursing staff (Tinkham, 2014).
Unit Budgets
Carilion has one of the largest leadership teams on the east coast of healthcare
organizations. The leadership team is comprised of a president/CEO, numerous vice presidents
that each have their own department that they are responsible for. Next below the vice presidents
are the unit directors and clinical team leaders for the various nursing units. They are responsible
for the daily operations of each nursing unit and most importantly staying within the budget. It is
the responsibility of the unit directors to maintain a close budget that falls within the overall
larger budget of the organization. These budgets cover every single aspect of the unit. It is
extremely important for the unit directors to be educated on building budgets that supply the
nursing units and stay within the guidelines that the higher leadership has designated.
There are two types of hospital budgets. The conventional and the input-output budgets.
Carilion is a not for profit healthcare organization that follows the input-output budget. The
adoption of the input-output budget has been shown to have substantial changes in rate of the
individual departments however it most likely will have no change on the hospital output
RESOURCE MANAGEMENT 9
department. As research has shown the input-output type of budget that Carilion has is a more
accurate system for cost control and planning (Putra, 2012).
The unit directors are required to keep accurate budget records that are presented to the
leadership and administration at Carilion. Each unit director is responsible for identifying issues
on the nursing unit that is costing extra funding. One example was in the emergency department.
The unit directors found that they were using a large amount of funding in response to the
materials that are used to obtain vital signs on their patients. It was found that more funding was
being sent purchasing disposable pulse ox sensors and the funding could be better used
elsewhere. In response to this the unit directors devised a solution and purchased the non-
disposable pulse ox sensors. After the purchase there was extensive education given to staff
regarding the use of the pulse ox sensors. This small change in the management of materials in
the emergency department generated a large amount of funding that was able to be place back in
the budget.
Christian Worldviews
Management of a large healthcare organization can be an ongoing challenge. It is
important to remain strong in one’s faith when making serious decisions and planning the path
for this healthcare organization. It is important for leaders to remain strong in their faith.
Everyone is a leader at some point in their life and will need guidance when making decisions.
Moses was a great leader in the Bible, and fortunately a lot of his leadership tips were recorded
in the bible to help lead us down the path the Lord wants us on. Mark 10:42-45 hold steady to
this thought saying “And Jesus called them to him and said to them, “You know that those who
are considered rulers of the Gentiles lord it over them, and their great exercise authority over
them. But it shall not be so among you. But whoever would be great among you must be your
RESOURCE MANAGEMENT 10
servant, and whoever would be first among you must be slave of all. For even the Son of Man
came not to be served but to serve, and to give his life as a ransom for many.”
Personnel Management
Finally another important aspect in the Carilion healthcare system is the personnel
management. There has been an attempt to improve this matter. Recruitment has become a large
aspect of the healthcare organization’s personnel management. The recruitment of employees
has grown tremendously not touching local and wide job fairs, some of the largest on the east
coast. The organization is able to recruit employees from all over the country.
Retention
One of the biggest struggles that Carilion faces is the retention of its employees,
specifically its nursing staff. Nursing has changed tremendously over the last decade. Retention
has become a very important strategy to maintain and adequate nursing staff for the organization.
However as point out by Litvak and Laskowski-Jones “Nurses have to work harder and faster to
manage the demands. This new generation just doesn’t seem to have the same work ethic”
(2011). Retention is a weakness that the organization has been striving to improve it. There are
a number of outreach programs that the organization has created in order to remain connected
with the nursing staff and continue to retain them as employees.
Retention Bonus. Recently as a strategy to increase retention among staff, especially
clinical staff. The emergency department unit directors campaigned for bonuses in which was
split up into three separate pay outs throughout the year. Although there has been some research
that reports using a bonus to increase retention is not a successful way of improving retention
(Hausknecht et al, 2009). However, this strategy seems to have worked for Carilion’s emergency
RESOURCE MANAGEMENT 11
department. Since the decision to give its employees the retention bonus, the amount of
employees has doubled and there have been fewer employees to leave the organization.
Reimbursement for Education. One of the most important aspects in the nursing field
is the advancement of one’s education. Although there are many different strategies to receiving
an advanced degree it can still be very costly. As a healthcare organization Carilion recognized
that there are numerous employees that wish to advance their education but they may not be able
to afford it financially. Carilion has partnered with the local college of health sciences and gives
employees the options of continuing their education with tuition reimbursement. There are
stipulations to this agreement. Depending on the level of degree the employee obtains they have
to sign a contract that they will remain with Carilion for a number of years to “pay back” per say,
the funding that it cost for the employee to obtain their degree.
Education. One aspect that Carilion prides itself on in the category of retention is having
very well trained employees. The organization has a “lifesaving training center”, where
employees are certified in many different classes that gives them the education to give safe and
quality patient care. There are many classes that Carilion offers at its center that are not offered
in the area. The organization often has individuals from other organization that travel to take
these certification classes. Through employee satisfaction surveys Carilion did find that
employees felt this continuing education was very important for them to continue to successfully
fulfill their job duties.
Promotion. There has been a large amount of research that illustrates that benefits of
promoting employees from within an organization. Externally hired employees are required to
get paid more and usually for the first two years on the job, the external hires receive lower
performance marks than an employee who has been in the organization for an amount of time
RESOURCE MANAGEMENT 12
(Adams, 2012). Carilion makes every effort to give all their employees the opportunity to
advance themselves in the organization. There are multiple job opportunities that are specifically
open to internal employees. This is another high point when Carilion makes presentations in
their retention education. The more that internal employees are promoted it will lead to a more
successful healthcare organization.
Conclusion
Overall the Carilion healthcare organization is successful in their financial management,
materials management and personnel management. As mentioned previously financially it is
extremely important for Carilion to receive their complete reimbursement for Medicare and
Medicaid. The issues found in receiving complete reimbursement have been identified and
Carilion follows core measures as a means to achieve this. Ensuring that the staff has adequate
education about details of the core measures can ensure they are being met on a consistent basis.
The unit directors that are in charge of the budgeting aspects of the nursing units have an
important role. Constant monitoring and research would make the unit directors even more
successful in maintaining the budget and identifying areas in which there needs to be
improvement. Quality projects such as the pulse oximeters project mentioned above can aid in
the investigation into continued quality care while saving funds that could be used more
effectively. Finally Carilion must continue to be successful in personnel management. Their
weaknesses have been identified in areas such as retention. Carilion needs to continue other
options, rather than just bonuses to retain employees. Giving employees true job satisfaction will
increase retention as well. As said in Jeremiah 17:14 “Heal me, O Lord, and I shall be healed;
save me, and I shall be saved, for you are my praise”.
RESOURCE MANAGEMENT 13
References
Adams, S. (2012) “Why promoting from within usually beats hiring from outside” Forbes
Business. April.
Retrieved from : http://www.forbes.com/sites/susanadams/2012/04/05/why-promoting-
from-within-usually-beats-hiring-from-outside/#13f97a6c3fb2
Blumenthal, D., Abrams, M & Nuzum, R. (2015) “The affordable care act at 5 years” New
England Journal of Medicine. June
Disch, J. (2012) “QSEN? What is QSEN?” American Academy of Nursing. February.
Hausknecht, J., Rodda, J. & Howard, M. (2009) “Targeted employee retention:performance-
Based and job-related difference in reported reasons for staying”, Cornell University ILR
School.
Litvak, E. & Laskowski-Jones, L. (2011) “Nurse staffing, hospital operations, care quality, and
common sense”. Nursing 2011. August. 6-7.
Putra, D. (2012) “Four planning approaches to operating budgeting” Accounting Financial &
Tax. February
Stabile, M., Thomson, S., Allin, S., Boyle, S., Busse, R., Chevreul, K., Marchildon, G. &
Mossialos, E. (2013) “Health care cost containment strategies used in four other high-
Income countries hold lessons for the United States” Health Affairs 32(4). 643-652
Tinkham, M. (2014) “Satisfaction, press ganey, and magnet recognition” Association of
RESOURCE MANAGEMENT 14
PeriOperative Nurses 100(5). 534-536.
Weil, T. (2013) “Hospital reimbursement incentives: is there a more effective option?” Medical
Practice Management. January/ February. 254-256
